Part 1: Tips for Avoiding the Fraudulent Escrow Service Scam.
Always consider every escrow company to be fraudulent until you have checked them out and proven them to be real.
Do not use a seller's positive feedback to gauge their honesty! Too many of you are using the wrong criteria to determine someone’s honesty on eBay. The eBay feedback system was great in its day, and might still be ok to use for books, CDs, DVDs, etc., but not for big ticket items. It is not foolproof, and I no longer trust a person's feedback as proof of their honesty. Thanks to eBay account hijacking, it might no longer be that person with great feedback that you are dealing with.
Avoid dealing with sellers who end auctions early, yet continue to strike a deal with you via email. Remember, you are now outside the protection of eBay and it's internal escrow. You should always be suspicious when a seller ends an auction early. There's no legit reason to.
A legitimate escrow site would NEVER send you an email telling you to either send your money or or your product to the other party. The transaction is only tracked online, and never through insecure emails. But too many victims do as they are told.
If you get an email "from eBay" where eBay tells you to send money via Western Union, it is a fraud. eBay would never in a million years tell you to use Western Union to pay for auctions, in fact, they warn you against it. What you got is known as a Phishing email from the scammer.
Do a Google search on the escrow's web site. Legit escrows have lots of Google results. Fake ones will have one search result, or usually none. Look for complaints other victims have posted online.
If they address you as "Dear Sir", it's probably a scam, because they are using pre-written response templates. Why don't they say something like "Jeff, let's go ahead with the deal".
DO NOT deal with any eBay "Seller" who contacts you after seeing you bid on another auction!!! Another "seller" contacts you through your bid and says "hey Mr. Sucker, I saw you bidding on that c
amera. I have the same Camera, with more accessories up for sale for $800 less, I don't even have time to list it on eBay yet. I need to unload it soon, I just got laid off, my loss, your gain, if you want it, we can do the deal through xxxxxxxxxx escrow site.
If you are the seller in an auction and send an expensive product through an escrow, you should ALWAYS require a signature for delivery.
Do not deal with an escrow company unless you absolutely verify they are at least 4 years old through Division Of Corporation lookup. Don't believe the Company Info page, they frequently lie about their experience Always independently verify all claims. You have been warned.
Always trust your gut feeling. If you get a bad feeling about something, trust you instincts, don't do the deal. Others will come along later.
Never ever use the escrow service recommended by the other party, buyer or seller. Never ever! If a seller ever tells you to use a particular escrow service, be afraid. Be very afraid! All sorts of red flags should go up in your brain.
Be extremely suspicious about any car that is priced well below similar models for sale. If that Porsche Boxster is $15,000 cheaper than all the others, it's could be a phony scam sale. They use these lower prices to reel you in.
The person you are dealing with offers to pay the shipping and insurance. Come on, use your head! When was the last time anyone on eBay offered to pay shipping for you? Give me a break. It costs $1000 to ship a car.
Look for the eBay "Changed ID" icon next to the seller's ID name. If they changed ID in the last 30 days, don't deal with them yet. Few legitimate people change their ID on eBay. 99% are fraudulent, 1% are legit. Black jack odds are better than that.
Anytime someone emails you to say "I used this escrow service many times!" You should be skeptical. How often does someone really need the services of an escrow company? Give me a break...
When you log into a fake escrow s
ite, it does not say HTTPS://xxxxx at the start of the URL, and your "SSL secure padlock icon" does not come on at the bottom of your browser. This means the site is not a secure site, so they are lying and you know it's fake.
A Real escrow company would never tell you to wire them money via Western Union, e-Gold, VUpay, etc. Western Union transfers CASH from one WU location to another, not to a real and traceable bank account! DUH! The only time you should be using Western Union is to bail your drunk loser of a brother out of jail. A real escrow company would tell you to use YOUR bank to wire money to THEIR bank, with their routing number and account number. There is a form you fill out and it must show who their beneficial bank is. You must still verify with your bank where the receiving bank account is REALLY located for their bank account before you wire, it could be a bogus account in Romania, Latvia, Estonia, the Carribbean.
Remember that the odds are 9 to 1 against you finding a legitimate online escrow service.
If you are stupid enough to wire escrow money through Western Union, don't use your mother's maiden name as the security question and answer. That will give them a foot in the door of your credit card companies. Instead make your security question something like this: Q: What is the first name of the intern who had sex with Bill Clinton? Answer: Monica.
