Escrow Scams in Car Buying: How to Protect Your Money

The Escrow Scam Explained

Escrow is supposed to protect buyers and sellers. Money is held by a neutral third party until both sides complete their obligations. In theory, it's perfect for car purchases—you don't pay until you have the car, the seller doesn't transfer until they have the money.

Scammers exploit this trust. They create professional-looking fake escrow websites that steal deposits. The average victim loses $8,500, and fewer than 2% recover any money. These scams target buyers willing to pay significant sums for vehicles they can't inspect in person.

How the Scam Works

Step 1: Attractive Listing

The scam begins with an underpriced vehicle listing—typically 20-40% below market value. The listing may be on Craigslist, Facebook Marketplace, or classified sites. Photos are stolen from legitimate listings.

Step 2: Out-of-Town Seller Story

When you contact the seller, they explain why they can't meet in person: military deployment, work relocation, recent move, or family emergency. The story prevents you from inspecting the vehicle.

Step 3: Escrow Suggestion

The seller suggests using an escrow service for "buyer protection." They provide a link to a professional-looking website. The site may reference eBay Motors, Amazon, or other trusted brands to appear legitimate.

Step 4: Fake Escrow Website

You visit the fake site. It looks professional—logos, trust badges, customer testimonials, even fake customer service numbers. You're instructed to wire money or send cryptocurrency to complete the escrow deposit.

Step 5: Money Gone

Once funds are sent, the scammer disappears. The website may go offline. The phone numbers disconnect. The vehicle never existed. Wire transfers and cryptocurrency are irreversible—your money is gone.

Identifying Fake Escrow Sites

Domain Age and Registration

Check when the domain was registered using WHOIS lookup tools. Fake escrow sites are typically days or weeks old. Legitimate escrow services have established domain histories. A 2-week-old "trusted escrow" is not legitimate.

URL Analysis

Scammers use URLs that look similar to legitimate services:

• escrow-motors.com (fake) vs escrow.com (real)
• ebay-vehicleprotection.com (fake)
• amazon-auto-escrow.com (fake)
• Any combination of trusted brand + escrow terms

Contact Information Verification

• Call any listed phone numbers—do they answer? Do they seem legitimate?
• Google the physical address—does it exist? Is it an actual business?
• Email response quality—generic responses indicate scripts, not real service

Payment Method Requests

Red flags in payment requirements:

• Wire transfer only (irreversible, preferred by scammers)
• Cryptocurrency accepted (irreversible, anonymous)
• Gift cards (never legitimate for escrow)
• Zelle, Venmo, Cash App (irreversible peer-to-peer)

Legitimate Escrow Usage

When Escrow Can Make Sense

Legitimate escrow protects long-distance vehicle purchases when:

• You choose the escrow service independently (never seller-suggested)
• You've verified the service is licensed and established
• You arrange independent vehicle inspection before funds release
• You use protected payment methods to fund escrow

Escrow.com: The Legitimate Option

Escrow.com is a licensed, legitimate escrow service that handles vehicle transactions. If you use escrow, go directly to escrow.com—type it yourself, never click a link. They are licensed by state financial regulators and provide real buyer/seller protection.

Better Alternative: In-Person Transaction

The safest approach remains in-person transactions:

• Inspect the vehicle before paying anything
• Verify the seller's identity matches the title
• Exchange cash or verified cashier's check for title
• Complete paperwork together

If the seller won't meet in person, the "deal" isn't worth the risk.

What To Do If Targeted

Before Sending Money

• Stop all communication with the seller
• Do not click any links they've sent
• Report the listing to the platform (Craigslist, Facebook, etc.)
• Report to FTC at reportfraud.ftc.gov

After Sending Money

• Contact your bank immediately—some wire transfers can be recalled if caught quickly
• File police report—create official record
• Report to FBI's IC3 (Internet Crime Complaint Center)
• Report to FTC
• Document everything—screenshots, emails, website URLs