Online Escrow Services

Online escrow services can take the jitters out of paying for an expensive item bought online through one of the many Internet auction services. Falling in love with a piece of jewelry pictured on an auction site and realizing it is priced far below market value can be an exciting moment for a bargain shopper. But the seller is in Arizona and the buyer is in Maine. Neither party has met the other and now the idea of sending a check for one thousand dollars without some sort of security assurance can seem very risky. The payment could arrive from Maine, check cashed and the diamond ring never leave Arizona leaving the buyer quite ring less. On the other hand, the check could bounce or get thrown into the dead letter pool and if the ring has already been shipped, too bad, the seller is out of luck.

Enter the online escrow services plan that can now save the day with its middleman service between the two parties. The online escrow services have sprouted up by the thousands in response to the millions of transactions taking place on the many auction websites in America and around the world. Jittery buyers and sellers can rest easier, knowing that no one is going to get ripped off in an Internet buy or swap. And if a person believes that, he will probably buy the moon dirt offered for sale by the gas station down the road. The sad truth is that many of these services are actually just big scams and too many people have lost a lot of money trusting websites that didn't deserve the trust.

Take the story of the guy who sees a motorcycle on an online auction site for fifteen hundred dollars below what everyone else is asking. The seller agrees to the price when called and recommends an escrow service he has used "for years." The buyer looks up the online escrow services website and it looks good plus the seller has a good rating with the auction website and so the deal is struck. The story is always the same. No motorcycle and the website disappears over night. More than ever before, we live in a world where there seems to be few people a person can trust. But Solomon once wrote these astounding words:" Trust in the Lord with all thine heart and lean not unto thine own understanding; in all thy ways acknowledge him and he shall direct thy paths." (Proverbs 3:5-6)

The sad truth is that there aren't very many good online escrow services out there. In fact, out of the many hundreds that exist, only a handful are endorsed by the major online auction websites. Part of the problem is that victims of these crimes cannot get the recipient's name unless the police get involved. By the time that all happens, and since the crime is often taken place across the country between two distant parties, there is often little resolution to the matter. In many cases, these phony escrow sites originate overseas, many of them in former eastern bloc countries. The few legitimate Net escrow services do offer a genuine service to online auction sellers and buyers. The escrow service will never pay the seller until the buyer is completely happy but Internet payment services just pass the money along so unless the seller or buyer can afford to lose the money, don't expect an online pay service to be interested in anything other than being the money conduit.

The Federal Trade Commission does offer some very sound advice for those online auction participants looking for online escrow services to use. A site that claims to be affiliated with the government or follow government codes is bogus because these codes don't exist. Misspelled words in the website or awkwardly phrased words are another tip-off. Any service that doesn't have a customer service phone number and someone to answer it is bogus. If the service doesn't process its own transactions and requires an outside online payment service, stay away from it. Find out if the services are licensed and bonded and get a physical address for the business, then call the BBB is that city for verification of legitimacy. Finally, the FTC suggests reading the site's privacy policy and security information before beginning an exchange of information.

The major auction sites offer buyer protection programs for transactions up to one thousand dollars in value. For an extra fee, buyers and sellers can be protected from that amount of fraud. But for things such as car sales, expensive jewelry and other high ticket items, buyers on their own unless one of the very few licensed online escrow services. And buyers that use major wire transfer services are not covered in case of fraud, though the wire companies often get many complaints from customers about being scammed. The wire companies really are powerless and must follow privacy laws that often protect the criminal.

On the Internet, perhaps more than anywhere else, "buyers beware" is not only a mantra but a cardinal rule. With so few online escrow services being licensed, there is plenty of reason why consumers might be taken to the cleaners. If there is an impossible price, be aware. If the email address looks suspicious, be wary. If the seller wants to be contacted outside the auction site, be very leery. And if the seller says he is on vacation and cannot be contacted for a while, run Forrest, run!