How can I tell if an escrow site is fraudulent?
We encourage you to always use Escrow.com to protect your online transactions. Fraudsters often use a variety of excuses for why they cannot use Escrow.com. If you choose to use a different escrow service, the following points may help keep you from becoming a victim:
- Fraud sites often claim they are associated with Escrow.com. However, Escrow.com is not associated with or affiliated with any other escrow site.
- Many sites claim their escrow services are provided by Internet Escrow Services (IES). This is because IES can be verified to be an independent escrow company licensed in California. However, Internet Escrow Services (IES) is a wholly owned subsidiary of Escrow.com and only provides escrow services to Escrow.com.
- If a site looks similar to Escrow.com, it is likely fraudulent. A legitimate company will spend the time and effort to create their own brand and will not steal the work of other companies.
- Fraud sites often claim they are recommended by eBay, eBay Motors, or Yahoo! Auctions. You may see the list of sites eBay actually recommends by clicking here.
- You should call the customer support number (if any) on the site. If there is no phone number on the site, or if you can't reach the company, it could indicate the site is fraudulent. Consider whether you want to entrust your transaction to a company you can't reach on the phone.
- Do a search for the company name on Google (or similar search engine). Established companies will generally be listed. Fly-by-night companies will not generally be on the list.
- See if the web address of the escrow site is registered with the Better Business Bureau by entering it in their search form.
- Determining the date that a domain name was registered can often give clues that a site is fraudulent. Many fraudulent sites claim that they have been in operation for several years, but their domain names have only been registered for a few days or weeks. To determine the date a domain name was registered, you can use the WHOIS tool found at most domain name registrars.
- If a site uses person-to-person money transfers such as Western Union, it is probably fraudulent. See what Western Union says about fraudulent escrow services by clicking here.
- If the escrow site requests payment to an individual (or "agent") instead of a corporate entity, it is fraudulent.
- If a site only accepts wire transfers, e-currency, and other similar untraceable (or difficult to recover) payment mechanisms, it may be fraudulent. However, just because a site accepts credit cards does not mean it is legitimate, the site may be set up simply to steal credit card information. If you wire money to an escrow service, ask your bank to tell you where the wire transfer is being sent.
- If the site does not use SSL to protect user sign-in information, it is not a secure site and is most likely fraudulent. Most browsers display a padlock or similar symbol in their status bar to show you when your information is being protected by SSL. However, having a SSL certificate is no evidence that a site is legitimate.
- Be wary of sites that have escrow fees that are unreasonably low. It is unlikely that a site that charges as little as $2.00, for example, can legitimately perform these services and still stay in business.
- Being licensed as an independent escrow company is not a trivial procedure. Licensing is required by the laws of several US states in order to perform transactions in those states. One of the key states requiring licensing is California. If a site does not clearly state how it is licensed, it is probably not licensed. If a site lists licensing information, it should list the licensing authority. Contact the licensing authorities listed on the site and verify the site is actually licensed by those authorities. Be cautious on the validation. Several fraud sites have in the past given out the legitimate license number of Internet Escrow Services (the wholly owned subsidiary of Escrow.com).
- Spelling errors, grammar problems, broken links, and inconsistent information (such as the location of the escrow company) are usually additional indicators the site is fraudulent.