Class-Action Lawsuit Filed Against Airbnb Over Missing Payments Related to the COVID-19 Pandemic

An Airbnb host filed a class-action lawsuit against the short-term rental vacation company on Thursday, November 5, 2020, alleging that Airbnb did not properly compensate hosts for guests who canceled bookings related to the COVID-19 pandemic. The lawsuit was filed in the U.S. District Court, Northern District of California, and brings claims for breach of contract, breach of fiduciary duty, and violation of unfair competition law. The complaint requests damages and appropriate injunctive and equitable relief.

The class-action lawsuit was filed by Anthony Farmer, an Airbnb host in Texas. The complaint centers on Airbnb’s public response to the COVID-19 pandemic, specifically Airbnb’s announcement that it would offer full refunds under its Extenuating Circumstances Policy to Airbnb guests who booked vacation rentals on or before March 14, 2020. The announcement stated that Airbnb would offer full refunds even if the agreement between a guest and a host did not provide for a full refund. The complaint alleges that, through the announcement, Airbnb was overriding the terms of guest-host contracts even in instances where guests and hosts had previously agreed on a cancellation policy that allocated the risks between each respective side.

Shortly after the announcement, Airbnb apologized to its hosts and publicly announced that the company would set aside $250 million to help hosts pay for canceled bookings. This announcement stated that hosts would be “eligible to receive 25% of what they would[ have] received from a Guest under the cancellation policy in place at the time of the booking.” The complaint states that, instead of issuing full refunds to guests, Airbnb is instead providing guests with travel credits, issuing partial refunds, or denying guests any compensation whatsoever. The complaint further states that, at the same time, hosts are either forced to accept 25% of the amount stated in cancellation policies or nothing at all, specifically alleging that “Airbnb Payments is uniformly refusing to pay Hosts the money they are owed under the Payment Terms – even if that money has not been refunded to the Guest.” The complaint further alleges that Airbnb thereafter announced a change to its Terms of Service, Payments Terms of Service, and the Extenuating Circumstances Policy, which effectively authorize similar conduct in the future.

Specific to Farmer, the complaint states that Farmer was paid $185.03 for six canceled bookings in March or April 2020 under the Extenuating Circumstances Policy. The complaint alleges that, under the cancellation policies that the guests agreed to with Farmer at the time of booking, Farmer should have been paid at least $840.03 for said bookings. Further, the complaint alleges that Farmer has not received a “full and accurate accounting. . . stating whether [Farmer’s] Guests were refunded in full or were instead given travel credits or some lesser cash payment.”

Additional Reading

Airbnb hit with proposed class-action lawsuit from host missing payments, CNBC (November 5, 2020)

Farmer v. Airbnb, Inc. et al (Case No. 3:2020cv07842)

Complaint in Farmer v. Airbnb, Inc. et al

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