How To Identify and Prevent Escrow Scams?
Escrow scams are becoming quite popular these days as online escrow services are becoming the chosen payment method in the various fields of businesses, including the dark web marketplace transactions. This is because of the escrow mode of payment offering various advantages of which one is reducing the scams that either party in the process of an escrow payment might intend to. But, there are even instances where it has been experienced that the escrow service platforms itself carried out scams on either party.
What is Escrow? How Does It Work?
Escrow is a secure financial agreement of cryptocurrencies between two parties (buyers and sellers in the dark web marketplaces). Escrow works as a third party platform with its wallet. When a buyer purchases a product, the seller requests the buyer to pay his amount. The buyer then sends the amount to the escrow wallet, but the escrow moderator (guarantor) temporarily freezes or holds the fund until the buyer gives permission. Once the buyer receives his product and informs the guarantor that the product was up to the mark and that there is no issue with anything and the guarantor can release the payment, the guarantor does as the buyer says. He releases the payment to the seller’s wallet immediately, which takes seconds to reflect in the seller wallet.
What Is A Fake Escrow? How Do The Fake Escrow Companies victimize the Consumers?
A Fake escrow is a phenomenon where a fraudulent company sets up its fake company existence and pretend to be a legit company in the bid to defraud the users. A usual escrow fraud might involve a potential seller who is recommending the usage of an anonymous escrow company assuming to be a legitimate escrow company.
The most common ways in which the buyers are put through online escrow frauds by a fraudulent escrow service are described below. Also, note that numerous variations of the basic escrow services scam patterns are available. You need to be prepared and stay alert when a person recommends you such fake escrow site as the same person is a participant of the scam.
The scammers usually follow the below-mentioned steps to scam a victim:
- A seller (potential scammer or fraudster) recommends a fraudulent escrow service platform to the buyer, often stating that the website is to protect the buyer. The thought process of the buyer behind this is that a seller is more concerned with the safety of the buyer which would make them feel more confident about the seller and that is when the seller gains the buyer’s trust.
- Next, the buyer would fall for the escrow scams and would send money to the scam escrow website after the seller instructs them through the fraud site.
- The seller takes the funds, and the buyer never sees the merchandise arrive at his doorstep.
A fact in this regard is that the fake escrow scamming sellers often takes help from multiple scam escrow websites. If a buyer gets suspicious of the scam and refuses to use the particular website, the seller would suggest a different website offering fake escrow (obviously, the buyer would not be informed of the fraud by the wary buyers would definitely spot it).
How Are The Fraudulent Online Escrow Websites Set Up?
The fraudsters open a Web Hosting account utilizing the stolen credit card numbers and identities. Then they upload the content files to the acquired web hosting server for creating a fraudulent escrow service website or platform. In some of the cases, a fake website can be spotted through its sloppy content bearing numerous grammatical and spelling errors along with conflicting information. In some of the other cases, the phoney site’s data is one copied from a legitimate source. The licensing and the address used by these fake sites are also unnatural in nature.
The logos and designs put in the websites aiming for escrow payment scams are taken from the other legitimate and high ranking platforms and even the Internet Fraud Complaint Center.
When the escrow scams conducting websites are spotted and shut down, the scammers go ahead and copy the defunct website’s files creating an absolutely new site, changing a little bit in the domain name and gets into the business once again.
How Do I Spot a Fake Escrow Company?
A fake escrow company or a fraudulent escrow service provider can be detected in a number of ways. Here are the fraud protection guidelines.
- Never Rush or Be Pressurized Into Using A Specific Escrow Service or Website
You should always be wary when the seller asks or forces you to transact through a particular escrow website. Before you actually hop in the website and start a transaction, make sure to scrutinize it thoroughly. You must never assume any website to be legitimate on the first go.
- Contact Customer Service and Confirm The Website’s Legitimacy
As the fraudulent online escrow service platforms are designed in a rush and a shabby way, there are heavy chances that they miss out on some vital information and contain false information. Thus, to be sure if the website is accurate, you must try to reach their customer service number. In case there is no one to attend you. Then you can consider it to be a huge red flag. If you receive an automated and/or generic message, it would also indicate a scam. If you do not find any customer service number in the first place, do not proceed to transact.
- You Must Undergo A Strong Verification of the Endorsements Listed in the Website
Most of the times, fraudulent websites bear embedded copied images of the endorsements. It thus becomes essential to verify all the endorsements and the credentials that are listed on an online escrow site before you build trust. Go ahead and check the seals and logos and verify their authenticity. You can also contact the listed licensing authority and confirm if the escrow service provider is registered with them. Furthermore, check the domain authenticity. In order to gain trust, some of the websites would let the customers know that they are pretty old in their field. But on actual scrutiny, you may find that the website is as old as a couple of days. The Whois tool is specifically beneficial to understand the age of the website.
- Carefully Follow The Payment System
A real website will always ask you to go for wire transfers that go through your bank account to theirs and would also furnish you with a routing number and an account number. To check the genuineness of the website, ask your bank to let you know where the transacted amount is heading. You can consider it to be an utter fraud if you are asked to pay through a person-to-person money transfer or to an individual without the involvement of any corporate identity.
- Check the URL
To cause a fake escrow site scam, the scam websites would often utilize a domain name that is much more closer to the real ones. Make sure that you have entered the correct address and you are on the right website. Beware of using the companies that claim to be affiliated with the other companies and always insist on using the original company.
- Step Back When You See Overemphasized Usage of Words Like “Safe” And “Secure”
To make the customers believe in the website, the scammers often overemphasize words such as “secure” and “safe”. Some of them add these words to their domain name. If you spot the usage of a dash in the domain name of any escrow company, it is a red flag. You must also avoid the escrow companies that end in the extensions like .org, .biz, .cc, .info, .US and .bz.
- Check The Sender’s Email and The Links In It
It is easier for the scam artist to create a logo that looks legitimate but is actually not. If you think the email is possibly a phishing email, check it with the company. If proved to be a phishing email, block the sender from contacting you and delete the email. Also, do not click on any link that might seem suspicious. Otherwise, you might fall victim to a ransomware attack or a malware attack. Again, you must not trust all the information in an email and reply. Be safe than be sorry.
These are all the proven ways to identify and prevent escrow scams. You could be protected if you follow all the guidelines mentioned above and not be victimized. It is advised to use popular escrow payment services while transacting.
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