Fake Escrow Accounts Snare Unsuspecting Victims

Fake Escrows were once the scourge of the online marketplace, but in recent years their use has been in decline. As people become aware of this threat it’s becoming increasingly difficult for fraudsters to create a convincing illusion via a fake escrow account. However, this type of sting operation has not vanished completely.

Escrows, as we know, have become a common part of the online shopping experience. If you’re selling an item online, you’ll wait for the buyer to deposit funds into an escrow before you send the item. This gives you a certain reassurance that you’ll get paid. Once the item arrives and is approved, the escrow can release the funds into your bank account. It provides reassurance for both the buyer and seller.

Or does it? If you’re a fraudster looking for a fast buck the easy way around this obstacle is to set up your own fake escrow. Tell the seller that for your protection you’d like them to accept payment through a particular escrow service. Once the item has been dispatched you can then close down the service and escape with the money.

It works equally well in the other direction. A buyer can insist on their fake escrow being used before they send the item. Once the funds are deposited, they vanish and the item never appears.

Today, though, thanks to a combination of public awareness, more secure internet purchasing mechanisms and the rise of highly reputable organizations such as PayPal, it’s become much more difficult for the scammers to find willing victims.

Indeed the most famous story in this area revolves around a would-be scammer who had the tables turned on him.

In 2004, Jeff Harris from Seattle put a G4 PowerBook up for sale on eBay. He received an email offering to buy it at an above market price if he would close the auction and take the money through an escrow of the buyer’s choice.

The spelling errors and link to the site persuaded Harris that it was a scam, and instead, he sent a ring binder with the words P-P-P PowerBook printed on the outside! To add insult to injury he also enlisted the help of users of the Something Awful online discussion forum to try and flush out the trickster.

Use a Secure Escrow Service like PayPal

Because of stories such as these, these scams are relatively easy to spot as long as you know what you’re looking for. Escrows you have never heard of should instantly attract suspicion, especially given the almost universal use of sites such as PayPal. Messages with spelling errors, broken links, and glitches in the web content also serve as big pointers.

If you’re concerned, suggest the other party uses an escrow service such as PayPal. If they’re genuine, then they should have no problem with this; if they continue to insist on their particular choice of escrow then the chances are that it’s a scam.

Our own awareness is making life more difficult for the fake escrow bandit, but it’s not done yet. There are still plenty of people whose lack of knowledge makes them vulnerable. That, together with the crook's innate ability to adapt and evolve means that fake escrow fraud is unlikely to disappear anytime soon unless we all remain on our toes.

Image Credit: Steve Ganz