Name
Bogus Escrow

Aka
Bad Middle Man

Crew
Two or more

Victims
Buyers and sellers - particularly online

The Scam
An escrow service exists to protect two parties in a transaction. The buyer gives his money to the escrow service. The escrow service confirms to the seller that the money has been paid. The seller then gives or signs over the goods to the buyer. After the goods have been received, the escrow service gives the money to the seller. The buyer or seller pays the escrow service a fee.

If the buyer fails to pay for the goods, the seller does not deliver them.
If the seller does not deliver the goods, the escrow service returns the money to the buyer.

However, a con artist may act as the buyer and have a shill to act as the escrow service. The seller delivers the goods after being told by the bogus escrow service that the payment has been sent. After the goods have been received, the escrow and the buyer vanish. The seller is never paid.

Alternatively, the con artist may acts as the seller and the escrow service. The buyer pays money in advance to a 'third party' who is actually in cahoots with the seller. The con artists get the money and fail to deliver the goods.

Variations
This scam has been found in the follow places.
  • Real Estate:- Buyers put deposits on houses that are not signed over.
  • Ebay: - Expensive items are usually handled through escrow.
  • Bike Seller: - A con artist set up dozens of fake escrow companies to sell bikes. (e.g.support-escrow.com, eurobetterbusinessbureaus.com and international-cargo-express.com)
  • Powerbook: A UK buyer attempted this scam. The US victim got revenge by sending an empty box with an inflated customs value. The con artist had to pay large amounts of duty on the the empty box!

Take
To set up a fake escrow company takes time, so only large ticket items ($500+) are scammed through this system.

Keywords
Short con, internet.

Created by Nicholas J. Johnson
Australia's Honest Con Man
www.conman.com.au