Escrow services are the preferred transaction method when big-ticket items are being bought and sold on Craigslist, but many consumers are being ripped off in phony escrow service schemes
Purchasing something expensive over the internet presents a problem. How do you pay for it when you know nothing about the seller and vice versa when you’re the one selling something? The solution for many is to use a third party escrow service. Escrow services are preferred because they protect buyers and sellers making transactions.
The role of escrow services in online transactions involving big-ticket items is well-established. Over time, some of the businesses offering escrow services have become trusted by the public. Escrow.com, for example, has been around a long time and I wouldn’t hesitate to use them. Unfortunately, scammers have devised a way to take advantage of the trust people place in escrow services and rob them blind.
How Craigslist Escrow Scams Work
These scams involve two important steps. First, a scammer creates a listing on Craigslist for something valuable, often at a bargain price. Potential buyers responding to the posting eventually want to know how the transaction will be handled. Responders are told that the transaction will be handled by an escrow service. This means there’s nothing to worry about right? Wrong!
This is when the trap is sprung. Many people like to use escrow services which are trustworthy third parties who pay the seller once an item has been received and accepted by the buyer. This is a perfectly normal method of doing business on the web or elsewhere as long as the escrow service is legitimate. Unfortunately, in the case of an escrow scam, the seller recommends an escrow service of their choice to handle the transaction. The escrow service will have an official-sounding name like MyEscrow.net and a professional-looking website for you to visit. However, if you don’t do your homework first and send them your money you may wind up losing everything. This is exactly what’s happened to many people purchasing expensive jewelry, cars, and boats on Craigslist. Once the money is sent, the seller is never heard from again.
That’s why it’s important to do your due diligence before using an escrow service for a Craigslist transaction. Watch out for sellers insisting you use an escrow company you’ve never heard of, especially if it’s abroad. Don’t get tricked into using Western Union thinking that it’s perfectly safe because it’s a name you know and trust. Savvy online shoppers know to steer clear of buyers wanting you to transfer money to them via Western Union or engage in currency transfers. They know better than allowing another party to draw money directly from their bank accounts. Never hand “phishy” sounding escrow sites the keys to your account or you could end up paying a lot more than you expected.
Escrow scam tips
We found the following useful tips on avoiding escrow scams in an article titled “Escrow fraud ruining Craigslist?“.
- If they contact you be suspect. Ask why me? Am I just lucky?
- If they cannot talk on the phone be suspect. Are they afraid you won’t deal with a Nigerian or Russian accent?
- Don’t send money.
- Don’t send money.
- Research it online. If anyone else saw the same scam you may be able to save yourself a lot of time.
If you decide to use an escrow service and want to know how to detect and avoid crooked operations, we offer these phony escrow site identification tips:
How to spot phony escrow websites:
- Check their privacy policies for errors or indications the content was lifted from another site
- Check out their contact information. Do they have actual offices somewhere or is the only way to contact them via email?
- Check for grammatical errors
- Investigate the escrow service by searching for both the domain and business name with your favorite search engine to see what you find
- Check with the Better Business Bureau to see if they have information
The above are dead giveaways, but failing to find such an error on an escrow site is no guarantee of an escrow services authenticity.