How to Protect Yourself from Escrow Scams

Are you planning a big transaction? Remember to use escrow. You can rest assured that the funds transfer with maximum security. Escrow companies can be very helpful assisting a transaction between buyer and seller safely, but you ought to make sure you are using a legit service.

Once both parties meet the agreement conditions, they get the deal and walk away happily. The benefits of using an escrow service is that you can move large sums safely, even if you don’t trust the other party.

  • Have you ever wondered what makes escrow companies deserve that confidence?
  • Would you suspect someone who’s job is to protect your payment?

We don’t just talk about impersonation. Instead of protecting transactions, fake escrow companies do the contrary. As a responsible buyer, you choose an escrow service, thinking you are protected, but may lose it all anyway.

Fake Escrows: Who Can You Really Trust?

Fake escrows use confidence tricks to make you give up control of the transaction to them. They end up ripping off both parties and taking the money deposited. What could give them away?

They Disguise With a Credibility Marker

The fraudulent escrows fake the superficial red flags buyers check before trusting payments. They use a brand name that inspires confidence, fake their testimonials, set faulty ad campaigns, and manipulate their site on the SERPs.

That includes certification badges such us “A+ Rating From BBB” or “Best Platform Rated By Escrow.com.”

Communication

Typically, one of the parties will first get involved into the scheme and refer the other party to this bogus escrow. Usually the one who refers you will know the scheme, but it is not necessary. He might be a victim as well.

After registering in the platform, the victim will try to solve any questions that may arise. Like sales funnels, fake escrows could send email sequences to build up credibility and get you to take action.

Exit Strategy

The scammer takes the deposited funds and searches for the next victim. Of course, there’s an excuse to explain why the fund will continue to be lost. If the excuse fails, the victim reports, but the fraudster can remove the fake site and keep working under another name.

With a good strategy, the same con man can create dozens of scam websites and never get caught. Some are new brands, but others are misspelled. They will likely blame the other party, not the escrow. Victims have low chances to recover the losses.

Types Of Escrow Fraud

Those who choose escrow will likely have some basic knowledge about cyber-security. Given the high probability of getting their cover blown by a potential victim, why would a scammer be interested in comitting an escrow scam? Because it’s easy to run away.

Overnight, a con man can rebrand his fake site and give a new impression, often combining multiple types at the same time:

Fraudulent Company

As simple as it sounds: an escrow you never heard about. This site may have no reviews, but the rates are lower compared to platforms like Escrow.com.

The company has no interest in helping you. Although they may look legit, there’s no guarantee they will deliver.

Apart from the buyer who recommended it to you, there are no online reviews about this brand. 

Cloned / Misspelled Brand

Real escrow sites buy misspelled domains to prevent impersonation. That doesn’t mean that all of them are taken: the ones left are likely phishing sites designed to empty your account.

Needless to say, conditions only benefit scammers. You’d be sharing your account on a copy of the real escrow site. After you enter the data the identity thief wants, they redirect you to the genuine site.

Phishing Messages

Scams also happen on legit platforms. The escrow scammer could be the other party. What if they impersonate an email sending fake information.

“The other party has agreed on the terms. Please, validate the transfer using this one-time link.”

Most phishing emails fail because they’re too generic to hook the victim. Here, the other party already has your email, contact information, and order details. The message they sent you could be so accurate that you perceive it as real.

From here, the phishing link could lead to a cloned site showing how the other party has indeed made the deposit. So you send the payment, do your part of the deal, and scammed you were!

If you visited the site browsing directly, you’d find out these facts were wrong. The client hasn’t paid, but now that you have, they can walk away with it.

4 Signs You Should Stop The Deal Immediately

Your business isn’t a joke. If you did everything right, you deserve the profits that come from the deal. Escrow sites make sure you get paid. But can you trust them? The following red flags will answer your question.

Inconsistency

You can’t explain why, but things just don’t seem “right:”

  • In the about page, the office location is unrelated to the one they stated before.
  • The domain uses an unusual extension. They bought it one week ago, but claim to be in business for over three years.
  • They offer limited payment methods for low or no service fees.
  • The wording is unclear, they overuse safety-related words, and links are broken.
  • Nobody replies to email nor live chat. You call their number, but no-one replies.

None of these errors invalidate the escrow service. But legit sites rarely show these features: suggest the othery party to use an alternative.

