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Yes, The Guys Using Legal Loopholes To Screw Over An AirBnB Host Likely Also Scammed Kickstarter Backers

from the this-happens dept

Wed, Jul 30th 2014 3:39pm — Mike Masnick

Recently, Russ Roberts had YCombinator's Sam Altman on his absolutely wonderful podcast Econtalk, and the discussion is fantastic and worth listening to (which is true of most Econtalk episodes). Among many interesting and thought-provoking points that Altman made about innovations and new startups like AirBnB and Uber was that with those kinds of new solutions there were always the growing pains -- the stories of crazy drivers or the AirBnB guests throwing crazy house parties. Those stories generate a lot of attention, and they tend to highlight issues where service can be improved, but they do little to slow down the momentum of those startups (in some cases, the publicity actually helps). The simple fact is that there are some people who will always abuse the system, but that alone doesn't deny the amazing opportunities created by some of these services.

But still, with the stories of scams and loopholes, there are always going to be some people who actively seek to take advantage of them. That's just something that happens. These are the same people who take advantage of loopholes in traditional ways as well. I knew a guy in college who bought a really expensive TV, but always returned it right before the 6-month money-back guarantee was up -- only to buy another TV to do the same thing over and over again. Same guy would also figure out ways to drop certain classes strategically to get better grades. He basically spent his life looking for loopholes. Such people exist, and apparently two Russian brothers who are good at that sort of thing are getting some attention for trying to effectively build some scams off of two popular online platforms these days: AirBnB and Kickstarter.

The AirBnB side of the story got attention first. Apparently, one of the brothers, used AirBnB to "rent" a condo in Palm Springs for 44 days, paying the first month in advance. However, he then stopped payments, and made use of a California renters/squatters law that says if you reside in a place for more than 30 days you're a "tenant" and if the owner wants to get rid of you they have to go through (very complicated) evictions. It seems clear that this was the plan all along.

A few days later, however, it came out that the brothers staying at the condo were Maxksym and Denys Pashanin, who also had a history of running a big Kickstarter project that raised $40,000, but hasn't delivered. They've also set up a second Kickstarter campaign, but (not surprisingly) it seems to be having trouble finding backers.

Making the situation even more bizarre is that Maksym appears to have logged into the Kickstarter account for the first game to comment on the story by joking about the situation:

In the end, though, some are trying to make a big deal out of what this means for "the sharing economy" or for these kinds of new platforms that are all the rage online these days. And the answer is: absolutely nothing. It may provide some details on how these companies can do better fraud prevention in the future, but the simple fact is that there are always people who are going to look to pull scams. That was true a thousand years ago and it was true a hundred years ago and it was true ten years ago. It's still true today. In fact, the difference might be that these guys, in pulling these scams, are getting plenty of attention for it. Their latest Kickstarter campaign is a dud, and it seems likely that they'll now have this reputation stuck to them going forward.

Of course, the other possibility is to use some of these new platforms to get them back as well. Forbes reporter Kash Hill has already suggested (jokingly, we're sure) perhaps using TaskRabbit to beat these guys up...

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Filed Under: crowdfunding, denys pashanin, eviction, maxksym pashanin, sharing economy, tentant laws
Companies: airbnb, kickstarter

24 Comments

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AnonCow, 30 Jul 2014 @ 4:39pm

I don't understand their logic. Squatting put them on everyone's shit list. It is going to be dramatically harder to rip off people when your name is plastered all over the Internet as a scammer. Nobody in their right mind would hire this guys or give them a dime. Even if they did want legit work, no potential employer would risk the backlash.

I guess they can move back to Europe and use the "right to be forgotten" to hide this mess and start ripping off Europeans?
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Scote, 30 Jul 2014 @ 4:57pm

There are real lessons in this...
"In the end, though, some are trying to make a big deal out of what this means for "the sharing economy" or for these kinds of new platforms that are all the rage online these days."

