Fake
Online Escrow Services Target
Big-Ticket Buyers
(for example -
Cycle Trader)
Last month,
Adrian Johnson, a Barbados
resident and Consumer Reports
WebWatch reader, was shopping for
a motorcycle on cycletrader.com or
cycle trader, a
popular online marketplace for the
two-wheeled set. Johnson had his
eye on one of the bikes, but when
he asked the seller how the
transaction would be handled, he
grew dubious.
The seller told Johnson he should
send his money – several
thousand dollars – to an escrow
service, which for a fee acts as
an intermediary between a buyer
and seller. (Typically, the
services hold onto the money until
the buyer confirms the merchandise
has arrived as advertised, thus
greatly reducing the buyer's
risk.) The escrow site in
question,
www.internationalbusinessbureauservice.com,
seemed like a real business, but
it claimed to be located in
England – too far for Johnson's
comfort.
The other recommendation was
www.traderonlineescrow.com, which
offered such evasive language
about its management and practices
that Johnson gave up. "I find
it hard to believe that these
people recommend these
places," says Johnson.
"You have to figure these
sites are scams."
Consumer Reports WebWatch found
that neither of these sites has
been around long enough to amass
much of a track record:
www.internationalbusinessbureauservice.com
didn't exist until November 27,
2003, and it doesn't exist now.
The Australians who registered the
site didn’t answer the phone or
e-mail addresses they provided.
Meanwhile,
www.traderonlineescrow.com,
created last November 16, is still
on the Web, claiming to be
"The Safest Way to Buy and
Sell Goods and Services
Online." However, the site
includes no information of any
kind to let users know who runs
the company. A Grantville, Penn.,
woman who is listed in public
records as the site’s creator
did not return several calls from
Consumer Reports WebWatch, and she
was not listed as a town resident.
Friend
or Fraudster?
The trouble with escrow sites,
which have sprung up by the
thousands to cater to nervous
online buyers of big-ticket items
such as automobiles, is that the
vast majority are fraudulent,
according to the U.S. Federal
Trade Commission (FTC). In early
2003, it says, about 10 fake
escrow sites surfaced each month,
while the rate climbed to 25 a
month by year’s end. One
legitimate service, Escrow.com,
says it gets reports of six times
that number, many of them with
graphics and logos stolen from its
own site.
Keith Lourdeau, deputy assistant
FBI director for cybercrime, told
Consumer Reports WebWatch some
suspected escrow fraud sites
appear to originate overseas in
countries, such as Romania, that
have also been sources of 419
fraud.
It's not hard to understand why
people fall for fake escrow
services. Johnson’s case is
typical: A would-be buyer gets
into an online conversation with a
would-be seller, who then
recommends an escrow service he or
she claims to use regularly. The
"seller," of course, is
actually a front for the fake
escrow service, and the car,
motorcycle or boat in the ad
doesn't exist.
The smoothest deceptions
frequently dupe users of major
online auction services like eBay
and Yahoo, where fraudsters have
learned to use the lingo or
advertising styles of habitual
sellers with high credibility
"ratings" to create an
atmosphere of trust. A common
variation of the scheme, known as
the "Western Union
scam," recently befell a man
who identified himself as RAM and
posted his experience to a Yahoo
scam support group.
In early January, RAM saw a
"gorgeous" motorcycle on
eBay, for sale at well under the
$5,000 that other eBay sellers
were asking for the model. The
seller said he was seeking
"only qualified
bidders," and RAM proudly
sent proof of his 100 percent
reliability rating as an eBay
buyer.
"I e-mailed the guy and he
said, 'You are my buyer and to
make this transaction safe for
you, we'll do it through an escrow
company, TradingNet,'" RAM
wrote. After RAM wired $3,500 to a
"TradingNet"
representative via Western Union,
“they took their Web site off
the Net. I got so mad when I knew
that I got scammed and they got
away with it. I had to borrow that
money with promises to pay it
back."
Though it does not keep statistics
on the problem, Western Union
estimates it has fielded hundreds
of complaints a year from escrow
scam victims, who were frustrated
at the company’s policy of not
releasing personal information
about recipients unless queried by
police. But last September, the
incidents prompted the company to
post warnings on its Web site (http://www.westernunion.com/info/faqSecurity.asp)
clarifying that “it is your
responsibility to verify the
reputation and legitimacy of the
seller."