Low-Fee / Free Escrow

Escrow services aren’t cheap. If you move over five figures, service fees can quickly add up thousands of dollars. It doesn’t include disbursement, conversion, or payment processing.

It’s not an expense. It costs money, but not as much as trading with no protection. Every dollar spent on escrow is worth it.

But what company do we choose? Escrow.com? Or the one that gives us the best deal? Eventually, you will find low-cost agencies, making transfers almost free.

But how do they make their money? You know the answer. On the contrary, expensive escrows could be pulling advance fees or cramming scams

With a reasonable cost, at least you know what you get. If you don’t know how they get paid, they are trying to scam you.

An exception to this rule are trading platforms that offer an internal escrow service. These will be either cheap or free. Let’s take a look at a few examples:

  • Alibaba is a goods trading platform where you can source literally any kind of product overseas. There is a huge risk involved with sending your money abroad, thus alibaba offers you their own escrow programme.
  • Upwork is a service platforms where yo can search for or offer digital jobs. To ensure that the work you need is done as you requested, upwork will hold your payments and only release them after you confirm your satisfaction.
  • Airbnb is a vacation rental website enabling you to travel around the world with peace of mind. When you pay for an accomodation, your funds are held by airbnb until the day of your arrival. If all is fine when you arrive and you have nothing to report, the payment will be released to your host.

Platform Preference

Escrow.com, Ilex, CM Payments, and Auctionchex are the most popular and reviewed platforms. It makes sense that the client insists on using some of these for payment protection.

It’s suspicious to hear them talk about a new escrow site with no reviews. World-class companies use the top five most common platforms for payments. Why insisting on a new brand with no reputation?

The buyer may mention countless benefits you will only get on this new site. But if that was true, people would have already heard of it. Stick to credible sources.

Payment Methods

On the agreement, they ask you to pay to an agent, not a corporate entity. Why? If person-to-person transfers are the only option, it can’t be a real escrow.

To back up the facts, ask your bank where your money will go once you receive the contract to sign. Escrow.com gives you their account and routing number to receive the funds and release them later.

You can also suspect if the other party insists on using a specific P2P method.

Preventing (And Stopping) Escrow Scams

Validating your escrow company only takes a few minutes and will save you a fortune. Let’s look at five ways you can test it:

Basic Online Check-Up

If you used escrow in the past, you already know about the mainstream platforms. This step serves to prevent scams when working with new companies.

As we mentioned, scammers like to morph their brand identity to keep their scheme working. The downside of it? Marketing. When you create a fake escrow website every week, you can’t build a reputation or rank on Google. It takes hundreds of dollars spent on advertising.

If the company is as good as they say, you’ll find reviews, cases, and track records. If there’s nothing on BBB or Google, say No.

Choose The Escrow Company

As a rule of thumb, always pick the leading platforms, even if it costs a bit more. Companies with no history aren’t worth your time.

Instead of letting the client choose the method, be the one who picks the company. After all, you have the same rights they do, and your goal is to make the transfer as frictionless as possible. Take initiative and reject any proposition if you detect too many red flags.

You may lose the deal if you reject the client’s preferences. But if the persons insist on using a risky method— such as person-to-person— their intentions may be different.

Don’t Rely On Words

If anything goes wrong, you’ll need to act fast to recover the potential losses. Of course, your chances of success depend on how much data you can provide.

As a simple fix, always make copies of any document you sign. Ask the company for evidence to back up any statements.

Even if you’re convinced everything is right, still give yourself time to make the decision, at least twenty four hours. You’d be surprised at how many hints you can find if you give yourself time to think. If they put pressure on you, suspect of potential fraud.

Talk Also About Security

Both parties want the deal. Now, you should inform the other group about potential security issues. What do they think? What do they need to know? What would they do?

If they have escrow experience, find out what they know and double-check the information. If the other party undervalues the risks or doesn’t care, it’s not a good sign.

Once you know what’s going on on both sides, it’s much easier to avoid risks and trade fair and safe. 

Talk To Real People From The Company

By this time, you should know how escrow works, what can go wrong, and how to adapt. You’ve also communicated with the other party to make sure there are no surprises on the transaction. All that’s left is talking to the escrow company.

Why? Because you can only do so much with your own research and assumptions. Until you contact the escrow and get accurate responses, there’s no guarantee that your deal will go well.

