For several years now people buying or selling larger ticket items on line have been turning to escrow services to protect both sides of a transaction. In brief the buyer deposits payment with the escrow service that then lets the seller know the money has been received. The seller then ships the item and the buyer lets the escrow service know the item has been received and the service releases the money to the seller. The escrow service charges a fee of around 3% of total sale including shipping charges. The auction site eBay recommends the use of escrow accounts for any purchase of $500 or more. As the word escrow implies these services are very similar to the escrow accounts used in real estate purchases and are often provided by the same companies. (Editor’s Note: PowerSellers interested in escrow services might also be interested in great buys on wholesale customer returns at Top Ten Wholesale.)Generally speaking escrow services provide an excellent way to guarantee security for both participants in a transaction. The seller knows that their money is real and has been paid and the buyer can be confident that they will get the merchandise and have a chance to inspect it before their money is beyond their reach.That being said there are many concerns for both parties. Fraudulent escrow services abound online with plans to steal from either end of an online transaction. The dishonest escrow services are much like phishing scams. The usual manner for these scams to work is a thief creates a fake escrow service website, some of which look very convincing, and lures the victim to that site by insisting the fake escrow service is the only way they will trust the transaction. If the thief is the buyer the seller will be sent an e-mail saying that the money has been deposited and to ship the merchandise. Of course the victim never hears from either the escrow company or the buyer again and is left contemplating their gullibility.In the last year consumer groups have reported hundreds of fraudulent escrow companies. In 2003 the Federal Trade Commission shut down Premier Escrow for its illegal practices and filed suits against many more. Alarmingly some sites were not shut done but merely received warning letters. As threatening as those letters might have been it is improbable that the thieves went running for the hills because of them. Even when shut down it is very easy for scammers to merely open another site and keep up their nefarious business.It has been estimated that fake escrow services outnumber legitimate ones several times over. So if a customer suspects an escrow service might be a fake there is a very good chance that they are correct. There are a number of ways potential victims of a scam can protect themselves. First, be very suspicious of a buyer or seller that demands the use of a particular escrow service other than the most established names such as Escrow.com or AuctionPix. Look at the escrow service site before agreeing to anything. Check the site’s link to be sure they actually go somewhere, fraudulent services often place fake links to give their site a more convincing look. However, just because the links check out don’t rush forward with the transaction. If an escrow service claims to have state licensing or to be bonded a few phone calls to the appropriate state agencies will reveal the truth of the matter. While checking out the service’s website look for customer service telephone numbers. In this age of dwindling customer service and automated switchboards it is easy to fall into the habit of thinking of actual phone numbers where you talk to a human being as being a thing of the misty past but a legitimate escrow service should be reachable by phone. Even if you find a telephone number don’t be satisfied. Call the number to be sure it actually is answered and is what it claims to be. Finally, many fraudulent escrow services originate overseas. If a escrow service claims to be located in the United States read all the text of the service’s website looking for spelling and grammatical errors that might give you a clue that the site is in fact made by someone with a poor command of the English language.While the idea that there are thousands of criminal escrow services out there just waiting to pounce on the unwary might give pause to the on line business person the legitimate services provide an invaluable tool to protect their interests. Just make sure the service is for real. There are services out there such as the Auction Guild a trust worthy watchdog group that keeps an eye on the escrow industry and will research any escrow service for ten dollars. If you are doing business in the U.K. check out Companies House, a clearinghouse of legitimate services.http://www.auctionguild.com - An auction industry watchdog group with advice, warnings, and research services. Take a look at the fascinating Dialogue with a scammer.Art Mickelwraith is the author of the Wholesale Buyer’s Guide at TopTenWholesale.com. He can be reached at artmicklewraith@gmail.com.