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Phony online escrow sites snare victims

An escrow fraud victim may be sending their money or their merchandise to another American who honestly believes they're working for a company based in Europe.

Scammers recruit these unsuspecting accomplices through online employments sites such as Monster.com and CareerBuilder.com. The consumers believe that they're working as correspondence managers or finance managers for companies based in Eastern Europe.

"The suspects are having no problem posting these jobs and recruiting hundreds of consumers all over the country," says Barry Mew, a spokesman for the Postal Inspection Service.

Some scammers go to great lengths to make these phony jobs seem very professional and on the up and up.

Red flags waving everywhere
"Some scams with unsuspecting middlemen are very elaborate," says Steve V., a former victim of escrow fraud who runs EscrowFraud.com. "One company put people through a six-month training program."

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No matter how professional a company seems, no legitimate overseas company needs you to collect and re-ship packages.

"There's no legitimate job receiving and forwarding packages. If that's the job, run as fast as you can," Mew says.

And no legitimate company needs you to receive money in your PayPal account or bank account and then wire the money overseas.

What should you do if you've been duped by a phony employment ad? Contact the police and the FBI. And because the scammers have your personal financial information, you'll want to protect yourself against identity theft. An identity theft checklist from Bankrate.com will walk you through the steps.

What to do if you're a victim
If you think you've fallen for an escrow scam, c
ontact your bank immediately and try to stop the payment. If you wired your payment, you may able to stop the transfer if you contact your bank within 48 hours.

If you've sent merchandise to a scammer, contact the shipping company and halt the shipment. If you move quickly enough, you may be able to get your item back.

Steve V. was able to retrieve his $1,200 laptop before it reached a scammer in London.

At the buyer's recommendation, Steve had agreed to use an escrow service known as TripleGuardian.

Once he received an e-mail from TripleGuardian saying the buyer's funds had arrived, Steve shipped his laptop to the buyer's London address.

When TripleGuardian sent him an e-mail saying they were having trouble with their Web site a couple of days later, Steve started to worry.

"It made me really nervous. I called UPS -- the shipper," Steve says.

One story's happy ending
His laptop hadn't left the country yet. He paid UPS $100 to get his laptop returned to him. He started EscrowFraud.com to warn others about escrow fraud.

"I'd say 90 percent of victims find out too late," Steve says.

But even if you can't get your money or merchandise back, you can take steps to protect yourself from identity theft. If a scammer swiped any of your personal financial information in the scam, you're bound to be a victim.

If you gave a phony escrow site a password that you use on any other account, you'll want to change that password ASAP.

If you provided financial account information to a fake escrow site, be sure to alert your financial institution about the fraud. It's important that you safeguard your account immediately.

Be sure to report an escrow scam to the authorities. Reporting an escrow scam may help investigators crack international fraud rings.

Agencies to contact:
File a report with the Internet Crime Complaint Center, the Federal Trade Commission, and the local office of the Secret Service.

You also may want to file a report with your local police and your state's attorney general.

If the phony escrow site uses the United States Postal Service to deliver money or merchandise, file a mail fraud complaint.

If a fake escrow site uses Western Union to transfer money, report the fraud to Western Union. If you are a Yahoo! auction customer report the fraud to Yahoo!

If you got scammed while buying or selling an item on eBay, report the fraud to eBay.

You may also want to post your story on eBay's Escrow Discussion Board. This is a great way to warn other consumers about the scam. Reporting the company to the Better Business Bureau is a good idea as well.

And if the fake escrow site has copied content from Escrow.com, report the fraud to Escrow.com.

-- Posted: May 17, 2004
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See Also
PLUS: 10 tips for spotting online escrow fraud
8 common scams: How to spot and stop them
How to bid safely in online auctions
Financial advice glossary
More advice stories

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