False Escrow Services

An escrow service is designed to provide security to both the buyer and the seller; the buyer deposits money with a third party, which holds the money until the goods are received by the buyer. When the buyer has accepted the delivery, the escrow service pays the seller.

Whilst this is a good idea in theory, there are unfortunately a number of fraudulent escrow services that appear legitimate, but are in fact run by fake sellers, and results in the buyer losing their money and never receiving their goods.

How it Works

The scam usually works like this: The 'seller' places an advert for a car, usually priced attractively to grab the buyer's attention. When the buyer offers to pay for the car, the seller suggests a specific escrow service that they've used before as a safe and secure means of transferring money. The escrow service will usually have an official looking website, with logos, false license numbers and Copyright details to make the site appear genuine. However, once you've deposited your money with the escrow service, the seller vanishes, taking your money with them.

Unfortunately, neither the escrow service nor the buyer will have given you a legitimate landline number that may be traced, and any email address will have been web-based, which again is untraceable.

What You Should Do

To avoid being taken in by this scam, make sure you follow these tips:

• Check that the escrow website has a street address, email address and a landline phone number. Telephone the landline number and make sure that you are able to speak to a person; if you can only get hold of a recorded message, then the service is probably fraudulent. You should also write to them using the email address; if you do not get a reply, do not send them any money.
• Avoid escrow services whose website address has a dash (-) in or that end in:
  • .biz
  • .cc
  • .info
  • .org
  • .us
• Be wary if you log onto an escrow site which does not say "https://" at the start of the URL or if the padlock icon does not appear at the bottom of your screen. This means that the site is not secure.
• Do not use the escrow site if they ask you to send your money directly to the other party; a legitimate service would never do this, they would always ask you to make the payment to a corporation.
• Be suspicious if the escrow site asks you to wire payment via Western Union; this procedure is not traceable.
• Check the details of the escrow service with Companies House - all legitimate companies will be registered. You could also contact Trading Standards to establish whether or not there have been any complaints about this service.

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