The Better Business Bureau of Eastern North Carolina released a warning today for all online consumers to be mindful of escrow service fraud, especially regarding vehicle purchases.
Now more than ever, shoppers are looking for great deals on used, fuel-efficient cars in order to pay less at the pump. Internet scammers, who have entered the arena by posing as safe escrow services, are defrauding car buyers. Many times, extremely low prices on used cars are too-good-to-be-true, and purchasing them may cost a non-suspecting consumer thousands.
Escrow service scammers know that consumers are more likely to trust their claims if they present a trustworthy identity through sophisticated Web sites and thought-out stories. These criminals will not stop short of tugging on emotional strings, either.
Both the Chicago and Louisville BBBs were contacted by consumers after seeing odd listings on Craigslist. For example, a 2007 Audi was listed for between $2,900 and $3,500. The seller rationalized the low price by claiming the car was his son’s, who was recently killed in Iraq. To supposedly cover shipping costs, fraud victims were told to use an escrow service for transferring money to USA-Transports, the phony company. Despite the fact that USA-Transports sent a tracking number and called to confirm a delivery schedule, the car never arrived.
"The benefit to using an escrow service is the safe environment for parties to complete a fair transaction," said Beverly Baskin, president and CEO of the BBB of Eastern North Carolina. "Unfortunately, these Internet scammers develop believable stories about their cheap prices or previous track record so you will comply with their services."
Online consumers who sent money through wire transfer services account for more than 25 percent of all Internet fraud victims. Requesting payment via wire transfer services is common strategy among scammers, and these wire transfers can be difficult to track. While eBay and Craigslist post warnings on their Web sites about scammers, consumers still fall victim to Internet fraud. The Federal Trade Commission (FTC) reported in 2007 that almost $526 million was lost due to Internet Fraud; the Internet Crime Complaint Center handled 219,553 complaints during the same year.
BBB Advice on Avoiding Escrow Fraud
Take caution when sellers pressure the use of a specific escrow service and check for legitimacy at bbb.org.
Many times escrow scammers will steal the identities of valid companies when setting up their own Web site. After checking with the BBB, contact the company to ensure validity.
A legitimate escrow service will never require buyers to transfer money through Western Union. Trustworthy companies will provide both routing and account numbers for their bank and will instruct buyers to wire money from their bank accounts directly to the company’s financial institution.
Be sure to confirm that the service is licensed and bonded with the appropriate state agency and avoid overseas escrow companies.