Hi - Based on the various PMs and feedback I received on my guide to sending / receiving Paypal, I realise that there are 2 new common questions - use of:(1) Western Union
(2) Escrow services
(1) BE WARY OF SELLERS ASKING FOR WESTERN UNION SERVICES - 9 TIMES OUT OF 10, IT'S POSSIBLY FRAUD.
What's the Western Union Service? It's a wire transfer service that is meant to enable people to easily transfer funds from one point of the world to any point of the world. Is it useful? Undoubtedly so, because Western Union outlets are found all over the world. Even in a rural district of a third-world nation, you can wire your funds there.
HOWEVER, IT IS RIFE WITH FRAUDSTERS WHO KNOW HOW TO ABUSE THE SYSTEM.
You can draw the analogy that Western Union works on a very simple userid and password system.
There are 3 basic steps to the system.
(a) You go to a Western Union outlet and create a payment of US$[X], as well as create an identification key (a unique password).
(b) You communicate that identification key to the recipient.
© The recipient goes to *ANY* Western Union outlet in the world, and provides that identification key, they get their funds.
You might ask... but I know the person's name, how can he scam me?
I could call myself Abraham Lincoln, ask you to give me the ID key, and I can withdraw the money. Am I Abraham Lincoln? *checking myself* Nope, certainly not. To understand this flaw in the system, Western Union, as mentioned above, is designed for the purpose of sending money to any part of the world - even rural districts of third-world nations. In some nations, there is no national identity card system. Hence, ID checks are not required. So, in the end, you have lost your money, and for all you know, you sent your money to Abraham Lincoln. Good luck in finding Mr Abraham Lincoln
An alternative that I have often seen is where a scammer asks you to send funds to another person (perhaps, your friend). They ask you to provide confirmation on the Western Union transfer by giving them the payment details. DO NOT GIVE IT TO THEM. Though you had intended to send the funds to your friend (perhaps acting as your escrow service), they can INTERCEPT THE PAYMENT WITH THE IDENTIFICATION KEY.
IN SUMMARY, ALWAYS AVOID WESTERN UNION-TYPE OF DEALS. 9 times out of 10, this will save you money.
(2) BE WARY OF THIRD-PARTY ESCROW SERVICES, ESPECIALLY "UNFAMILIAR" ONES.
What's an escrow service? You can think of an escrow service as an independent third-party. You send funds to the escrow service, the escrow service releases those funds to the seller once the buyer confirms receipt of the goods.
AN ESCROW SERVICE IS RIFE WITH FRAUD - BOTH THE SELLER AND THE BUYER CAN BE AFFECTED!
There are 3 basic steps to the system (blame it on my consultant training, I always think in 3s haha).
(a) Buyer sends funds to Escrow.
(b) Seller sends items to Buyer.
© Once Buyer confirms receipt, the Escrow releases funds to the Seller.
Fraudsters attack the system in the following manner:
(a) A fraudulent seller asks you (the potential buyer) to use an escrow system, XYZ. They might say this because it's a high-value item, and they have low credentials / reputation / feedback. Sometimes, they even say THEY DON'T TRUST YOU, and they want to use a third-party escrow to make sure the payment's safe. Once you have sent payment, the fraudulent seller disappears, and SO DOES THE ESCROW SERVICE. Because what happens is that the seller sets up a fake ESCROW SERVICE to collect the payment. All you will have is some fake company ID which was used to set up the fake ESCROW SERVICE in the first place. You don't even have the names of the people behind the business.
(b) A fraudulent buyer may say THEY DON'T TRUST YOU, and suggest that both of you use an escrow system, XYZ. Funds are sent to the escrow service. After you have sent the goods to the buyer, and you are expecting the funds from the escrow service (which is only released once buyer confirms receipt), the escrow service performs a David Copperfield and disappears! So, you are out of pocket for the goods you have sent.
There are exceptions to this - though it's more expensive, you should only use brand-name Escrow Services (an eBay approved international escrow service or www.escrow.com).
DON'T USE ANY OTHER ESCROW SERVICES - SAVE YOURSELF FROM FRAUD!
Have a good year ahead,
safe trading,
