Fake Escrow Scams
Many people who go out looking for those larger or more expensive items to purchase on internet selling sites, may bump into something they don't expect; an Escrow Service Scam!
Before we get into the actual scam, let's take a moment to look at what Escrow actually is, specifically Internet Escrow.
What Should It Do?
Without getting into technicalities and mumbo-jumbo, an Internet Escrow service operates on the principle of buyer and seller not having a trust relationship. That's fair as you may be trying to buy a motor vehicle, boat, jewellery or other expensive item from someone you do not know. This means that in order for buyer to send money without loosing it, and seller to send goods without loosing them, the Escrow acts as a go-between to secure the transaction.
The buyer would send payment to the Escrow service, whilst goods would be send to them too, or via a verifiable courier/deliver company. This is designed to protect both parties, because if one fails to deliver, the other gets their stuff back again.
It is a simple solution, yet one that is very easy to copy for illicit purposes.
Let's take buying a car as an easy example. This is quite apt as there are huge numbers of automotive sales and auction sites on the internet. Equally, each of these sites has a fair share of scammers scurrying about placing fake advertisements.
So let's say you have spotted what seems to be a nice buy, probably much cheaper than you would expect. After some initial chit-chat you discover some odd yet plausible reason why the car is so cheap, and probably the car is not in the same country as the seller. Likewise, the car may actually be in a different country to your own.
From the onset of your dealings there are some very standard warning signs that the vast majority of internet sales scammers will use.
... refusal to view goods/meet buyer
By far the biggest sign of a scam being perpetrated against you, is the fact that you cannot actually visit the seller to view the goods. Even if the seller is in the same country, state, city or town, you may get a really dumb excuse. If the location of the alleged seller (and/or the goods) is accessible to you, and you get a refusal for whatever reason, it is time to walk away
and find another seller.
... seller/goods in another country
Next on the agenda is the physical location of the alleged seller. Is he/she in a different country to yours? This should be your second sign of a potential scam and you must prepare to walk away. Likewise if the goods are in another country you have to be very wary at this point, as it is all too easy for things to badly wrong very quickly.
International Private Trade
As a private citizen, dealing with anyone over an international boundary is frought with danger. Never mind the small print on any website you are using as the rule of Law will not help you recover your hard-earned cash if someone collects it in another country. The police will be unable to help at all, and the site that you saw the advert on is not liable either.
Take note that on very much all of the large selling/auction sites there are big warnings about dealing with international sellers (and buyers for that matter). They do not put up those warnings to cover their corporate behinds, it is very valid and pertinent information that you really NEED
to read. If you do not listen, you WILL
eventually loose money to a scammer.
If you get through the initial stages of your purchase without smelling a rat, or wondering whether there is a tuna sandwich under the fridge, the next stage may come to you as a surprise.
This is the part where many people will get scammed, simply because they have not noticed the warnings signs, as above, or they simply have not bothered applying due dilligence.
... we must use escrow, for safety
The seller will insist on using an Escrow service that "they" are familiar with. They will make it sound as though they are doing you a favor, and ensuring that you know they are not trying to rip you off. They will not allow the use of any other service, no matter what you say. This is the point where you are on the threshold of being duped.
... please see this website and act accordingly
If you agree to use their preferred Escrow service you will be pointed to a website that looks very convincing. Eastern European Escrow scammers have some rather good looking fake websites. Their poor relations in Africa who attempt the same thing are not so good looking, but are still good enough to catch people out. You will read the conditions and possibly make contact with the website yourself, after suitable prompting from the seller of course.
...wire the money
If nothing grabs you as being suspect, then this is the very final piece to the jigsaw. If an Escrow Service asks that you wire the money to them via Western Union or MoneyGram (or similar cash transfer services) then you are about to get scammed
. I have not seen any legitimate Escrow Service that allow such transfers. Even Western Union urge people not to use their services for any form of business transaction. Normally you would transfer payment into the Escrow bank account directly from your own, or send a cheque/money order (subject to long delays for cheque clearances). In addition, check that the wire details match the site and never send to a third party. Escrow sites are specifically set up to handle your money, so involving a third party is unrealistic.
More Ways To Spot Dodgy Escrow Sites
...customer service phone numbers do not pick up
Calling the customer service number is a check on whether there is actually someone at the other end of the wire. If you discover an answering machine/voice mail or even fax tones on the other end, it is a good sign of a dodgy site. Sometimes listed numbers will be made up, so a dead or unobtainable number line is another red flag. In addition, if the number listed is actually a mobile number, then you run away screaming. Customer service does not get done via mobile phones. Use International Numbering Plans [link
] to check the number.