Out
of Many, Only One?
The major online marketplaces,
such as eBay and Yahoo, offer
buyer protection programs that can
be safe alternatives to Western
Union – as long as purchases
don’t exceed $1,000.
But neither eBay nor Yahoo insures
larger purchases, leaving their
millions of buyers and sellers to
sort things out on their own. What
many don’t know is that both
companies recommend a single
service, Escrow.com, for U.S.
transactions over $500, and a
handful of other companies for
users who live abroad.
EBay strongly endorses Escrow.com
on its site (http://pages.ebay.com/help/community/escrow.html),
but the auction service has not
taken more substantive steps to
make sure that the average eBay
user knows of this option – for
example, providing direct links to
the endorsement on eBay pages
where big-ticket auctions actually
take place.
That may change: "We've heard
from our community, and we have
also witnessed some of the things
happening with online escrow
sites," eBay spokesman Hani
Durzy. "We are evaluating
exactly how we position Escrow.com
within the eBay experience."
Until
then, the FTC and the National
Consumers League recommend several
tips for distinguishing a
legitimate online escrow service:
- Be
suspicious of an escrow
service site that claims to be
affiliated with the government
or that follows "U.S.
Financial and Business
Code." No such code
exists.
- Look for
other troubling visual clues,
such as misspelled words or
awkwardly phrased sentences.
- Find the
customer service phone number
listed on the site and call
it. Don’t use that escrow
service if no one answers, or
if no phone number is
provided.
- Learn
whether the service processes
its own transactions. If it
doesn’t and instead requires
an outside online payment
service, avoid that escrow
company.
- Find out
if the service is licensed and
bonded. Get the business'
physical address from the Web
site and check its licensing
with state officials. If the
escrow service provides no
address, avoid it.
- Read the
escrow service's privacy
policy and security measures
before sharing any personal or
financial information.
If you believe you've been
defrauded by an online escrow
service, file a complaint with
your state attorney general’s
office (for a full contact list,
go to http://www.naag.org/ag/full_ag_table.php),
or the Better Business Bureau (http://www.bbbonline.org/consumer/complaint.asp).
Sidebar:
Legitimate Services Fight Fakes
Fraudulent escrow sites
also have created headaches for
legitimate escrow services, such
as market leader Escrow.com.
Criminals often duplicate graphics
and legal language from Escrow.com
to create an illusion of
credibility on their own sites,
says Alvin Black, Escrow.com's
general manager. Or some online
escrow services cite phony
relationships with Escrow.com’s
subsidiary, Internet Escrow
Services, which is a licensed
escrow company based in
California.
" The problem is huge right
now," Black says. "We're
aware of about 140 active
fraudulent sites, and we see about
150 new [complaints] a month. We
actively battle them and get them
closed down, but they pop up on a
regular basis."
According to eBay, which
recommends the service, Escrow.com
is the only Internet escrow
company to have pursued proper
licensing across the country,
allowing it to handle business in
every state accept Arizona, which
has restrictive laws.
Escrow.com is based in Irvine,
Calif., and is owned by Ilumin
Software Services of Reston, Va.
New
escrows and other fraud sites pop
up at a rate of about 10 per day.
