What is Internet Escrow Fraud?
What is Internet Escrow Fraud?
What is Internet Escrow Fraud?
The Internet has made it possible to buy virtually anything in the exact type, maker and colour you want - even for cars, motorcycles and appliances regardless of geographic location. Escrow sites have made a secure exercise of ordering for these kinds of big-ticket items, because they ensure payment and product delivery. But what happens when swindlers and criminals lure gullible purchasers and merchants into fake escrow sites to poach their personal financial information, money and products?
Sadly, escrow fraud is a fact of life. Some unscrupulous persons set up phony escrow sites and then present themselves as shoppers or sellers in order to dupe inexperienced people out of their money or goods. When an escrow poseur masquerades as a vendor, he advertises an article for sale, and sweet-talks the purchaser to deposit his money with the fabricated escrow site - often advising him it's for his own safety. The fraudster gets the money intended for the seller, and the purchaser receives nothing in return.
When purporting to be a shopper, the criminal examines auction and classified sites to look for an article he prefers and pretends to purchase it. The con presses for the use of the fake escrow site, which transmits to the merchant a message indicating the consumer has remitted funds so the supplier ships the article. The swindler gets the goods and the vendor receives nothing in return.
How to spot and avoid bogus escrow sites
Avoiding escrow fraud is really simple if you follow a few basic rules:
1. Know of a number of popular and legitimate escrow sites before purchasing or vending online
2. Beware of a buyer/merchant who is intractable about the use of a specific escrow site you are not familiar with (some use many sites to bewilder wary buyers/vendors)
3. Beware of escrow sites that are crudely designed, look unreliable, shows many spelling or grammar mistakes, and/or don't have a lot of information about proper use of the site or who runs it. Legitimate escrow firms invest a lot of time and money to put up quality sites.
4. DON'T use an escrow site whose URL (web address) doesn't start with "https://" - the "s" is important; it implies a secure site with 128 bit encryption technology. An unsecure escrow site is most likely fake.
5. Be cautious with escrow sites with suspiciously low escrow rates. Low escrow fees are sometimes used to attract people in.
6. NEVER remit funds using untrackable money wire firms, like Western Union or Money Gram.
7. DON'T entrust escrow funds to an individual or agent. Legitimate firms will allow you only to entrust funds with a corporation that is licensed to facilitate escrow transactions.
What to do if you suspect an escrow site as fraudulent
Here are some tips to double-check whether an escrow site is legitimate:
1. Perform an internet search for the company. If only the escrow site comes up, it's probably a bogus site.
2. Look for the company's domain name in a WHOIS database. If the domain was registered recently or the contact information does not check out, steer clear of the site.
3. Confirm if the company is licensed and who the licensing authority is. Then look up the licensing authority and double-check the registration numbers provided. Make sure that the registration number is issued to the company. Look closely at the licensing authority's own site. If the site for the licensing authority contains any of the red flags for bogus sites, assume that this site is fraudulent - and so is the escrow company it authorised.
4. If an escrow site claims to be affiliated with Ebay, Yahoo! or a similar company, confirm the relationship from the alleged affiliate.
5. Any escrow site that purports functions as an agency of a larger, better-known escrow firm is not likely to be legitimate. Reputable escrow firms rarely operate in this way.
What to do if you fall victim to a fraudulent escrow site
If you have fallen victim to a fraudulent escrow site, you ought to tell the authorities immediately and act with dispatch to protect yourself against identity theft.
In the United Kingdom, you can report Internet and escrow fraud to the Metropolitan Police
In the U.S., you can report fraud through your local police, the Secret Service, and/or the Internet Crime Complaint Center.
If the fraudulent transaction occurred in connection with Ebay, Yahoo!, Craig's List or a similar site, you should report the incident to that company as well as the police.
You can also report the website to the company with which the website is hosted and ask them to close the website.
For reporting identity theft in the United Kingdom, visit the Metropolitan Police website.
In the U.S. report identity theft with Federal Trade Commission.
Staying on the safe side
The most effective method to steer clear of an online escrow scam is to use a popular and reliable escrow firm, such as PayPrimo.com. PayPrimo is a licensed and authorised escrow corporation with a reputation for reliability. The PayPrimo site is not complicated to use, has many types of traceable payment options, and uses at least 128-bit encryption security for your safety.
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