How do I spot a fake escrow service in an online transaction?
Fake escrow sites are created by scammers to simulate a neutral third party — they collect your payment and hand nothing to the seller or the buyer.
Last reviewed: 10 June 2026
Explanation
Escrow is a legitimate service in which a trusted third party holds payment until both buyer and seller have fulfilled the transaction conditions. In online transactions for high-value items — vehicles, domain names, expensive electronics — genuine escrow reduces risk for both parties. Fraudsters exploit the credibility of this concept by creating fake escrow sites and proposing their use during negotiations.
The scam works in both directions. A seller may propose a fake escrow site to a buyer: the buyer deposits funds, the site confirms receipt, the 'escrow' is never released to the seller, and the funds disappear. Alternatively, a buyer proposes the fake escrow to a fraudulent seller who is in on the scheme: the buyer ships the goods after seeing a fake confirmation, and the money disappears without the buyer ever receiving payment.
Legitimate escrow services for online transactions are few and well-known. In the US, Escrow.com is widely cited as the primary legitimate option. In the UK, escrow is used in property transactions through regulated solicitors. Any other site proposed during a negotiation — particularly one you have never heard of — should be researched thoroughly before use.
Key verification: search the escrow company name, check that it has been operating for multiple years, verify it is registered with the relevant financial regulator, and look for reviews on independent platforms. Do not rely on the trust marks or regulatory logos on the site itself, which are easily fabricated.
Common red flags
- Escrow service was suggested by the other party rather than you initiating it
- Escrow site was registered recently or has no verifiable operating history
- Site's regulatory seal links to an image rather than a live register check
- No phone number, physical address, or company registration on the site
- Other party is unusually eager to use this specific escrow service
- Service not listed in any independent review or financial regulator database
What to do now
- Research any proposed escrow service independently before using it
- Verify the site's registration date and regulatory status
- Prefer to use only well-established escrow services with verifiable histories
- Report fake escrow sites to Action Fraud (UK) or the FTC (US)
- If you deposited funds to a fake escrow, contact your bank immediately
Frequently asked questions
Is all escrow fraud the same scheme?
No. Some versions target buyers, others sellers, and some involve both parties as victims of a third-party escrow operator. The common thread is a fake or fraudulent escrow website.
How do I verify Escrow.com is legitimate?
Escrow.com is licensed by the California Department of Financial Protection and Innovation. You can verify this on the DFPI's website. It has a verifiable operating history going back many years.
What if the transaction involves a vehicle purchase?
For vehicle purchases, use an in-person transaction or a solicitor-managed transfer. Never use an unfamiliar online escrow service for a vehicle sale arranged through a classifieds site.