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On the Internet you can buy almost any product according to its exact specifications in terms of model, manufacturer and color, including for cars, motorcycles and household appliances wherever they are. Escrow websites have made it a safe exercise to purchase these types of expensive items, because they guarantee payment and delivery of the product. But what happens when scammers and mobsters lure unsuspecting buyers and suppliers to fake escrow sites to steal their banking information, money, and products?
Unfortunately, escrow fraud is a reality. Some unscrupulous people set up fictitious escrow sites and then pose as buyers or suppliers to swindle unsuspecting people out of their cash or merchandise. When an escrow scammer assumes the role of a seller, he or she displays a product for sale and convinces the buyer to remit their money to the fictitious escrow site, usually advising that it is for their own safety. The scammer gets the money intended for the merchant and the buyer gets nothing in return.
Assuming the role of a buyer, the scammer scours auction and classifieds sites to find an item they want and pretends to buy it. The scammer is adamant about using the fake escrow website, which sends the seller a message that the buyer has wired the funds for the seller to ship the item. The scammer receives the product and the seller is left with nothing.
How to identify and avoid fake escrow sites
Not falling victim to escrow fraud is really easy if you follow a few essential rules:
1. Familiarize yourself with several well-known and trustworthy escrow sites before making any online transactions.
2. Beware of a buyer/dealer who insists on using a particular escrow firm you’ve never heard of (some use a variety of sites to neutralize suspicion among wary buyers/dealers)
3. Beware when escrow services are poorly designed, appear inappropriate, have many spelling or grammatical errors, and/or do not have enough information about the proper use of the site or who owns it. Legitimate escrow companies spend a lot of time and money to set up quality sites.
4. NEVER use an escrow website whose URL (web address) does not start with “https://”; the “s” is important; implies a secure site with 128-bit encryption technology. An unsecured escrow site is most likely a fake.
5. Beware of escrow websites with abnormally low escrow fees. Low escrow fees are sometimes used to attract people.
6. NEVER send money using untraceable money transfer companies.
7. NEVER deposit escrow funds to an individual or agent. Legitimate companies only allow you to deposit funds with a corporation that is authorized to conduct escrow transactions.
What to do if you suspect an escrow site is fraudulent
Here are some things you can do to confirm if an escrow site is legitimate:
1. Do an internet search for the company. If the search results show only the escrow site, it is probably a rogue site.
2. Look up the company’s domain name in a WHOIS database. If registration was recent or contact information cannot be confirmed, please stay away from the site.
3. Find out if the business is licensed and who is the licensing authority. Then find the licensing authority and check the registration numbers provided. Make sure the registration number matches the company. Double check the licensing authority’s own site. If it shows any of the scam site red flags, assume this site is scam, as is the escrow company you authorized.
4. If an escrow site claims to be affiliated with eBay, Yahoo! or a similar company, verify the relationship of the alleged affiliate.
5. Any escrow site that claims functions as an extension of a larger and better known escrow company is probably not legitimate. Well-known escrow firms rarely operate this way.
What to do if you are a victim of a fraudulent escrow site
If you have been the victim of a fraudulent escrow site, you should report the site to the authorities immediately and respond promptly to protect yourself from identity theft.
In the UK, you can report internet and escrow fraud to the Metropolitan Police
In the US, you can report fraud through your local police, Secret Service, and/or the Internet Crime Reporting Center.
If the fraudulent transaction occurred in connection with eBay, Yahoo!, Craigslist, or a similar site, you should report the incident to that company and to the police.
You can also report the website to the company that the website is hosted with and ask them to shut down the website.
To report identity theft in the UK, visit the Metropolitan Police website.
In the US, report identity theft to the Federal Trade Commission.
stay on the safe side
The most effective method of avoiding an online escrow scam is to use a popular and established escrow company, such as PayPrimo.com. PayPrimo is a licensed and authorized escrow corporation with a reputation for reliability. PayPrimo’s site is uncomplicated to use, has a variety of traceable payment options, and uses at least 128-bit encryption security for your protection.