People have been using escrow services for decades without knowing it. An escrow is an account created by a broker for keeping funds for the broker’s principal, or any such person, until the completion or termination of their transaction with a third party. Believe it or not, the escrow process is currently being used in Automated Teller Machines (ATMs) and vending machines throughout the world. These machines hold on to the cash until the completion or termination of a transaction between two parties, which they then keep or return depending on the outcome of the transaction.
Escrow services are also widely used on the internet. Just like their traditional counterpart, internet escrows operate by placing money in the hands of an independent and licensed third party with the intention of protecting both buyers and sellers in a transaction. The moment both parties validate the completion of the transaction, the money is then released. If at any time disagreements between the parties arise, they are settled though dispute resolution. The outcome will then dictate what happens to the money in escrow.
Those who seek to buy or sell their wine collection can benefit from these services. But wine buyers and sellers beware; the internet is packed with bogus escrow services. A perpetrator to these schemes will usually suggest to his unwary victims that they use a third-party escrow service to facilitate a transaction. This persuades the party to participate. Unbeknown to their victim, the perpetrator has already prepared, as a ruse, an escrow site closely resembling the legitimate escrow service. The victim sends payment or merchandise to the phony escrow service company or to the perpetrator, and waits only to receive nothing in return from the escrow site.
How can you be protected from escrow fraud? Use a licensed escrow company. These companies conform to regulations imposed by state authorities. They are also required to post bonds so that consumers can be assured that they can recoup the money if they lose it in the escrow process.
How can you be certain that an online escrow company is licensed? Check with government authorities to see whether they are licensed. There are numerous search able online government databases of companies that are licensed escrow services. For instance, the following is a simple list of licensed escrow services located in Nevada: http://www.mld.nv.gov/EscrowAgentSearch.asp
Even if you have managed to research all of this, a wine buyer or seller may come to you and suggest using a third party escrow service. You can use their choice of escrow service, but only if you have verified the authenticity of the escrow site. Who knows? They may know a better escrow site that you do. By taking all of these precautions, you can perform online commerce safely and securely.