No fraud claim against VRBO over bogus listing because website terms did not guarantee prescreening

Plaintiff sued the website VRBO for fraud after he used the website to find a purported vacation rental property that he paid for and later learned to be nonexistent. He specifically claimed that the website’s “Basic Rental Guarantee” misled him into believing that VRBO pre-screened the listings that third parties post to the site. The lower court granted VRBO’s summary judgment motion. Plaintiff sought review with the First Circuit Court of Appeals. On appeal, the court affirmed summary judgment, finding the guarantee was not fraudulent.

The court found the Basic Rental Guarantee was not fraudulent for a number of reasons. The document simply established a process for obtaining a refund (of up to $1,000) that involved satisfying certain conditions (e.g., having paid using a certain method, being denied a refund by the property owner, and making a claim to VRBO within a certain time). The document gave no indication that VRBO conducted any pre-screening of listed properties, but instead the document mentioned investigation that would be conducted only in the event a claim of “Internet Fraud” (as VRBO defined it) was made. And VRBO’s terms and conditions expressly stated that VRBO had no duty to pre-screen content on the website, and also disclaimed liability arising from any inaccurate listings.

Finally, the court found that the guarantee did not, under a Massachusetts statute, constitute a representation or warranty about the accuracy of the listings. Among other things, the document clearly and conspicuously disclosed the nature and extent of the guarantee, its duration, and what the guarantor undertook to do.

Hiam v. Homeaway.com, 887 F.3d 542 (1st Cir., April 12, 2018)

About the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.