How to Avoid Online Escrow Service Fraud

| 1 Comment | No TrackBacks
There are a lot of scams out there, and sometimes it can be difficult to know who to trust.  It can be especially hard on auction sites like eBay where you have to put faith in someone else to deliver you a product that you may have only read a stock description of and seen only one or two photos with bad lighting.  If you don't use PayPal to pay for your eBay purchases then you might consider using an escrow service to ensure that an unscrupulous seller doesn't get away with your money.  But what do you do if the entire escrow service is a scam?

According to the Internet Crime Complaint Center, this type of escrow services fraud goes above and beyond the traditional online auction scams that, you've likely heard about. These tech-savvy scammers went so far as to create legitimate-looking escrow company websites and then listing items on auction sites with instructions to use the escrow sites for payment.Victims would assume that this was a safer way of doing business and would comply; sending their money to what they thought was an escrow company.  The items that the victims thought they won --never arrived. And when they tried to file a complaint and stop payment with the escrow company -you guessed it; they learned that the company didn't even exist.

This scam is likely a response to people becoming more cautious about online auctions in general; too many stories of items never arriving or boxes arriving that were filled with junk have made the news so online shoppers are more cautious about who they give their money to.  By incorporating a fake escrow service with a professional-looking website into the scam, these savvy scammers can take advantage of individuals who are trying to stay safe online by convincing them from the start that their purchase will be protected.

EBay actually has a page in their help section that tells you about the payment options that can be used by sellers on the site.  Escrow is listed as an option, and someone who just glanced at the options listing might assume that all escrow companies were equally represented on the site.  If you scroll down and actually read the text for the "Escrow" listing, however, you'll notice that the page mentions this very scam and suggests that buyers only use for escrow payments for eBay purchases.

When it comes down to it, the best way to avoid scams like these is to make sure that you only use payment options that you know and trust.  Not everybody understands PayPal, or the benefit of having an account. However, if you use PayPal to pay for an eBay auction then your purchase should be covered by PayPal Buyer Protection.  The same goes with Bill Me Later, a PayPal-related credit service; if you use it on eBay then you'll have some protection from scam artists.  There are other legitimate payment options such as Skrill, ProPay and Paymate that eBay and other auction sites allow as well in case you don't have a PayPal account or the seller in question doesn't use PayPal.  Always ask questions before you use an escrow service. If a seller demands that you use an untraceable payment method or a method that you've never heard of and can't find any information about -that's a red flag. When using 

Staying safe online is important, especially when you're shopping or trusting others with your money.  Be sure to Stop. Think.Connect.and then shop wisely --both now and in a matter of a two months --when the holiday shopping season (and cyber predators) will go into full gear. 
Enhanced by Zemanta

No TrackBacks

TrackBack URL:

1 Comment

The only fully licensed and regulated online escrow company in the US is And they are recommended by eBay.

Leave a comment

A memoir exposing the steep price consumers pay when facing mortgage servicing errors, inaccurate credit reporting, illegal debt collection practices, identity theft and weak consumer protection laws. THE BOOK » DENISE'S STORY »