Some may be shut down by time you
see them here. These are
suspicious sites we have found the
last 2 months, or have turned them
in to the web hosts/registrars for
deactivation. If you see a
site listed below, it is because
we have determined they are
probably fraudulent or received
complaints about them:
"Suspicious"
escrow sites that we are currently
watching or shutting down,
and you should avoid as
of May 4, 2005
ESCROW-INC.TK, banysolutions.com,
geocities.com/collinsmooore,
escrow-swissbank.com, globes-trader.com
(Big time scam in Germany),
carefultrade.net, express-business.net,
midlandescrows.com, ogstrader.com,
fapayment.net, escrowstd.com, e-safetrade.net,
online-deal-insurance.com, deals-safely.net,
wide-escrow.com,
tripledeal-escrow.com,
international-triple-deal.com,
square-solutions.com,
2-wheel-motors.com, best-tracking.com,
absolutetrader.com, vehicle-ship.org,
CarefulTrade.com,
absolutetrader.com, international-escrow.us,
prof-motors.com, insurance-limited.com,
absolutetrader.net,
onlinetranscomp.com, autohold.com,
afpayment.net, aon-online.com,
western-union.com,
uk-alliance-group.com, eunicom.com,
triple-business.com,
sicher-behandelt.com,
allimproved.com,
uktradingservices.com,
majesticdelivers.com,
mer-solutions.com, secure-vehicle.com,
Hugedebut.net,
gfexservice.com,
squaretrade-vehicles.com, consign-manager.net,
grand-e-solution.com, escrowsc.com,
safeauctiondeals.com,
cdd-solutions.com, fastaq.com,
corescrow.com, burns-trading.com,
uniontraders.net, premium-deals.com,
aescrows.org, paycheckbuy.com,
escrow-sc.com, etripledeals.com,
ecrowies.com, simple5steps.com,
synctrader.com, auto1imports.com,
centralexpertsgroup.com,
i-guardian.com, corescrow.com,
check-products.com,
bestmotorbuy.com,
uk-netsolutions.com,
synctrader.com, tck-solutions.com,
perfectalliance.com,
international-shipping-agency.com,
ing-exchange.com, ot-company.com,
trade-guard.com, escrountd.com,
ingtradesquare.com (attacking
sellers on alibaba.com),
1to1deals.com, dealmanage.com, re-escrow.net,
idealtradeonline.net,
ILLOXXONLINE.COM, ing-exchange.com,
official-trades.com, safe-vehicle.com,
squaretradesecure.net, 3-web.com,
gpstransp.com, comm-trust.com,
elite-trade.com, 1to1deals.com,
1to1deals.net, official-trades.com,
motorradeurodeals.com,
sichern-sie-ihr-geschaft.com,
italpostservice.com,
englishpayments.com, gpstransp.com,
squaretradesecure.com,
ssl-deal.com, 3-guardian.com,
squareguardian.com,
esalessecure.com, deal-online.org,
italian-traders.com, GITRADE.COM,
express-europe.com, escrowd.com,
safealliances.com, elite-trade.com,
finanziellies.com, traders-square.com,
escrowbbt.com,
sichernsieihrgeschaft.com,
on24trading.com, citizens-escrow.com,
securetradesonline.com,
europesecure.com,
sichernsieihrgeschaft.com,
motorradereurodeal.com,
royalcompanyshipping.com, new-london-motorcycles.biz,
5easy-steps.com, nextradeu.com,
europessecure.com,
atvworldwide.com, escrow-securepays.com,
official-deal.com,
auto1imports.com, 3rd-trades.com,
doddko.com, which links to
vehicle-deal.com,
triple-deal-str.i8.com,
cargospedition.com, secured-ltd.co.uk,
simpleconsign.com,
aplus-escrow.com, square-trade-safeharbor.com,
wwshippers.com, eauto2000.com,
tt-transports.com, secure-dealing.com,
escrowamerica.net,
tarragona-trading.com,
cargospeditions.uk.com,
eauto2000.com, escrow-autos-transactions.com,
autoscout24-safeexchange.com,
expresssped.com, energy-webdesign.com
(possible phony "job
offers", spamming people with
resumes on CareerBuilder.com,
possibly with Western Union
scams?), expresssped.com, Secure-Dealing.com,
SafeTrading.net, widesafeway.com,
eauto2000.com, express-transports.com,
e-safebuying.com,
electronicstotrade.com, trade-guard.com,
vehicle-dealer.com, exchange-deals.com,
coustodytransanctiononline.com,
insideescrow.net,
tt-transports.com,
prodockshipping.com,
royaldelivers.com, sigma-transactions.com,
tt-transports.com,
tt-transport.com,
otp-transactions.com, sealbuys.com,
Internationalatvs.com,
widesafeways.com,
worldsystemdelivery.com,
terranovaunited.com,
q2a-delivery.com,
onlinebetterbusinessbureau.com
(phony fraud site tricking you
with Better Business Bureau name),
world-transport-safe.com,
safeandfast.tripod.com,
trustmark-e.org
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