Scam Watch

Phony escrow services cheat online car shoppers

June 29, 2008|By Dan Thanh Dang

Scammers posing as phony escrow services are targeting online car shoppers to defraud consumers out of thousands of dollars, the Better Business Bureau warned.

Both eBay and Craigslist have posted warnings to consumers about escrow fraud on their Web sites, but the BBB says that shoppers continue to fall for them as the scams become more sophisticated.

The BBB says most victims are shopping online for big-ticket items such as a used car when they come across a deal that is often too good to be true. When the buyer and seller make contact, the seller recommends using a specific third-party escrow company in order to protect both their interests. The escrow company then contacts the consumer and requires payment for the item through Western Union or MoneyGram before the car is delivered. After wiring the money, buyers don't receive the car and usually never hear from the seller or phony escrow service again, the BBB says.

Perpetrators of escrow fraud are resorting to stealing the identities of legitimate companies, according to the BBB. Global Payments Inc., an Atlanta-based electronic transactions processing company, recently found that its identity and logo were being used on Craigslist to defraud consumers who thought they were sending the money to Global to pay for a car.

To avoid being victimized, the BBB suggests that buyers should be leery if a seller pressures them into using a particular escrow service; check out the escrow company by calling it directly and researching the company online; confirm that an escrow service is licensed and bonded with the appropriate state agency; avoid using offshore escrow companies; and avoid sending person-to-person money transfers.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.