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The Los Angeles city law firm filed a lawsuit against Airbnb, denounced the home sharing platform for allowing price gouging and unverified hosts and addresses on more than 2,000 rentals following the January fire extinguishment of Altadena and Pacific Palisades.
In a statement, LA City Atty. Hydee Feldstein Soto’s office accused Airbnb of allowing illegal rental prices to be raised, allowing false and non-existent hosts and addresses on the platform. The lawsuit seeks a permanent order that will stop Airbnb from raising prices during an existing emergency and a refund to consumers who have been charged higher fees.
“Although Airbnb has since taken steps to reduce price gouging, evidence indicates that illegal gouging on the site may continue and be ongoing,” Feldstein Soto said in a statement announcing civil enforcement action. “Airbnb recognizes that its verification process is inadequate… it could tempt future tenants to false sense of security about their hosts and locations.”
Airbnb challenged the lawsuit’s charges, saying the platform has played a consistent role in helping victims with financial aid following the wildfires.
“Since the wildfires broke out, Airbnb has donated nearly $30 million to fire recovery efforts in Los Angeles, including free emergency housing for nearly 24,000 people affected by the fire,” an Airbnb spokesman told The Times. “We will continue to support the city of Los Angeles’ recovery and reconstruction efforts.”
The lawsuit seeks a $2,500 fine for each suspected instance of price gouging in LA, potentially reaching between 2,000 and 3,000 properties.
The lawsuit also alleges that Airbnb’s “inadequate” verification process made users vulnerable to crimes such as identity theft, robbery, sexual assault, invasion of privacy and voyeurism. Airbnb did not respond to date-based investigations on these claims.
An unverified, nonexistent host suspected in a lawsuit refers to a host’s case using a pseudonym to represent itself on the platform.
According to the lawsuit, the case includes a host named “Greg” using a profile named “Amber Hiller,” who actually belonged to a woman named Akila Nourollah, and an ID named Guven Sakikarali, a relative of the actual account controller Ali Sacikaral.
Although it is not the correct name for the account owner, Airbnb allows the use of “preferred names” in terms.
The lawsuit also mentions several cases where Airbnb’s verified location is located up to four miles from the actual advertised address.
If the price gouging claim is found to be true, the lawsuit alleges that Airbnb was found to be in violation of the state’s unfair competition laws, California Criminal Code Section 396, anti-gouging laws, and the January 16th emergency declaration by Gov. Gavin Newsom.
The fire that erupted on January 7th ultimately destroyed more than 16,000 buildings in the Pacific Palisade, Malibu and Altadena.
In January, Airbnb issued a statement denounced price gouging and pledged to make it impossible for hosts to raise the price of their property by more than 10% from their pre-wildfire fees.
“With tens of thousands of people currently evacuated in the Los Angeles area and the prospects for that number continue to grow, the last thing everyone encounters is the pricing of hotel rooms and homes that try to take advantage of their desperate situation,” the statement read.
The company has also pledged to offer a free $1,000 voucher to fire victims for their Airbnb stay. By January 28th, over 11,000 vouchers had been sent. However, some fire victims argued that the vouchers were inherently useless due to strict regulations and lack of response to applications.
The state of emergency was intended to prevent hikes in rental prices during and after the fire, but previous reports revealed that prices have continued to swell in parts of LA, leaving them for non-sheltered people with few options other than expensive stays.
An Airbnb spokesman said the upper limit on rental prices after a fire would not allow illegal increases, which would allow for a rise in rental prices.
The company cited California Atty. An early statement from Gen. Rob Bonta praised Airbnb’s promise to follow the state’s emergency declaration.
“They are doing the right thing, so I’m grateful they did it. I hope other platforms follow suit and do the same,” Bonta said at a January 16 press conference.
However, Bonta’s statement was made before many long-term Airbnb rates were set.
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