10 tips for spotting online escrow fraud
Most victims learn about escrow fraud the hard way
-- by becoming victims. Don't let this happen to you.
With all the escrow fraud on the Internet, it's paramount
that you scrutinize an escrow site carefully before signing up for
any service. Otherwise you risk losing your money, merchandise and
personal financial information to scammers.
These 10 tips will help you spot a phony escrow site
before it's too late.
1. Watch out for copycat sites
Escrow.com is a legitimate escrow site, recommended by eBay. Many
scammers copy content from Escrow.com when they build their phony
escrow sites. Internet Escrow Service (IES) is a wholly-owned subsidiary
of Escrow.com. IES only provides escrow services to Escrow.com.
Any site that claims otherwise is fraudulent.
2. Call customer service
Call an escrow site's customer service number. Not being able to
get a live person on the phone is a big red flag. If you call and
get a fax or a generic voice mail that says leave a message, than
it's probably a scam.
Avoid any escrow service that doesn't list an address
or phone number.
"It's a buyer-beware environment on the Internet,"
says John Hambrick, a supervisory special agent with the FBI at
the Internet Crime Complaint Center. "The consumer needs to
get on the telephone and converse with folks and verify their credentials."
3. Don't be talked into using a particular escrow
Be suspicious of using an escrow service recommended by an online
buyer or seller. Be sure to scrutinize the site carefully before
using the service.
"When the seller directs you to an escrow site
of their choosing, that's a warning flag," Hambrick says.
4. Verify and then trust
Verify any and all endorsements and credentials on an online escrow
site. Are those really TRUSTe,
Business Bureau and VeriSign
Secure seals on an escrow site? Be sure to check.
"You're not being paranoid. It's a check you
can do in two seconds," says Jeff Ostroff, who runs CarBuyingTips.com.
Ostroff has helped shut down about 500 phony escrow sites since
Study all licensing information carefully. Being licensed
as an independent escrow company is no mean feat. Contact any licensing
authority listed on the site and verify that the site is actually
registered. Check this information carefully. Many scam sites have
ripped off the legitimate license number of Internet Escrow Services,
a subsidiary of Escrow.com.
You'll also want to check when an escrow site's domain
name was registered. Many scam escrow sites say they've been in
business for years but only have been registered for a few days
or weeks. You can use a "Whois" tool at any domain name
registrar, such as Register.com, to find out.
5. Steer clear of escrow sites with sloppy content
A sloppy Web site is probably a scam. Spelling errors, grammar problems,
inconsistent information or broken links are good indicators that
an escrow site is a scam.
Of course, a polished Web site is no guarantee an
escrow service is legitimate. A flashy, flawless escrow site could
still be a fake.
"Some of them look so unbelievably real,"
No matter how good an escrow site looks, be sure to
verify all claims and content.
6. How you pay could be a tip off
Take a close look at how an escrow site asks you to pay. If an escrow
site asks you to make a payment to an individual or agent rather
than a corporate identity, it's a scam. A legitimate escrow service
will never ask you to send your money or your product to the other
Beware of escrow sites that use person-to-person money
transfers such as Western Union and MoneyGram. Western Union is
not affiliated with any escrow service.
An escrow company on the up and up will ask you to
wire money from your bank to their bank. They'll provide you with
a routing number and account number.
If you wire money to an escrow service, ask your bank
to tell you where the wire transfer is being sent.
7. Do a Google search
Search for the escrow site on Google or another search engine. If
your search turns up zero results, be wary. If your search turns
up consumer complaints about the escrow site, avoid doing business
with the site.
8. Be wary of "safe" and "secure"
online escrow companies
Scammers love to use those words "safe" or "secure"
when naming scam sites. A dash in an escrow company's name, such
as secure-escrow.com, is another red flag. The dash seems to show
up in many phony company names.
Avoid escrow sites with Web addresses that end in
"org." A legitimate escrow service would never try to
pass itself off as a nonprofit organization. You'll also want to
avoid escrow sites with Web addresses that end in ".biz",
".cc", ".info" and ".US".
EscrowFraud.com and CarBuyingTips.com have long lists
of known escrow fraud sites on their Web sites. CarBuyingTips.com
lists screen shots of 12 common escrow scams.
9. Don't be blinded by a super deal
Many phony escrow sites place phony ads on Internet auction and
classifieds sites. These ads promise potential buyers and sellers
unbelievably good deals.
"A lot of times they'll put up a car and try
to sell it for under market values, thousands less," Ostroff
says. "And of course, there's no car."
Another tip off is when you send an e-mail to a buyer
or seller and you get a scripted, "Dear Sir" response,
referring you to an escrow site that they've used many times.
And if a seller offers to pay shipping and insurance
on a really big item, that's another red flag that the deal may
not be on the up and up.
10. Pass on overseas escrow companies
Avoid escrow companies based outside of the United States. Many
escrow scammers are based overseas. You'll want to stick to an online
escrow site that's based in the United States and one you've checked
out carefully. It's also a good idea to use an escrow company recommended
by an online auction site. For example, eBay recommends using Escrow.com
for transactions valued at $500 and up.