Bogus escrow services defraud online used car buyers

Thursday, September 04, 2008

For 2007, the Internet Crime Complaint Center processed 219,553 complaints and the Federal Trade Commission (FTC) reported that nearly $526 million was lost via Internet fraud. FTC also reports that 28 percent of online fraud victims sent funds to scammers via hard to track wire transfer services – a favorite tactic of a new online scam in which consumers' money is diverted into fake escrow services.

Better Business Bureau (BBB) recently issued an alert to warn online car shoppers that scammers are posing as phony escrow services in order to defraud consumers out of thousands of dollars. Internet thieves are now using escrow service fronts with some new twists to steal money and personal identities.

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, such as a car priced 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.

Go to the BBB site to read more ...