...address of the company is not listed
Have a look for a street address on the Escrow website. If you cannot find one, then do not use them as it is certainly a bogus site. Legitimate companies do not hide their physical, or registered, location. In the UK for example it a legal requirement that any British business with a website displays the company address. Does the street address actually exist? Have a look on Google Maps or similar internet based map search engine. Can you actually find it? If not it is yet another sign of a potentially bogus site. The search may be more difficult for you if it is located in a different country and may require assistance from someone else.
...website endorsements and security seals
To give a legitimate appearance, fake Escrow sites will usually display some form of security seal or accreditation. You must check whether any stated TRUSTe [link
], Better Business Bureau [link
] and VeriSign Secure [link
] seals are in fact legitimate. If the site claims to be accredited to 'such-and-such' group, be sure to check that it is
actually registered as some fake Escrow sites have ripped off legitimate registration/licensing details.
...been using them for 'years'?
Some fake Escrow sites will have copyright information placed usually at the very bottom of the page. It is quite common for the site to purport that they have been in existence for a number of years, when in fact the website has been in existence for less than a year. It is also common for your seller to state that they have been using the company for a number of years too. You can check the registration details of a domain, by using any good WHOIS tool on the internet. Two of the biggest and well-known are DomainTools [link
] and DNSStuff [link
]. By looking at the "Date Created" or "Date Registered" for the domain you can then easily spot a faker. In addition, fake websites are usually registered for a minimum amount of time (one or two years max).
...domain name ends with .org or other oddities
If an Escrow service domain name ends in .ORG then there is no need to look any further. No self-respecting legally operated Escrow service would ever attempt to pass itself off as a non-commercial/non-profit organization. If you see .org in the name, walk away! There are many different domain endings but sticking to a .COM or a .NET is a safer bet. If it's a .BIZ, .US, .CC, .INFO and the like then you may as well start looking for a new seller.
...sloppy and badly written content
Some fake sites are very badly put together and may contain bad links, dead pages, spelling and gramatical errors. All of these point to a site that is not professional in any way, so even if it were real one should not feel comfortable giving them your cash. By contrast, as mentioned earlier, even very flashy and well put together sites can be a scam too.
...use the search
Load up an internet search engine, such as Google, Yahoo or your personal favourite and search for the company you are being asked to use. If you cannot find details, then be very wary indeed. Phrases such as "domianname.tld + fraud" or "domainname.tld + scam" can give better indications. If the site is known, then some information may have been posted to an anti escrow/fraud site already. However, even if the search brings up results, it does not guarantee the site is legitimate.
...it looks like another site
Fraudulent websites are designed to be reused, and are issued to scammers as a template. They may change any number of items in the site, such as location details, company names and the like, but the design and layout will remain constant. Naturally this is more difficult to spot, but if you take a sentence from one of the pages and feed that into a search engine, you may actually find a twin sister. If that is the case, time to walk. Beware also of direct rip-offs of legitimate Escrow services. They may look like the real thing, but if you go through the list above you should be able to say "it's a fake".
Find Sources To Help You
There are groups out on the internet that can help you verify whether a website is legitimate or not. For Escrow websites the best place to ask would be Escrow-Fraud [link
] or second at Artists Against 419 [link
]. Both groups are adept at identifying and knocking down scammer websites. Escrow-Fraud have a great page which details some of the legitimate Escrow sites out there [link
], so well worth visiting this group.
This has been a quick overview of Fake Escrow Scams, how they work and how to spot one. Whilst some of the post above may go over some people's heads it is hoped that the essence of the details stick in your mind and proves useful. There is nothing wrong with being suspicious, in fact on the internet that is actually quite healthy an attitude.
Never be blinded by the deal on offer, because there's an old adage "if it looks too good to be true, then it is!
- Wikipedia (Escrow) [link]
- Wikipedia (Internet Escrow) [link]
- Wikipedia (Due Diligence) [link]
- Wikipedia (Site Killing) [link]
- Wikipedia (False Escrow) [link]
- Buying and Selling Online Safely (lets-ride.com) [link]
- International Numbering Plans [link]
- TRUSTe [link]
- Better Business Bureau (US/Canada) [link]
- VeriSign Secure [link]
- DomainTools (Whois) [link]
- DNSStuff (Whois) [link]
- Escrow-Fraud [link]
- AA419 [link]