Buying & selling websites and businesses

Alternatives to escrow.com

Escrow.com has done a brilliant job of projecting itself as the only safe escrow company online. However, that's far from true.

It has managed to do this because there have been a few escrow frauds around and it found an opportunity to play on people's insecurities.

No escrow company is 100% safe. While I'm sure escrow.com is very reliable (and I use them a lot) not many people know that when they enter into a transaction on escrow.com it's not actually handled by escrow.com but the company that escrow.com has "leased" this domain to.

Huh?!

Yes. It's a company called IES (Internet Escrow Services) which is one of the "subsidiaries" of escrow.com. It's not a secret and is all made very clear on the escrow.com site if you read the small print. IES  are authorised by escrow.com as the sole (?) operator of all the transactions that make it to escrow.com. IES don't own escrow.com; it's a separate company. If IES go bankrupt tomorrow - though I have no indication that they will - escrow.com could continue taking business using a new affiliate or subsidiary.

IES is registered and regulated by Californian law. There are instances where that is not necessarily to everybody's liking. Californian Licensing authorities believe that they own the world. Any company not licenced by California - even if it's a British company licenced and regulated in the UK - is in violation of Californian law if they do business in California i.e. one party to the transaction resides in CA, according to section 17200 of the California Financial Code. Also, should anything go wrong with the transaction and you are in dispute with your escrow company - your local courts aren't good enough. Do you really want to go all the way to California to fight it?

Section 17200 is long and boring but if you read it you may be forgiven for thinking it's more about raising revenue for California than protecting Californians. Escrow companies that want to be licenced here have to cough up huge deposits - fair enough - but also huge fees to the State Governments. That higher operating cost has to be transferred to customers - you and me - via higher charges.

eBay themselves recommend escrow-europa, iloxx.de etc. for people in Europe/Germany.

Sedo.com, Sedo.co.uk, Escrowaustralia and numerous others provide just as good a service and are very reliable. In many cases, these alternate escrow companies provide a better service and/or a service better suited to individual transactions and transactions in particular locations. In many cases, they are a lot cheaper, a lot more efficient and a lot safer. See a comparison between escrow.com and iescrow in the image here.

This isn't a recommendation against escrow.com. It's a pointer to the many other reliable escrow companies around who may be better suited to your individual transaction/location.

So why do you see so many recommendations for escrow.com, including our own? Well, it's part the reputation and brand that escrow.com have successfully built up and it may be partly because escrow.com pays webmasters like us, via their affiliate program, for sending them business.