Well, this actually is a big deal for the totally misnamed "sharing" economy. Half-assed businesses such as renting your house or apartment out to strangers without the protections of an actual hotelier leaves people open to exactly this kind of thing. Hotels aren't subject to the protracted eviction proceedings and can kick people out, with the backing of the local PD.

The "sharing" economy is just low level business enabled by centralized, for-profit internet companies. It isn't "sharing", its working or renting out your property for money. Minus the internet it is the same stuff people have been doing for millennia without the internet to make the bookings, back when a local would put people up in their house for the night, or a local person with a car would run an impromptu taxi service.
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- Mike Masnick (profile), 30 Jul 2014 @ 5:05pm
  
  Re: There are real lessons in this...
  Well, this actually is a big deal for the totally misnamed "sharing" economy. Half-assed businesses such as renting your house or apartment out to strangers without the protections of an actual hotelier leaves people open to exactly this kind of thing. Hotels aren't subject to the protracted eviction proceedings and can kick people out, with the backing of the local PD.
  
  Millions of people use airbnb with no problem. I've found it to be tremendously useful.
  
  So *ONE* case of *ONE* problem like this and you think the whole idea is stupid? Sorry, but that's bullshit.
  
  It's not because of the "half-assed business." It seems the real problem here is the bogus renters/tenant law that treats this person as a tenant.
  
  The "sharing" economy is just low level business enabled by centralized, for-profit internet companies. It isn't "sharing", its working or renting out your property for money. Minus the internet it is the same stuff people have been doing for millennia without the internet to make the bookings, back when a local would put people up in their house for the night, or a local person with a car would run an impromptu taxi service.
  
  Yeah, but it's silly to claim that it's "the same thing" as before, when it's enabled on a massive and very different scale. That's like saying email is just like the old post office.
  
  Totally, totally different.
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  - Scote, 30 Jul 2014 @ 6:37pm
    
    Re: Re: There are real lessons in this...
    "Yeah, but it's silly to claim that it's "the same thing" as before, when it's enabled on a massive and very different scale. That's like saying email is just like the old post office."
    
    So now you are saying that taking something we've already done and adding "do it on the internet" *is* innovation? Perhaps folks should be able to patent that :-D
    
    I kid, I kid, but do you see that you position has some inconsistency to it?
    
    "It seems the real problem here is the bogus renters/tenant law that treats this person as a tenant."
    
    Yes, the eviction laws can be a problem, but keep in mind, they were created to prevent abuse by callous landlords, land lords like infamous Google lawyer and apparent illegal evicter of lawful tenements, Jack Halprin. So it is simplistic to blame this all on the CA eviction laws. Air BnB, as the company that encourages people to do short term rentals of their property had, IMO, an obligation to inform people of the hazards of rentals in general, and of rentals approaching 30 days. Just because they are a "sharing economy" company shouldn't get them out of knowing the local laws that are applicable to the rentals booked through them. (Ignorance of rental laws by all parties but the scammers is yet another example of the half-assed nature of much of the AirBnB businesses - something AirBnB should address since, as you note, it is AirBnB that is the engine behind this.
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  - Whatever (profile), 30 Jul 2014 @ 10:15pm
    
    Re: Re: There are real lessons in this...
    It's not because of the "half-assed business." It seems the real problem here is the bogus renters/tenant law that treats this person as a tenant.
    
    That's a pretty lame attempt to just write this off as a one off, but it is a good indication of why some "disruptive" models are doomed to failure.
    
    Airbnb has tripped over the easy stuff, the very basic concept that the rental market generally falls into short term and long term, and the rules are different in each case. When you cross the line into long term rentals, the balance of rights and obligations tends to shift towards the renter and away from property owner - at least compared to the situation in a short term, overnight hotel style rental.
    
    If you have ever stayed in a hotel for more than a month (which I have done working on projects away from home), they will always make you complete a new rental agreement every 28 to 30 days depending on local law. It's the same with renting a car from a Hertz or Avis, your rental contract is a maximum of 30 days, so there is no ownership or control rights implied by a longer term agreement.
    
