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|The Rub Of Escrow: I Think You May Be A Thief But Please Do Business With Me|
When Is Escrow A Necessity? When Is A Man's/Woman's Word - A "Hand Shake Deal" - Enough?
I've sent money all around the world, never relying on escrow, because I firmly believe that there are MANY people who value their reputation far more than they value a few thousand or tens of thousands of dollars. Such are the people that I have wired money to without a contract, without using escrow.
Have I ever used an escrow service? Sure, a few times, mostly when I was dealing with someone about whom "evidence of standing and/or reputation" wasn't readily available.
But, really, at this stage of the domaining process I'm no longer open to a buyer appraoching me and insisting on using an escrow. Why? Because implicit in the demand/insistence, is the unstated belief or suspicion or concern that I may be a thief - I'll take the money and never deliver the goods. As if I just crawled out from under some rock where I've been hiding since my last domain deal heist. :P
If this costs me a deal here and there, so be it. I am no longer willing to countenance the implicit "I doubt your honesty". Phooey! You asked ME to do business, but I'm untrustworthy? So why are we doing business?
Forget the fact that as a lawyer, as in the case of most lawyers, after some ~30 years of practice I've handled millions of dollars of other people's money - essentially "as escrow", i.e., money "in trust" (my trust account).
Sure, I get that most people don't have that extra credential, but most people I did business with didn't have it. What they had was evidence of standing, evidence of business reputation/success. In other words "no bad rap".
So, in forgoing deals where a buyer insists on using an escrow service, am I acting like a loon? A bit to prissy, full of my self, high on my horse?
Or is it just a matter of "Hey, it's your choice to pass up the money . . . you loon"?
When or under what circumstances is escrow a necessity? When are you willing to dispense with "domain escrow"?
Is escrow fool/failure proof? I have my doubts that it's a perfect system. Anyone ever use an escrow service and get burned?
Webwork you been in the business a long time and have seen many or heard of many people being burned one way or another. You know the tale tale signs of a rotten deal and can sense this isn't right. The people your dealing with are new all they know is distrust horror stories and being warned over and over always use an escrow service when buying a domain.
Times are changing many people have no morals sense of right and wrong and certainly no reputation.
Escrow is the most safe way to sale a domain name because the funds aren't released until both parties have done what needs to be done to release the domain. Can you be burned well anything is possible in this world today but I think if you are burned the escrow service takes the hit and not the buyer or seller.
|Documents, real estate, money, or securities deposited with a neutral third party (the escrow agent) to be delivered upon fulfillment of certain conditions, as established in a written agreement. |
It certainly is much safer than wiring money with no contract.
Are you full of self na I see you as a man of his word based on a solid reputation that stands behind what he says. Problem is there just are way more crooks than honorable people in the business as I am sure your well aware of.
It is the same thing as a pre-nuptial. It is cynical in nature.
That being said when you have something to protect and you don't take those steps out of faith, then when your faith is broken you are left asking yourself... why didn't I take the necessary steps.
I totally get what you are saying, but remember you have a lot to protect and being an old school man of your word is great, but it isn't good enough reason to put yourself at risk like that.
It was a sad day for me when I finally realized that a hand shake deal didn't mean crap when things go bad. I, like you, want to have faith in my fellow man, reality has killed that dream though.
First comment: In today's world, never forget that reputations can be manufactured as well as earned.
|So, in forgoing deals where a buyer insists on using an escrow service, am I acting like a loon? A bit to prissy, full of my self, high on my horse? |
Yep, you are.
Your thinking is exactly backwards, IMHO. Escrow IS an expression of good faith, and using a process to reduce risks on both sides should be the primary operating assumption when a deal is being made. Escrow should be the rule, not the exception, especially when a deal is being made between parties who don't know each other very well.
Dispensing with escrow should be reserved for situations of high personal trust and confidence, or when the stakes are small.
|Phooey! You asked ME to do business, but I'm untrustworthy? So why are we doing business? |
Duh, because you have something I want and I'm willing to pay for it.
It doesn't follow that I should be required to trust you unconditionally, though, and it's unreasonable, even arrogant for you to demand that.
If escrow annoys you so much, simply require the party who wants it to pay the fees.
A smart business person stays focused on the deal and does not manufacture reasons to feel slighted.
Haha, I'd be offended if I took the person out for dinner and then they still wanted to use an escrow service.
