Given the recent locked thread, I was wondering why nobody uses escrow for buying/selling expensive items on the classifieds. Sure it costs a little more than just a PP but given people buying 1k+ things on here quite frequently, surely it’d be better than just taking a punt for either side. I work in an industry where it’s quite common for people to do this and I know a lot of people do it on ebay for cars etc.

Over a hundred quid I think I would either travel and do cash in hand, or just wait for something closer.

Well so would I but we know some people don’t have the inclination. Given in my industry, the typical fee is 3-5% it doesn’t seem unreasonable compared to PP for example.

Over a hundred quid I think I would either travel and do cash in hand, or just wait for something closer.

Nah, on something around £1k you’d be looking at 3-5% for a fairly basic escrow service.

The only problem with escrow, at the moment, is that it is not widely used or understood.

EDIT – damnnnnnn you atlaz 🙂

I thought escrow was one of the widely abused/faked systems used in common internet scams

Well in the same way if you’re an idiot you can get fake oakleys at full price, yes you can be scammed. It COULD be that STW find a service that they recommend and maybe get commission when people on the forum sell things.

use the one that eBay has teamed up with?

It completely defeats the purpose of escrow if both parties cannot rely 100% on the integrity of the service provider

http://www.escrow.com

It COULD be that STW find a service that they recommend and maybe get commission when people on the forum sell things

That would be good – though I doubt they’d be willing to be even tenuously involved in potential scammage and pseudolegal fallout

Why do you have to be an idiot to be sold counterfeit goods ? I’ll have to pass on your thoughts to the pharmaceutical industry

Just don’t deal with wally’s, I either buy off people who have been here for along time or I ask if I can ask for a reference on the forum. So I search their history and email previous customers.

Isn’t Paypal (not as a gift) effectively an escrow agreement?

scaredypants – well that’s true I suppose, I know someone involved in the tracking of counterfeit drugs and his life is very hard. However, the vast majority of internet “scams” are usually foiled by application of common sense. The massive spate of cheap ugg boot scams 2 years ago was down to people being greedy or just plain daft; they saw a discount decided it was too good to ignore and slapped money down. Or like that Indonesian bike shop that popped up; all of us would have loved it to be true but it was clear pretty much everyone recognised it as the scam it was.

Isn’t Paypal (not as a gift) effectively an escrow agreement?

Not really, with paypal you pay for the goods before they have even been sent – it’s payment before the supply of goods/provision of services. Considerable risk for the buyer (which is the reason for paypal’s own “protection” it offers).

With escrow, payment is only made to the seller once the buyer has confimed he accepts the goods. If the buyer rejects the goods, the money is held in escrow until the buyer has returned them to the seller (postage and escrow costs are paid by the rejecting buyer, usually). Once the goods have been confired as received by the seller, the money is released back to the buyer.

but paypal have the power to recover funds at their discretion based on evidence of mis-sold goods?

And what if the buyer says “good are no good” and keeps the goods and gets his money back ?

but paypal have the power to recover funds at their discretion based on evidence of mis-sold goods?

Therein the problem: “at their discretion”. With Escrow there’s no 3rd party, both buyer and seller have to agree.

Edit: obviously there’s a 3rd party, the escrow account holder, but they have no say in the decision.

And what if the buyer says “good are no good” and keeps the goods and gets his money back ?

The escrow provider will not repay the buyer his funds held in escrow until the seller has confirmed that he has has his goods returned.

So, a hypothetical scenario, in no way based on recent events

Say I sold peterfile a frame. He receives it and says there’s a problem. I say there wasn’t a problem when I sent it and I suspect he’s broken it while building it up.

Somebody has a broken frame – who decides which of us keeps the cash ?

No money transfer system can protect me from that, can it ?

I wouldn’t buy (or sell) a used “anything” for a lot of money (hard to define, but I know what the term means to me) without seeing the item first. If I was to sell a frame I’d be videoing a thorough examination of all of it, just before putting in the post.

Then again, maybe I’m a “glass is on it’s way to completely empty” kind of a bloke ! 😐

No money transfer system can protect me from that, can it ?

No.

In an ideal world, the only way you could avoid this is by having both parties present, the buyer inspects the goods for patent defects and then agrees to purchase.

Somebody has a broken frame – who decides which of us keeps the cash ?

That’s one for dispute resolution unfortunately, a service which will probably be offered by the escrow provider (both parties could agree beforehand that they will be bound by the decision of an independent third party in the event of dispute. This is common place for commerical disputes, however it could be cost prohibitive for low value private transactions).

With escrow what happens if you disagree or the seller is annoyed with you and says they have not got the item back?
Ie there is no agreement

I personally don’t think there’s anything wrong with the classifieds and the payment methods used. I mean, compared to the number of complaints we see on the forum, how many successful and happy transactions are there?!

Some people just need to be a bit more careful how they buy stuff.

If the Cannondale guy used a gift payment of over £2000 to someone in a different country, for example, then he’s only got himself to blame if he has no recourse.

Honestly, you’re back to the escrow service mediating/deciding. It’s not ideal but if one person is a dyed in the wool scammer/dick, there’s little alternative.

With escrow what happens if you disagree or the seller is annoyed with you and says they have not got the item back?
Ie there is no agreement

For escrow to work, you really need properly tracked items. So there would be no dispute that the seller had received the items back.

If there is a dispute as to the condition they are returned in, then it’s back to dispute resolution – which would be the case regardless of the payment mechanism.

It’s worth adding that escrow is well established in many, many industries. It’s a tried and tested method which, although not completely risk free, it mitigates most of the key risks. We use escrow on contracts with eye-watering value and a complex acceptance protocol (i.e. software which has to meet certain output specs, which can run into thousands of requirements). If it works for that, it can work for a bike frame.

yeh, properly tracked, fully insured etc. Just in case the other person’s an arse

makes me all a bit 🙁

With escrow is there still room for a Realman Vs Jimmy type scenario to sneak through? (whatever happened with that anyway?)

glupton – Well in that case, jimmy would have said “brakes not acceptable” and put them back in the post. Realman would have had his brakes back and the escrow company would have given jimmy his cash back. If jimmy and realman tried to do a deal outside this, they’d be entitled to I guess (realman paypalling some money over to jimmy for example).

Hi,

Just to let you know that Europe’s leading escrow service is Transpact.com.

It is FSA Authorised and Regulated as a payment service provider.
And it only costs £2.99 per party per transaction to use up to £10,000 (slightly more over £10,000).

You can hand-craft the conditions to ensure that you are covered and fully protected against all eventualities.

And large companies, such as AutoTrader in the UK, make use of Transpact.com.

[Disclosure – I work for Transpact.com – it is a great company and service – I posted this post because it is directly relevant to this thread]

Google Alerts working well for you there then fairtrial? That said, appreciate the fact you didn’t astroturf your way onto the forum and said where you were from. Fair indeed.