    IMHO, AirBNB should have known better, and should not have allowed the booking for that long. It's a pretty basic error. It clearly shows that people are operating their "home hotel" small businesses without understanding all of the legal implications of doing so. That the rules vary on in each jurisdiction makes it even worse.
    
    Out of curiosity Mike, when you use Airbnb, what does the rental agreement look like? Have you compared it to a hotel rental contract? Do you think that the difference is important to either side?
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    - PaulT (profile), 31 Jul 2014 @ 12:56am
      
      Re: Re: Re: There are real lessons in this...
      "That's a pretty lame attempt to just write this off as a one off, but it is a good indication of why some "disruptive" models are doomed to failure."
      
      Want to expand, or is that just today's first smug proclamation that everyone's meant to believe because you say so? If I find a hotel that fails to adhere fully to the rules surrounding long-term stays, does that mean the hotel business is faulty?
      
      "IMHO, AirBNB should have known better, and should not have allowed the booking for that long. "
      
      Yes, clearly it's AirBnB for providing a booking system, and not the property owners for failing to look into local ordinances. AirBnB already tell you to check with local laws before advertising with them: https://www.airbnb.com/help/article/376
      
      "Out of curiosity Mike, when you use Airbnb, what does the rental agreement look like? Have you compared it to a hotel rental contract? Do you think that the difference is important to either side?"
      
      2 seconds of research suggests that any contract is with the property owner, not AirBnB directly: https://www.airbnb.com/help/article/465. Do you ever tire of basing your arguments on assumptions rather than facts?
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      - Whatever (profile), 31 Jul 2014 @ 1:15am
        
        Re: Re: Re: Re: There are real lessons in this...
        Want to expand, or is that just today's first smug proclamation that everyone's meant to believe because you say so?
        
        Personal insults get you no answers. I wish Techdirt had an ignore feature :)
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        PaulT (profile), 31 Jul 2014 @ 1:46am
        
        Re: Re: Re: Re: Re: There are real lessons in this...
        "Personal insults get you no answers."
        
        No personal insults, just observation about your usual dishonest "debate" tactic.
        
        Did you take time after you got off your fainting couch to address the points I actually made and the citations I provided, or are you just going to ignore them because they undermine the contrarian point you were making again?
        [ link to this | view in chronology ]
        
        Whatever (profile), 31 Jul 2014 @ 2:30am
        
        Re: Re: Re: Re: Re: Re: There are real lessons in this...
        Again, personal insults and taunting get you no answers.
        [ link to this | view in chronology ]
        
        PaulT (profile), 31 Jul 2014 @ 3:00am
        
        Re: Re: Re: Re: Re: Re: Re: There are real lessons in this...
        Where are you imagining that I'm giving you personal insults? Look, if you're just going to avoid having to defend your own comments in every thread, why are you even here? Don't you have anything better to do that lie on the internet?
        [ link to this | view in chronology ]
        
        Whatever (profile), 31 Jul 2014 @ 4:23am
        
        Re: Re: Re: Re: Re: Re: Re: Re: There are real lessons in this...
        Let me quote you:
        
        "dishonest" "fainting couch" "smug proclamation" "Do you ever tire of basing your arguments on assumptions rather than facts?"
        
        All being insulting and none of it adds to the discussion. You just want to get me to fight. Sorry, you are being a troll, and I don't deal with trolls.
        
        End.
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        PaulT (profile), 31 Jul 2014 @ 4:49am
        
        Re: Re: Re: Re: Re: Re: Re: Re: Re: There are real lessons in this...
        If you don't want insults, stop earning them, especially if you're so thin-skinned that a few sarcastic comments are getting you so annoyed. If you want real insults, I'm happy to supply them. If you want to see a troll, look in the mirror.
        
