In Aug. 2004, along with other major onsen hot springs, Ikaho got caught in a major onsen scandal which started in Shirahone Onsen in Nagano. Onsen managers mixed in tap water and/or bath salts into the water and billed it as natural hot spring waters.

Some of Ikaho's major hot spring inns were also found to be adding bath salts or tap water to the hot spring water. Today, all onsen inns must display a certificate indicating the content of their water.