Is escrow safe for online purchases?
Legitimate escrow services provide strong protection for high-value transactions, but fake escrow is a common scam — always verify the escrow company is licensed and independent before trusting it.
Last reviewed: 10 June 2026
Explanation
A genuine escrow service holds funds from the buyer until the seller delivers the agreed goods or services, then releases payment. This model is sound and widely used for domain sales, vehicle purchases, real estate, and high-value freelance projects. It removes the 'who goes first' dilemma from high-stakes transactions between strangers.
The scam version works by the fraudster — usually posing as a seller — insisting on a specific 'escrow' service they have already chosen and linked to. The buyer sends funds to what appears to be a legitimate escrow company, but the site is fake and controlled by the scammer. Once the buyer transfers funds, the scammer and the fake site disappear.
Protecting yourself means choosing the escrow service independently. Research escrow providers before agreeing to one: in the US, escrow companies for internet transactions are licensed state by state, and the California Department of Business Oversight maintains a list of licensed internet escrow companies. Escrow.com is among the most widely recognised licensed services, though there are others.
If a seller insists on a specific escrow company you have never heard of and provides the link, treat this as a red flag. Propose using your own verified escrow provider. A legitimate seller selling in good faith will have no objection to using a licensed, independent escrow service.
Common red flags
- Seller provides the link to the escrow service themselves
- Escrow website was registered very recently or has no verifiable business history
- Escrow company cannot be found on any state licensing database
- Escrow fee is requested upfront separately from the main deposit
- Website design has spelling errors or appears to mimic a well-known service
- Escrow company has no phone number or only a generic email for contact
What to do now
- Verify any escrow company against your state's licensed business database before sending money
- Propose using a well-known licensed escrow provider you found independently
- Never pay escrow fees separately or upfront — legitimate escrow fees come from the transaction proceeds
- If you sent funds to a fake escrow, report to the FBI IC3 and to your bank immediately
- Visit /scams/online-shopping-scams for the full landscape of online purchase fraud
Frequently asked questions
How do I verify a US escrow company is legitimate?
For internet escrow, check the California Department of Business Oversight's licensed internet escrow list, as California licenses most nationally operating internet escrow services. Also check your own state's financial services regulator.
Is Escrow.com safe?
Escrow.com is a licensed, regulated escrow service widely used for domain and high-value online transactions. As with any service, verify you are on the real website (check the URL carefully) and do not use a link provided by the seller.