On our site CarBuyingTips.com, we have created a world class article about cahsier's check fraud showing photos of actual fake checks, along with photos of fake escrow sites and how to determine if they are fake, along with tons of tips. The article can be read at:
Here are some of our tips for avoiding fraudulent esrow scams
Always consider every escrow company to be fraudulent until you have checked them out and proven them to be real.
Always trust your gut feeling. If you get a bad feeling about something, trust you instincts, don't do the deal. Others will come along later.
If a seller ever tells you to use a particular escrow service, be afraid. Be very afraid! All sorts of red flags should go up in your brain.
Be extremely suspicious about any car that is priced well below similar models for sale. If that Porsche Boxster is $15,000 cheaper than all the others, it's could be a phony scam sale. They use these lower prices to reel you in.
The person you are dealing with offers to pay the shipping and insurance. Come on, use your head! When was the last time anyone on eBay offered to pay shipping for you? Give me a break.
Look for the eBay "Changed ID" icon next to the seller's ID name. If they changed ID in the last 30 days, don't deal with them. Who the hell changes their ID on eBay?
Anytime someone emails you to say "I used this escrow service many times!" You should be skeptical. How often does someone really need the services of an escrow company? Give me a break...
A Real escrow company would never tell you to wire them money via Western Union. Western Union transfers CASH from one WU location to another, not to a real and traceable bank account! DUH! The only time you should be using Western Union is to bail your drunk loser of a brother out of jail. A real escrow company would tell you to use YOUR bank to wire money to THEIR bank, with their routing number and account number. There is a form you fill out and it must show who their beneficial bank is. You must still verify with your bank where the receiving bank account is REALLY located for their bank account before you wire, it could be a bogus account in Nigeria.
Remember that the odds are 9 to 1 against you finding a legitimate online escrow service.
Try to close your deal in person if possible. For example, if you just saved $5,000 on the car, spend $300 on a plane ticket to go see it.
Don't buy a car from a foreign "seller" online. Go get the car yourself, or don't close the deal. The heck with escrow. Foreign purchase transactions are for seasoned veterans, not you. There are too many complicated import laws and DOT safety and emissions hurdles for you to deal with.
Avoid dealing with any escrow company that has a dash in the name, like secure-escrow.com. We saw maybe 2 out of 300 sites that were legit.
Avoid escrow companies that claim to be licensed in all 50 states, it's probably a lie. Even some top escrow services refuse to license themselves in Arizona which has licensing requirements that dictate the deposit of an unreasonably large amount of money as a condition for a license. California has tough licensing requirements too, so if you don't see them licensed there, you know they are lying.
Some phony escrow sites list a license # of: 963-1867. Be suspicious if you see this, it was cut and pasted from the legitimate Escrow.com.
Go to Register.com and do a "whois" lookup of the escrow company domain name. If the domain name was registered only weeks before, consider them to be fraudulent. The scammers usually reserve several names, rip off a few people, then dump the site.
Avoid any escrow company with eBay's name embedded in it, like Ebay-Escrow.com. They are all frauds. eBay uses the legitimate Escrow.com.
Don't foolishly think that you're safe just because your sale or purchase of a car took place through Autotrader.com or eBay.com. Those sites are highly targeted by scammers.
Don't get suckered in by the professional look of an escrow company website. I can do that with Microsoft Front Page in 2 hours.
If the escrow company is located outside the U.S., don't use them. Are you nuts? There is no reason to use an offshore escrow company. They are not governed by any U.S. Laws.
If the escrow site has a "Verisign Secure Site, Click To Verify" logo on their web site, it is most likely fraudulent. Click on the logo and if all it does is send you to Verisign's home page, they are fraudulent. Same with Internet Security Alliance, and TRUSTe logos. Always verify if they are licensees of these organizations. Fraudulent websites like to paste them on their homepage, even though they are not licensees.
Avoid escrow companies that appear to be a well known company, but are not, i.e., WellsFargoEscrow.com, WesternUnion-Escrow.com.
Assume that just about any escrow service with the word "Safe" or Secure" in their name are neither safe, nor secure.
Avoid dealing with any escrow company that has a ".ORG" as part of their name. Legitimate escrow companies are in business to make money, and would never try to pass themselves off as a non-profit organization, which is what the .ORG means.
If you're buying a used car, email the seller for a VIN#. If you don't here back from him, it's a fraud. Some scammers do actually respond back with VIN#s though, probably copied from another online ad, so be careful.
If the escrow company has the BBB logo on their site, but the link does not go to a BBB review of their business, then the site is a fraud.
Verify with the Better Business Bureau at BBB.com if they have a reliability report on your escrow company. It takes 5 seconds. Legitimate escrow services are members of the BBB, and should have a "Satisfactory Record" on the BBB Reliability Report that pops up.
Avoid dealing with an escrow web site that does not have BOTH the address AND the phone number listed. Always call the phone number to make sure it's real. If you get some bogus message that says "leave a number", it's fraudulent.
Remember that once you send money using Western union or E-Gold through an escrow company, you will never ever see that money again. Once the cash is wired to the other end and picked up by the seller, Western Union cannot get it back.
If you used PayPal to wire money to the seller, you cannot get it back. This is because PayPal is not an escrow service. They just instantly wire the money into the seller's checking account. Once they get the money, the scammers close the checking account, so PayPal could not get the money back even if they wanted to.
Before you wire money through Western Union, call the Western Union Fraud Department, 1-800-325-6000. Explain your purchase situation and ask them if they think it's a scam.
No law enforcement agency, no court, and no lawyer will help you if you get scammed.
Send the escrow company a simple email question and see if they respond. If they don't then consider them to be fraudulent.
Perform searches on Google with the escrow company name, and with their address, to see if they show up in any court documents online, or to see if anyone has posted any bad experiences with them in any online forums. Google does a good job finding matches. Use quotations for search phrases like this: "2900 Vassar Way".