How To Avoid Being Ripped Off By Phony Escrow Services On Online Auction Sites

Escrow services are very useful financial devices for ensuring payment for large ticket items purchased on online auction sites. When buying using an escrow service, the buyer will deposit funds with the escrow service for the purchase.

Whenever the buyer has received the merchandise and verifies that it is what was ordered, the escrow service will release the funds to the seller. If the goods are not what were expected, the escrow service will release the funds back to the buyer after the seller indicates that he or she has received the merchandise back. Since escrow services charge a fee for ensuring the safety of the transaction, it is typical to see escrow services used for the purchase of big ticket items such as automobiles. Unfortunately, enterprising scammers have realized that setting up a phony escrow service is a nice way to score a quick payday. The only way to protect yourself from phony escrow services is to avoid their use entirely or educate yourself so that you can know how to differentiate legitimate services from bogus fronts for scam operations.

Most online auction sites partner with escrow services in order to integrate the escrow process seamlessly into the purchasing experience. Be wary if the seller contacts you requesting that you utilize a different escrow service. They will generally have a valid seeming reason for wishing to use an alternate service, but if you choose to allow their request, you have opened yourself up to being scammed. As a sanity check, you can go online to verify that the escrow service is valid. Never trust the website of the escrow service itself--it could have been constructed by the scammers. Rather, check consumer related and online auction message boards, read reviews written by others, etc. Of course, the safest and most secure policy is to simply use the escrow service recommended by the online auction site. If the seller refuses to go along with the preferred escrow service, then you should end the transaction to avoid losing your money.

Along those same lines, be cautious if the seller contacts you through email or other mechanisms instead of using the internal communications systems of the online auction sites. These internal mechanisms are provided to give buyers a safe harbor from scams. By communicating with the seller using insecure channels and agreeing to financial dealings with the seller outside the auspices of the online auction site, you are putting yourself at risk. You also forego any possible corrective action that the auction site would take on your behalf if the scam occurred using the online auction site facilities.