What is a fake escrow scam?
A fake escrow scam in a buyer/seller transaction proposes using a fraudulent escrow service controlled by the scammer, giving the victim false confidence that funds are protected while the fraudster simply steals the payment.
Last reviewed: 10 June 2026
Explanation
Escrow services legitimately protect both parties in high-value transactions by holding funds until agreed conditions are met — often used in property, business acquisitions, and high-value goods sales. Scammers exploit the credibility of this concept by either creating a fake escrow website or directing victims to a 'trusted' escrow service that they secretly control.
In a typical scenario, a fraudulent buyer in a car or domain name sale insists on using a specific escrow service, sending a link to what appears to be a professional platform. The seller transfers the item or provides access before checking their own 'funds received' notification — which is also fake. The buyer disappears with the goods and the escrow service, being fraudulent, never releases payment.
The reverse also occurs: a fraudulent seller directs a buyer to a fake escrow, the buyer deposits funds 'safely', then both the seller and the escrow service disappear.
Always verify escrow services independently. Legitimate services are licenced financial intermediaries with verifiable registration, regulated in the jurisdictions where they operate, and do not accept customer direction to their platform from the other party in a transaction.
Common red flags
- The other party insists on a specific escrow service and sends you the link
- The escrow service website was recently created or has minimal independent reviews
- The escrow company cannot be found on your national financial regulator's register
- You receive a 'funds received' notification before you have confirmed the transaction independently
- The buyer or seller becomes unusually insistent about the escrow service choice
What to do now
- Only use escrow services you find and verify independently, never one introduced by the other party
- Check escrow service registration with your national financial regulator
- If defrauded, report to police and your national fraud authority
- Contact your bank if any payment method allows for a dispute
- Warn the platform where the fraudulent buyer or seller was found
Frequently asked questions
How do I find a legitimate escrow service?
Search your national financial regulator's authorised firms database for 'escrow' or 'payment intermediary'. For US transactions, Escrow.com is a well-known registered service. Verify the site independently using a search engine rather than a link from the transaction counterpart.
Is it safer to use a platform's built-in payment protection?
Yes, generally. Established marketplaces (eBay, Etsy, Airbnb, Upwork) offer their own buyer and seller protections integrated into the transaction flow. These protections evaporate the moment a transaction is moved off-platform — which is a common scammer tactic.