        But, you just want excuses to avoid dealing with the fact that you were wrong again. You can't deal with facts, so you whine in the hope that nobody notices that you lie and misdirect in every comment you make, and then run when challenged. Pathetic.
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        Sheogorath (profile), 31 Jul 2014 @ 7:56am
        
        Re: Re: Re: Re: Re: Re: Re: Re: Re: There are real lessons in this...
        Sorry, you are being a troll, and I don't deal with trolls.
        
        No, we have to deal with you instead.
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        Anonymous Coward, 4 Aug 2014 @ 1:14am
        
        Re: Re: Re: Re: Re: Re: Re: Re: Re: There are real lessons in this...
        Obviously you've never had to deal with yourself.
        
        In which case, I feel sorry for your mother.
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        Sheogorath (profile), 31 Jul 2014 @ 7:53am
        
        Re: Re: Re: Re: Re: There are real lessons in this...
        I wish Techdirt had an ignore feature :)
        
        It does. Would you like us to test it?
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      - PRMan, 31 Jul 2014 @ 6:28am
        
        Re: Re: Re: Re: There are real lessons in this...
        And yet if AirBnB had known this, they could have limited stays to 28 days and protected all of their clientele easily.
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        nasch (profile), 31 Jul 2014 @ 7:40am
        
        Re: Re: Re: Re: Re: There are real lessons in this...
        And yet if AirBnB had known this, they could have limited stays to 28 days and protected all of their clientele easily.
        
        Well, except the ones who want to do long term rentals.
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Paul Brinker, 30 Jul 2014 @ 5:51pm

Squatters Rights...
Most Hotels in low rent areas where people tend to stay around a while have this problem. Once someone is over 30 days even at a hotel most laws prevent eviction without a civil process. In fact, a person could be in the place 1 single day, tell the cops he has a monthly agreement, and the cops will tell you to take it to court. It does not matter if the person is a lying sack of you know what.

There are tons of story's about this, here is one that was fairly amusing.

http://www.dailymail.co.uk/news/article-1322246/Man-leaves-home-week-decorated-15-squatters- in.html
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DB (profile), 30 Jul 2014 @ 7:34pm

Well I'll be charitable to the AirBnB model. It's not anything new. But being able to efficiently do it "on the internet" is transformative. Previously you couldn't effectively advertise your single room worldwide, nor efficiently run a booking service.
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Anonymous Coward, 31 Jul 2014 @ 9:51am

Hmmm, Maxksym Pashanin's first name, backwards:

Myskxam ("my scam"?)
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Anonymous Coward, 31 Jul 2014 @ 11:08am

1) IMHO, AirBNB should have known better, and should not have allowed the booking for that long.

2) And yet if AirBnB had known this, they could have limited stays to 28 days and protected all of their clientele easily.

3) Well, except the ones who want to do long term rentals.

1) [hotels] will always make you complete a new rental agreement every 28 to 30 days depending on local law.

Businesses already operate with the current tenant laws, and have found what loopholes work for them. AirBnB should take lessons from the established businesses regarding established laws and work-arounds.
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- PaulT (profile), 1 Aug 2014 @ 12:20am
  
  Re:
  What is the business law surrounding a listing agency like AirBnB that operates globally that you think applies to this? Why should it be their responsibility to check property compliance with local laws, rather than the property owner as per their current agreements? Should eBay also be responsible for checking local electrical ordinances for every item someone sells on there in case someone uses it wrongly? If not, what's the difference?
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Padpaw (profile), 31 Jul 2014 @ 4:20pm

If they are currently squatting in a fixed location would that not make it easier for a class action lawsuit to be served to them over their scams. Since they are refusing to leave that home, they would have to receive it. If they fled the home the owner would be able to take it back.

maybe some of their victims could go pay them a visit with the owners blessing to help remove the vermin.
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Zonker, 1 Aug 2014 @ 4:36pm

This is not a new thing exclusive to AirBnB renters. Hollywood even made the movie "Pacific Heights" on this subject back in 1990.
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