Don't let scammers bait you into thinking you can use Western Union as an escrow, or that your money is protected by a password. Most of these scammers are in Romania and Nigeria, which are so corrupt, you don't even need a password to pick up the money. All you need to pick up that money is a pulse.
Try to close your deal in person if possible. For example, if you just saved $5,000 on the car, spend $300 on a plane ticket to go see it.
Don't buy a car from a foreign "seller" online. Go get the car yourself, or don't close the deal. The heck with escrow. Foreign purchase transactions are for sea
soned veterans, not you. There are too many complicated import laws and DOT safety and emissions hurdles for you to deal with.
Avoid dealing with any escrow company that has a dash in the name, like secure-escrow.com. We saw maybe 1 out of 300 sites that were legit.
Avoid escrow companies that claim to be licensed in all 50 states, it's probably a lie. Even some top escrow services refuse to license themselves in Arizona which has licensing requirements that dictate the deposit of an unreasonably large amount of money as a condition for a license. California has tough licensing requirements too, so if you don't see them licensed there, you know they are lying.
Some phony escrow sites list a license # of: 963-1867. Be suspicious if you see this, it was cut and pasted from the legitimate Escrow.com.
Go to Register.com and do a "whois" lookup of the escrow company domain name. If the domain name was registered only weeks before, consider them to be fraudulent. The scammers usually reserve several names, rip off a few people, then dump the site.
Avoid any escrow company with eBay's name embedded in it, like Ebay-Escrow.com. They are all frauds. eBay uses the legitimate Escrow.com.
Don't foolishly think that you're safe just because your sale or purchase of a car took place through Autotrader.com, Cars.com, CycleTrader.com or eBay.com. Those sites are highly targeted by scammers.
Don't get suckered in by the professional look of an escrow company website. I can do that with Microsoft Front Page in 2 hours.
If the escrow company is located outside the U.S., don't use them. Are you nuts? There is no reason to use an offshore escrow company. They are not governed by any U.S. Laws.
If the escrow site has a "Verisign Secure Site, Click To Verify" logo on their web site, it is most likely fraudulent. Click on the logo and if all it does is send you to Verisign's home page, they are fraudulent. Same with Internet Security Alliance, and TRUSTe logos
. Always VERIFY if they are licensees of these organizations. Fraudulent websites like to paste them on their homepage, even though they are not licensees.
Avoid escrow companies that appear to be a well known company, but are not, i.e., WellsFargoEscrow.com, WesternUnion-Escrow.com.
Assume that just about any escrow service with the word "Safe" or Secure" in their name are neither safe, nor secure.
Avoid dealing with any escrow company that has a ".ORG" as part of their name. Legitimate escrow companies are in business to make money, and should never try to pass themselves off as a non-profit organization, which is what the .ORG means. Any U.S. based escrow should end in .COM.
Avoid escrows that end with .BIZ, .CC, .INFO, ,US, you get the picture. That's all sleaze territory for web site extensions, inhabited mostly by cyber squatters.
If you're buying a used car, email the seller for a VIN#. If you don't here back from him, it's a fraud. Some scammers do actually respond back with VIN#s though, probably copied from another online ad, so be careful.
If the seller changes email addresses on you, stop dealing with him. He probably changed because either we, or another victim reported their previous email, and had their email account shut down. They will make up some virus excuse.
If the escrow company has the BBB logo on their site, but the link does not go to a BBB review of their business, then the site is a fraud.
Verify with the Better Business Bureau at BBB.com if they have a reliability report on your escrow company. It takes 5 seconds. Legitimate escrow services are members of the BBB, and should have a "Satisfactory Record" on the BBB Reliability Report that pops up.
Avoid dealing with an escrow web site that does not have BOTH the address AND the phone number listed. Always call the phone number to make sure it's real. If you get some bogus message that says "leave a number", it's fraudulent.
Remember that once you send mon
ey using Western union or E-Gold through an escrow company, you will never ever see that money again. Once the cash is wired to the other end and picked up by the seller, Western Union cannot get it back.
If you used PayPal to wire money to the seller, you cannot get it back. This is because PayPal is not an escrow service. They just instantly wire the money into the seller's checking account. Once they get the money, the scammers close the checking account, so PayPal could not get the money back even if they wanted to.
Before you wire money through Western Union, call the Western Union Fraud Department, 1-800-325-6000. Explain your purchase situation and ask them if they think it's a scam.
No law enforcement agency, no court, and no lawyer will help you if you get scammed.
Before you sign up, send the escrow company a simple email question and see if they respond. If they don't then consider them to be fraudulent.
Thanks to Jeff Ostroff