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Bogus Escrow

The Bogus Escrow scam is a straightforward confidence trick in which a scammer operates a bogus escrow service.

Escrow services are intended to ensure security by acting as a middle-man in transactions where the two parties do not trust each other. Rather than sending money or goods directly to the other party (which is insecure, as one or other party must send their item first, at the risk that the other party may not then send theirs), both parties send their items to the escrow service, which holds them until both items are received, then sends both items on to the recipient party. If either party fails to deliver their part of the deal, the other party's item will be held at the escrow service and eventually returned to them.

In the bogus escrow scam, a scammer sets themselves up as the recipent of money or goods and then requests the use of an escrow service which is, in fact, operated by themselves. This bogus escrow service can then reassure the victim that the scammer has sent his/her item and that they should send theirs to the escrow service. In fact, this is identical to sending the item to the scammer, who them immediately closes down the escrow service and does not send their item to the victim. The scammer can then pass blame to the escrow service, claiming that his/her item was with them at the time they closed down and he/she has also lost it; if the victim did not investigate the escrow service before using it, they may well believe this.

The bogus escrow scam is popular on eBay, where escrow services are often used for high value transactions. A famous instance of the escrow scam is referred to as P-P-P-Powerbook, in which the USA-based seller of an Apple Powerbook determined that a UK buyer was attempting a bogus escrow scam and took revenge by sending them a cardboard box, the same shape and size as a Powerbook, and overdeclaring its customs value so that the scammer was charged a large amount of duty.

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This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.