Other Scams

Other Scams

09 December 2011
<< Go Back


Escrow is a term applied to any 'honest broker' service that offers to hold money or goods until all parties in a transaction are satisfied that the terms and conditions have been met, whereupon the goods/services/monies are released.

Escrow services have existed for many years but have recently come to more importance in the online arena because of buyers and sellers being both worried about getting scammed in an Internet auction or a sale. A seller does not want the goods to vanish with no payment. A buyer does not want to send money with no goods (or faulty goods) in return. 

A genuine Escrow Service allows sellers to send goods safe in the knowledge that funds exist and are being held safely until the goods have been delivered. In turn, the buyer can feel safe in the fact that the goods will be received, checked for suitability/condition and the money will only be paid over when this is confirmed to the Escrow Service. 

To initiate the scam, the criminals firstly build an elaborate fake escrow web site. The web sites are often set up to imitate legitimate escrow services. To an untrained eye or on casual inspection it can be very difficult or nearly impossible to tell the difference. 

The criminals then set up a trap auction (or auctions) on a popular auction site. The price quoted is 'profoundly' cheap. Not unnaturally the item is quickly snapped up. When a winner asks how to make payment, the 'seller' suggests the use of an escrow service because of the 'value' of the item. It is also suggested that this is safer for the buyer as well because they will be able to inspect the goods before the money is released.

The winner of the auction is then requested to use one particular (fake) service. Sometimes there is a choice of two equally false sites. Once the money is transferred to the fake escrow site, it is immediately transferred out of the site and on to another location and 'vanishes'. 

The fraudsters will wish to make as much money as possible from the site so there is often a period when the 'seller' and the 'escrow site' stay in contact trying to explain the delays in delivery. This is so that they can complete any further scams they may be running using this fake site. When they have done as much as they can or have completed collecting money from their ongoing scams, all accounts will be closed and the website will no longer respond. 

The fraud can work both ways. A fraudulent seller can suggest that a buyer use an escrow site he or she controls, then simply grab the buyer's cash without ever sending the merchandise (which never exists.) Alternatively the dishonest buyer can trick a seller into shipping items that haven't been paid for by simply sending an official-looking e-mail from a fake escrow service stating that monies have been received and to go ahead and proceed with shipment of the items. 

This type of scam has become quite sophisticated, and the con artists are getting better at it. They tend to even mix legitimate information with fake so watch out!

Voice Phishing Phone Scams

Voice phishing, scams work by using voice response telephone systems to fool you into handing over personal information; such as your bank account or credit card details.

Usually, you will receive a recorded message asking you to call your bank or credit card company regarding a concern with your account. Your the instructed to call a number, which will be a recorded message imitated from the proper institution, making it virtually impossible to tell if it is an imitation number. You will be given instructions to provide a credit card number, possibly a PIN number and other information in order to verify or revise your account.

What should I do if I receive a voice phishing call?

Be wary of any phone call from an institution which asks you to reveal personal information IE a credit card number, pin, or security password. A legitimate organisation would never ask for this type of detail with an unsolicited call. If in doubt, call the organisation direct using the contact number from your account statement.

If you suspect you have been a victim of phone fraud, immediately contact the organisation that has been impersonated and give an account of what’s happened; they should then cancel any exposed accounts. Don’t forget the information you provided could also be used to access other accounts from other organizations, so contact those as well.