Internet Fraud and What to Watch Out For
The information below is posted on the Department of Business Oversight (DBO), formerly the Department of Corporations, website. Department of Business Oversight (DBO): http://www.dbo.ca.gov/
Q. What is an online escrow company?
A. Online escrow companies are used to pay for items found through online auction sites and marketplaces that advertise classified ads, usually for expensive items like computers, electronics, cars, and jewelry. Some Internet auction sites, like eBay, recommend that their users pay for purchases over $500 through an online escrow company. Escrow is also associated with purchasing real estate where the escrow company distributes proceeds from the sale of real estate to, for example, lenders and brokers.
Escrow providers help prevent fraud by acting as independent third parties between buyers and sellers. After the escrow company receives the buyer’s check, money order or credit card payment, the company notifies the seller to ship the purchase to the buyer. The escrow company does not forward the buyer’s payment to the seller until the buyer receives the item. Buyers usually pay the escrow service fees, which are generally a percentage of the purchased item’s cost.
A. Persons or companies performing escrow services over the Internet in California, or performing escrow services for consumers in California, must comply with the licensing requirements of the California Escrow Law.
The licensing and regulatory process ensures that companies’ owners and key employees have been subject to background checks performed by the Department of Business Oversight (DBO), that the company’s financial condition and records are adequate, that the company is properly bonded, and that all customer funds are segregated in trust fund accounts until the terms of the escrow are met.
Q. How are online escrow companies licensed and regulated in California?
Q. How many escrow companies are licensed by the DBO, formerly the Department of Corporations?
A. There are about 650 independent escrow companies in California licensed by the DBO. The Department licenses only one online escrow service: www.escrow.com.
A. Stolen identities and credit card numbers are used to open a Web hosting account, and the scammers upload content files to the Web hosting server to create a fake escrow service Website.
Sometimes a phony escrow company site can be detected by its sloppy content, with spelling and grammar errors and inconsistent information. Other times, the site’s information may have been copied from legitimate escrow company Websites.
