I am not sure if this forum is the right one but I want to share this article with the greatest most helpful
group of people I know on the web.
I ALMOST got caught in this one myself.
Online Escrow Fraud Hits eBay Members
By Ina & David Steiner
AuctionBytes.com
October 25, 2002
In August, Frank Rafter came across a 2001 Mercedes
CLK 340 on eBay Motors that seemed like the perfect
vehicle for him. Now, he wishes he had never seen the
car.
After the auction ended without meeting its reserve,
Rafter (not his real name) contacted the seller to see
if he would be willing to sell it to him. They quickly
agreed on a price of $36,000 for the car, and the
seller asked to have the money wired to his bank
account. Following advice on eBay's site, Rafter asked
to use an escrow service. He wired money to
Escrowoncall.net, a site suggested by the seller. He
believed the escrow service would tell the seller to
ship the car to him once it had received his money.
According to Rafter, the car never came, and emails to
the escrow service went unanswered.
In a sophisticated con, fraudsters are copying
information about real cars for sale on sites such as
AutoTrader.com and CACars.com and are listing them for
sale on eBay Motors. Buyers purchase the cars from
these con men, wire-transfer money to a seemingly
legitimate escrow service, and await delivery of their
car. When the car never arrives, they contact the real
owner of the car, and discover the legitimate seller
knows nothing about the transaction. Then the buyers
realize their mistake: the escrow service they?ve sent
the money to is a scam, and the "seller" they dealt
with never had possession of the vehicle.
Welcome to online escrow fraud. The problem appears to
be growing, and it is not just affecting buyers.
Adam Owen is a graduate student who sold his laptop
computer on eBay to get money for a new computer for
school. After Escrowsol.com notified Adam it had
received the buyer's money, he packaged up the
computer and sent it off to an address in London. Like
Rafter?s story, this one had an unhappy ending. Owen
said the escrow site was not legitimate, and he was
out his money and his laptop.
Online escrow fraud is escalating, brought about by
various factors including:
online credit-card theft
the anonymity the Internet affords users
a lack of awareness about fraudulent escrow sites
Web hosting companies that allow fraudulent escrow
sites to be created with stolen credit cards, and to
remain on their service even after they have been
reported.
Fenton Smith (also an alias) started
http://www.sos4auctions.com in September after
monitoring the Trust & Safety board on eBay. He said
he got tired of having his posts about scam escrow
sites pulled by eBay moderators. Fenton created
SOS4Auctions.com to warn people about the problems of
escrow fraud, and, he said, it has become a full-time
job. Smith has listed over 100 sites that he labels
scam escrow services - 47 of them still active. Smith
believes many of the fraudulent sites are
interrelated, based on the hundreds of emails he has
received from victims and near-victims.
Some victims we spoke to are convinced there is an
international twist to all the cases, blaming Romanian
programmers and Russian Mafia. While not proven, the
scam does have international overtones. Two seemingly
legitimate sellers said they had sent laptops to an
address at Wood Street in London in the UK, and never
received payment from the escrow service they used.
AuctionBytes contacted a business at 179 Wood Street
in London, next door to the suspect address. The
employee who answered the phone told us that the
address in question was a residential flat, occupied
by what she described as a ?very large group of people
from Kosovo.? A call to Scotland Yard netted us the
same answer that victims commonly get from law
enforcement officials: victims should report the crime
to their local law enforcement agencies.
How do people fall for escrow fraud? Here's a
real-life example.
A con man used a stolen credit card to register a Web
site, using a domain with the word "escrow" in it. He
copied the look of a legitimate escrow site to make
the site appear authentic.
The fraudster contacted a doctor in Florida who was
selling his Porsche on a fixed-price site called
AutoTrader.com. Posing as an interested buyer, the
fraudster asked the doctor to send additional photos
of the car via FedEx to an address in San Francisco.
He then used those photos and specific information
about the doctor's car to post an auction on eBay
Motors.
An eBay Motors user named Steve bid $43,000 for the
Porsche after checking the VIN number, a number unique
to every car. Everything checked out ? the VIN number
belonged to a doctor in Florida.
The auction ended without a sale, because the reserve
price was not met. The fraudulent seller, posing as
the Florida doctor, contacted Steve, telling him he
was the next highest bidder. Steve agreed to purchase
the Porsche for $44,000, believing he was going
through eBay using their "Second Chance Offer"
feature, which allows sellers to sell an item to the
next highest bidder.
Steve communicated with the fraudulent seller via
email, who told Steve to wire the money into an escrow
account, and Steve made arrangements to pick up the
car in Las Vegas. After many delays on the part of the
seller, Steve called the doctor in Florida, and was
shocked to learn the doctor did not post the car on
eBay Motors. The doctor, an unwilling and unknowing
participant in the scam, had already traded in his
Porsche for a Lexus. The con man had Steve's $44,000,
and Steve was left without a car and $44,000 poorer.
The pattern on the cases that AuctionBytes.com
examined is the same. We decided to ask one Internet
Service Provider why they hadn't shut down a Web site
set up with stolen credit cards and posing as an
escrow service. In a written statement, Dreamhost, the
hosting service where the Escrowoncall.net domain
resides, told AuctionBytes that they provide ?hosting
for more than 40,000 domains, making it impossible to
constantly monitor customers? web sites or
activities.?
And what does eBay have to say?
eBay spokesperson Kevin Pursglove said eBay is aware
of fraudulent escrow sites, but said there have been
"virtually no fraud cases reported" by eBay members
about such escrow sites. Because eBay does not
consider it a significant problem, there are no
warnings on the site, he said.
Information posted on eBay's site recommends members
use escrow for transactions over $500
(http://pages.ebay.com/help/community/escrow.html) and
promotes a site called Escrow.com. On eBay Motors, we
found a link to a page called "Safe Buying Guide"
(http://pages.ebay.com/help/buyerguide/bidding-tips.html),
where it also advises buyers to consider using an
escrow service.
A visit to Escrow.com's home page has a large warning,
"Fraud Watch, Please Read." Clicking on the warning
brings up a box warning people, in part, "If you are
not using escrow services at this URL, please be
careful. We are not affiliated with ANY other escrow
sites no matter what they may tell you.?
Pursglove suggested that eBay members selling
high-priced items consider using a service like
Transrow. The service helps sellers set up a bid
verification process, in which auction bidders are
required to submit a drivers license and credit
references in order to bid on an auction.
Fenton Smith, who does consider escrow fraud a
significant problem, offers the following advice:
Check for poor grammar on the escrow sites
Although the site may look like authentic, it?s
usually copied. The most frequently copied sites are
Escrow.com and Escrow.ca, both legitimate sites
There are usually giveaways in the ?Terms? page, which
is generally stolen from another site.
Very often a site will leave hints of what its
previous incarnation was - especially if they've just
changed domain names recently.
Be wary if the seller insists on using a specific
escrow site. Sellers don?t usually press for escrow,
buyers do
Because escrow is usually used on higher ticker items,
escrow fraud can result in a significant financial
loss. Most auction transactions go through without a
hitch, but it pays to know as much as possible about
the risks or you could end up losing a bundle.
Go Fast, Turn Left
-- No virus found in this incoming message. Checked by AVG Anti-Virus. Version: 7.0.344 / Virus Database: 267.12.4/142 - Release Date: 10/18/2005
