How to Avoid Getting Scammed Using Escrow.com
Many websites provide escrow services. In this article, I will be referring only to Escrow.com. It makes sense that some of the tips I provide here are very likely to apply to other escrow services. However, you can’t count on these services, and therefore, if you plan on using a different escrow service, you will have to do your own research on it to make sure you will not get scammed. One last note – I will focus on the Seller’s side and less on the Buyer’s side.
Escrow.com is safe only if you know how to be careful during the process and only if you follow the precautionary steps given in this article. Failure to do so may lead to an unfortunate situation in which you may be scammed by someone with fraudulent intentions.
Step 1: Trust
Trust is a very important factor when conducting a deal. The problem is, it’s not easy to identify who’s trustworthy and who isn’t, especially when you don’t know the person on the other end. However, you can try determining whether you can trust the person you are making the deal with before starting the process. The best way to do so is to correspond with each other via emails and setting up a Skype call. Try asking simple questions like ‘Why are interested in my website?’, ‘What are you doing for a living?’. Basically, you have to use your intuition – if something doesn’t feel right – probably something is not right.
Step2: Questions the Buyer is Asking
If the buyer is serious about the purchase he will want details regarding your website such as: traffic, revenue, who designed the website, who else is working on the website (designers, programmers, etc), whether the website panelized by Google, etc. If the buyer wants to close the deal quickly without asking you any questions – it should raise your suspicions.
This is the most important step of all. Failing to follow this step could put you at a huge risk.
When creating the transaction (either by you or the buyer) you both have to submit an email address. These emails will receive updates from Escrow.com regarding the transaction so you must enter a real email address (preferably your own email address).
When selling your website (files + domain or just a domain) Escrow will guide you through the entire process, but they will leave out some important things you need to do. Before I explain exactly what, I want to explain when it happens. When it’s time to transfer the domain, the buyer will issue a request through his registrar (GoDaddy for example) to transfer a domain (your domain in this case) to his account. The registrar will email the owner of the domain (to the email listed on the domain’s Whois) that a request has been made to transfer the domain plus a code. Next, you will have to send that code to the buyer and who will enter into in his registrar and only then will the domain be transferred. Now you are probably wondering what happens if you transfer the domain to the buyer (which is also the time you should get your money) and the buyer disappears or he says he never received the domain? What will happen to your money? Is it possible to lose the money you deserve and to lose the domain? The answer to the last question is YES. This could happen if you send the code you received to a different email address than the one your buyer listed on Escrow. For instance, if you correspond with your buyer for a while through one email and he enters on Escrow a second email and you send the code to the first one – you could get scammed, simply because you can’t prove that the first email belongs to the buyer.
How to Prevent That Scam?
You MUST correspond with the buyer, during the entire transaction, through the email address he entered in Escrow (it will appear there when you login) and ask him to confirm he received the code/files (don’t proceed until you have that confirmation). Moreover, when you send the buyer important information or details, like the code for transferring the domain or the website’s files you MUST CC support [@] escrow.com. This way if the buyer says he hasn’t received something you have all the proof needed to show otherwise. Once the Whois of the domain is changed (it doesn’t matter which email will appear there) and you have proof of sending the code to the buyer, Escrow will have to begin the inspection period.
What happens if you send a false code to the buyer and then quickly change the Whois details? I’m not sure, but I can guess Escrow will not release the money to the seller until everything is sorted out. If you are the seller, call Escrow and ask them this very same question. Don’t proceed with the transaction until you feel 100% secure.