State investigation prompts OBX rental company to refund renters

Posted at 1:29 PM, Jul 01, 2020
and last updated 2020-07-01 18:32:20-04

OUTER BANKS, N.C. - Booking a vacation in the Outer Banks turned into a months-long headache for hundreds of people. Melissa Lutz is one of those people.

Living in upstate New York, her family has been vacationing in the OBX for nearly 30 years. She had a trip scheduled for April through the company, Surf or Sound Realty.

"We've used Surf or Sound in the past, numerous times without any problem. I think it's fair to say that's not who we're going to be booking with in the future," she said.

Lutz said the problems started when Dare County closed access to visitors due to coronavirus concerns. Understanding the gravity of the pandemic and needing to keep her family safe, she opted for receiving a refund instead of booking for 2021.

The company initially complied, promising refunds to customers, but soon-after backtracked and said they changed their policy. They said they would no longer be issuing refunds and instead, customers were given three other options to choose from.

Lutz, however, said she was never notified of any changes and was under the impression for weeks that her refund was on the way.

"I was just flabbergasted that they hadn't reached out to us and that I had to find out by doing research myself," she said.

She stumbled across a Facebook paged called "Surf or Sound Realty Owes Us A Refund Due to the Pandemic." She found out that, in fact, she was not alone and hundreds of other people were also struggling with unpaid refunds as well.

Herself and other members of the group filed complaints with multiple agencies including the Attorney General's Office, the North Carolina Real Estate Commission and the Better Business Bureau.

The stories of frustrated renters caught hold at the state level, prompting an investigation by Attorney General Josh Stein.

His office told News 3 that they were looking into more than 200 complaints against Surf or Sound since mid-March. This mounting pressure and potential pending litigation prompted change.

On Thursday, Lutz opened her computer to an email saying Surf of Sound started the process of refunding customers. She was prompted to sign a document, confirming her refund of $1,388.18.

"I actually got the check in the mail yesterday," she said. "It was just a relief to have it done I’m just tired of worrying about it. I checked my bank today, I did a mobile deposit, and it went through so we are done!"

Not everyone is in the clear, though. Folks who filed disputes with their bank, like Heidi Doyle, are in limbo.

In an email to her, Surf of Sound said "we cannot process refunds while funds are under dispute. If there are remaining funds, we will need to determine the amount remaining before we can issue any refund... We will be working through these as soon as we are able to get through the refunds to guests who did not dispute their charges."

Doyle said she will continue to move forward with her dispute.

In a statement to News 3 the CEO of Surf or Sound Realty, Dale Petty said they committed to finding a resolution for each individual.

In part, he said, "As of June 18, two-thirds of guest reservations affected by the road closure have been resolved, but that isn’t good enough. Our team is continuing daily to assist every guest who chose to do business with us. We are committed to finding a resolution for each and every individual." Click here to see his full statement.

Commenting on the probe up to this point Attorney General Stein said in a statement, "I am pleased that we were able to achieve this result for consumers without a lengthy court battle. Would be vacationers who were prohibited from traveling will be refunded. This is the right outcome."

Renters like Lutz said "I'm not sure if the refund would have come without all of the pressure that people had put on them."

Lutz also encourages others to read reviews before booking with any vacation rental company.