When it comes to buying and selling goods on classified marketplaces, the potential for scams and fraud is ever present, from fake listings to items not getting delivered. However, there are ways to protect yourself and your hard-earned cash. Trustap’s escrow payment app is one method that provides both buyers and sellers with peace of mind when transacting with strangers online. In this blog, we will explore why using Trustap or other escrow payment methods is the best option to avoid payment scams on classified marketplaces.
Common Scams Escrow Can Prevent on Classified Marketplaces
Online classified marketplaces have become a haven for fraudsters conducting their scams. You may come across fake sellers trying to sell non-existent products, sellers who take your money and never deliver the goods you have paid for or buyers who want to pay with credit cards that are stolen. These types of scams can cause significant financial harm, making it integral for classified users to be cautious while conducting transactions on classified marketplaces.
Common Scams on Classified Marketplaces
One of the most common scams on classified marketplaces is fake product listings. Fraudsters will post highly discounted items to lure in buyers, only to steal their money and never deliver the product. Another common scam is where a seller accepts payment and never ships the item. Other scams involve chargeback fraud, where a buyer initiates a chargeback claim even though they have received the product, or more than one buyer trying to purchase the same item. To overcome this type of Fraud, Trustap has integrated shipping tracking into the transaction model. The seller only gets paid when the product is delivered and the buyer has verified the product is as described in the listing.
How to Identify Potential Scammers
Scammers often use similar tactics to lure in their victims. Some of the red flags to watch for include unrealistic prices, sellers unwilling to provide further photos of their products or refuse to answer simple questions about the product, and insist on using a specific payment method like cash or bank transfer. Generally, if you even suggest using an escrow service like Trustap, scammers will decline.
What is Escrow and How Does it Work?
Escrow is a payment method that involves a third-party service provider that holds the money during a transaction. The funds are only released to the seller once the buyer has received and approved the product. This method ensures that both buyers and sellers are protected during the transaction process.
Many Classified Marketplaces are integrating escrow payment methods such as Trustap to become a secure transactional marketplace. Trustap provides a digital escrow-style process that involves three key stages:
- The agreement between the buyer and seller on the price and product details. This is where the buyer and seller come to an agreement on the product, its condition, and the price. Once the details are agreed upon, the buyer initiates the payment process by transferring the funds to the Trustap hold.
- The second stage of the process is the delivery of the product. The seller ships the product to the buyer and inputs the tracking number within the Trustap transaction.
- In the final stage, once the buyer receives the product (verified by the couriers tracking number) and is satisfied it is as described and fit for purpose, the funds are then released to the seller.
Escrow Payment Methods vs PayPal
Online payment platforms like PayPal provide a secure way to send and receive money online. However, they are often criticised for being reactive to fraud rather than preventative.
To explain this, Paypal’s buyer protection will only help you after a scam has occurred. Once you report the scam you will enter a 180-day resolution period whereby you are not guaranteed to be rewarded a refund.
On the other hand, escrow is deemed preventative to online payment scams, if the received merchandise is fraudulent, is not as described or never arrives – the funds will always be returned to you right away.
Choose the Right Escrow Service for You
If the classified marketplace does not have an escrow service integrated on their website, it is essential you choose the correct service to ensure a seamless experience.
Factors to consider when selecting an escrow service:
- Reputation: Look for escrow services with positive reviews and a good reputation in the market.
- Cost: Consider the fees charged by each service and choose one that is affordable for you.
- Currency: Make sure the escrow service is available in your area.
- Payment methods: Check if the escrow service accepts the payment method you prefer such as Google and Apple Pay.
- Support: Choose an escrow service that offers excellent customer support and is responsive to your queries.
Tips for a Safe and Successful Escrow Transaction
While escrow services provide a secure way to conduct transactions, there are still some things to keep in mind to ensure a safe and successful experience.
Communicating with the Buyer/Seller
Proper communication is essential before and during the transaction. Clarify any doubts you have and make sure that you understand the product details and shipping terms. This can help prevent misunderstandings that may lead to disputes later on.
Verifying the Legitimacy of the Escrow Service
Before using an escrow service, make sure that it is legitimate and reliable. Research the service and read reviews from other users to ensure it offers the features you need and provides excellent customer support.
Ensuring a Smooth Transaction Process
After choosing an escrow service, make sure to follow the steps outlined by them to complete the transaction successfully. Verify that the product details and shipping information are accurate and keep all transaction records safe in case of disputes.
Escrow is a safe and secure way to conduct transactions on classified marketplaces with peace of mind. By understanding the risks of classified marketplaces, choosing the right escrow service, and following the tips for a safe and successful transaction, buyers and sellers can feel confident in their transactions and avoid losing their hard-earned money.