A local consumer contacted the BBB about a company named, Net Spend Escrow. He spotted an out-of-state, online listing for a truck and was considering purchasing the vehicle. The seller of the car suggested he use Net Spend Escrow to make the payment. He was concerned about turning his money over to this company to complete the transaction for the car and contacted the BBB for more is information on this company.
After further investigation, the BBB found the following details about this company:
All evidence points to a classic scam set up that tricks many who make high value online purchases. While escrow services are not illegal, there are a growing number of fake companies established to lure consumers to send payment to the company for an item that does not exist. The purpose of an escrow service is to create a safe environment where both the buyer and seller feel comfortable exchanging money and goods knowing that the transaction is secure. Unfortunately, scammers have realized they can cash in on this type of transaction by creating a facade of trustworthiness as an escrow company.
Escrow fraud is typically perpetrated through online auctions or classified Web sites. Both eBay and Craigslist have posted warnings to consumers about escrow fraud on their Web sites, but BBB notes, shoppers continue to fall for the scam as the cons become more sophisticated.
Victims of escrow fraud are often 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 – perhaps several thousand dollars below the Blue Book cost. When the buyer and seller make contact, the seller recommends using a specific third-party escrow company in order to protect both of their interests. The escrow company contacts the consumers and requires that they wire the payment for the item through Western Union or MoneyGram and then the car will be delivered. After wiring the money, buyers don’t receive the car and usually never hear from the seller or the phony escrow service again.
How Do You Avoid Escrow Fraud?
Source: BBB North Alabama