Fraud and online scams are an unfortunate element of buying and selling online. In 2011 alone, the Federal Trade Commission estimated that 10.8% of adults in the United States – 25.6 million people – were victims of fraud. That same study found that 40% of those fraud cases originated online or via email. So, with the web seemingly a quasi-haven for scammers, how can you guarantee that funds are secure and transferred safely when buying or selling a classic car?
While hardly a new technology, escrow is a tried and true process to securely pass funds between two unknown parties, or a buyer and seller that are separated by large distances.
“Almost everyone has heard of escrow at some point,” said PaySAFE Escrow president Matt Medlock. “But most people only think of using escrow with real estate purchases. It’s so much more versatile than that.”
Medlock founded PaySAFE with two key goals in mind: Protect and secure PaySAFE user funds when buying or selling, and providing a simple, online workflow that allows anyone to become a DIY escrow expert. The result is a simple, six step process that allows anyone to draft a purchase agreement, fund an escrow account, securely transfer funds to another party, and see a time-stamped communication history that documents the entire process from start to finish.
“We created PaySAFE with the beginning internet user in mind,” Medlock said. “Both parties are updated via email as they move through the process and can see all actions taken by each user from the moment they create the transaction.”
Using an online escrow service like PaySAFE also completely removes the risk of fraud presented in the form of fake vehicle listings. Because all purchase funds are transferred into escrow prior to shipping, sellers are saved the risk of insufficient funds or non-payment. Buyers are also protected as their funds are held securely with a third party until there’s proof of shipment, or the vehicle actually arrives at its final destination.
Both buyer and seller are also required to provide a form of government ID – a photo of either a current passport or driver’s license – that PaySAFE crosschecks against the origin and destination of all purchase funds.
Because of the two-way protection that escrow offers, Medlock said that the percentage of buyer or seller fraud is reduced to zero.
While there are still plenty of honest people out there, the risk of fraud and scams has become an ever present thought for many an online shopper. Medlock hopes that the escrow process that PaySAFE provides can help put those fears to rest for anyone buying and selling high-dollar items.
“Fraud and scams, sadly, will always be around online; especially around high dollar and luxury items,” Medlock said. “My hope is that we can protect enough people through the use of escrow to make the prevalence of online scams just a small blip on the radar.”