You can make security questions. What do you advise to prevent escrow fraud? What will you do if a party doesn’t meet the agreement?

Do not disclose your financial information until you have verified the company.

Escrow Services: Are They Worth It?

People use them to protect large sums of money. Of course, scammers go where the money flows, so make sure to always check your escrow company before you do anything at all. Even if they trick you, you can still take action and attempt to recover the losses:

  • Gather information and report to BBB, IC3, or FTC. The faster you move, the more chance you have to retrieve any lost funds. 
  • Stop any transfers you planned with the other party. Cancel any contracts signed if possible.

However, these risks shouldn’t discourage you from working with escrow companies. When you do your homework, avoiding fraud is simple. If your client really wants the deal, they won’t hesitate to take proper security measures. It may cost money, but not as much as being a victim of escrow fraud.

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nick
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nick

Anyone ever heard of Escrow-service “Secure Shopping?”

Mardie Dies
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Mardie Dies

Transit Delivery Escrow incorporated – is this legit company?

Winkybok
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Winkybok

I was also looking to buy a motorhome but then I see that it has to be bought without seeing it..so the red flags went up. So I started researching before letting my money out of my hands. The add is for a 1998 Allegro Bay Motorhome..only 7800..the pictures of it are gorgeous. here is first email:Hello , The motorhome is currently located at approximately five miles of Coral Springs,FL stored in freight carrier and the pick it up option is not available, but it could also be transported free of charge by Live Shipping Auto Shippers http://doiop.com/live.shipping.com. They works… Read more »

Olivia
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Olivia

http://www.direct-home-limited.uk.tc/

this escrow website is a fraud! found it from a guy off craigslist who insisted i send him a 2400 dollar deposit! FRAUD!!

rebekah
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rebekah

i was going to buy a travel trailer from someone in colorado and i was supposed to send the money to this live shipping line company. This site has saved me thousands, than you guys.

Janelle
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Janelle

Here’s another one with a Camper to sell. This was on Craig’s list showing that it was in Harrison, AR. When my husband asked to see the camper, here’s the reply he received: From: David Krieger [mailto:[email protected]] Sent: Friday, September 02, 2011 9:26 To: David Staib Subject: Re: Re: Hello again, The camper is currently located at approximately five miles of Denver, Colorado stored in freight carrier and the pick it up option is not available, but it could also be transported free of charge by Live Shipping Auto Shippers their home page: http://zigs.me/das-auto-shippers They works with US Army, we… Read more »

shakes
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shakes

Here is another fraudulant escrow site: http://www.parcel2ship.com.en-catalog.info/en_language/webship.high.html I contacted the real parcel2ship company and they do not have this site listed in their company. I then found related scam posts relating to parcel2ship. This was a craislist deal for a computer – too good to be true kind of deal. I asked the seller if there was another way of making the transaction and he just sent back the same email referencing the scam site. Beware as I read that there are about 10 scam sites to every legitimate escrow service site.

Beffers
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I purchased a camper thru craigslist for 7200.00. The seller wanted me to use Net Assistant Trader. I looked at the site and read thru all the warnings. I confirmed that my bowser read exactly it was supposed to, confirmed the invoice that was sent to me was also as it said it should be. I was asked to wire money to a Bank right here in Chicago, IL right here in America and when I went to our bank they verified that the routing number was in fact that bank. I registered, wired the money. I recieved emails from… Read more »

viragos
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viragos

anybody ever heard about GronoLogistic.t135.com?an uk address company. I had make a deal with them bcoz i don`t known that company is fake.i`m from malaysian.So i follow the instruction to transfer my money via western union about rm7560.00 to buy the bike with the seller in u.k..so i was get screwed with that fake company..and now that bike still not come to me..i`m was fear with my mistake cause didn`t make an investigation before send a money by using western union like they asking for.

notyetfooled
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notyetfooled

There are a variety of reviews about ONLINE TRADE POST many of them positive. This is a load of crap, OTP onlinetradepost.com is a scam. I researched two of the locations in the Seattle area that they list on their website. One which is located at 1520 2nd st Seattle as their payment office is actually “joes mart” I spoke with two employees at that location, they say they have no idea what Online Trade Post was, however one of them did mention that they had received a legal notice indicating that someone in South Carolina was using their address… Read more »