Someone I know strictly online? Of course I wouldn't mind, and neither should you. People change when money is involved. Contracts, saved emails, escrow....anything that protects you and your money is highly recommended. I tell everyone to not take it personally and they don't because business is business.
|If escrow annoys you so much, simply require the party who wants it to pay the fees. |
What else annoys me about escrow:
- Additional steps
- Additional delays
- One more person/entity involved in the deal
- More emails to track, get filtered, etc.
- Waiting to get paid, oftimes 1-2 weeks as funds get moved around
- Added layers of uncertainty
|It doesn't follow that I should be required to trust you unconditionally . . it's unreasonable, even arrogant |
Should I respond by saying that, absent evidence that I am a shaddowy, untrustworthy character, that it's delusional to not trust me? Deals fall apart every day because one party refuses to accept another's "condition of the deal". Is everyone who doesn't submit to another's demands or requirements therefore arrogant?
|manufacture reasons to feel slighted |
AFAIC, this is beyond "it's personal", i.e., "I feel slighted".
I want to take a stand for something, to take a stand for the proposition that there are people - and there should be more people - for whom and with home the deal begins and ends with their word.
One consequence of this unreasonable, arrogant posture is simplifying the transfer process. No extra fees. Swift action. As soon as the funds clear my account I push the domain the same day.
All the person has to do is to make a rational decision. All they have to do is rationally decide the question: IF I don't trust this person what is the reason and proof for casting doubt upon them? Is that something about me or something about him? What reason has he given me for not trusting him? None? Nothing? Then perhaps I'm being unreasonable, irrational?
I suspect it's been an interesting excercise for everyone who has recently done business with me. Maybe, in so "doing the (unreasonable) deal" my transactional partners get to experience that people are, in fact, trustworhty. Maybe we all need to face the fact that thieves are the exception - the .005% - not the rule, and maybe we could stop funneling money all over the place based upon unreasonable fears.
When the day comes that thieves are the rule and not the exception then I'll consider escrow obligatory. Until then discernment is the order of the day, and a better day it is when people experience trust, isn't it? :)
Every time I push a domain a person somewhere experiences trust, trusting, giving trust, that people ARE trustworthy, that it's okay to trust people.
We live in a world where, for the past two decades, children have been admonished "Don't trust strangers". The problem with that ubiquitous idea and training is that 99.9999999999999999% of this world is comprised of . . . . yes, untrusthworthy strangers. ;)
Making trust a condition of the deal is a crazy idea, for a crazy world, that only crazy me would introduce into "business-as-usual-means-I-don't-trust-you-as-usual".
|As soon as the funds clear my account I push the domain the same day. |
I note that you're not the one taking any risk here.
|and a better day it is when people experience trust, isn't it? |
Within the last year I got stung for a thousand bucks by someone I thought was trustworthy. That experience of trust was definitely not a better day.
|Should I respond by saying that, absent evidence that I am a shaddowy, untrustworthy character, that it's delusional to not trust me? |
No, it's not delusional, and it is unfair of you to word it that way.
You're free to turn down whatever deals you want for whatever reasons you want. But don't go questioning someone else's rationality about preferring to use escrow unless YOU are the one willing to take the risk of trust.
Push the domain first then trust that you'll get paid!
|I note that you're not the one taking any risk here. Push the domain first then trust that you'll get paid! |
I knew that was coming. ;P
One component of trust is transparency.
Unless I'm hiding my WhoIs infomration you can see that I hold/control the domain. You can actually see my street address. You can, in fact, look me up and call me on a land line. Further, by checking my name, you can gather all manner of references, i.e., "Who is this guy? Is he on the up-and-up?"
The only question then is "Will I deliver or am I a liar or a thief?"
Since I allow my buyer unfettered access to my relevant personal details, to validate that I am in fact able to transfer the domain, should I ask my buyer for the login to his bank account to see that he holds/controls funds sufficient to pay the amount offered? Call it coextensive transparency?
Again - to be clear - I haven't said anything about blind trust. I'm not advocating blind - you say unreasonable/irrational - trust.
What I am advocating is rational trust, i.e., IF you are going to ask to do business with me, and you are not going to trust me to act according to my word, at least offer me something more than you don't personally know me - since I've been around for awhile, I've held a law license for ~30 years, and in all the years I'm "still here" - where I likely wouldn't be - if I were a thief.
|it's not delusional, and it is unfair of you to word it that way |
Hmmm . . More unfair than, say, asserting that it is arrogance, not reason - however peculiar - that explains or dictates my behavior? :P
|Within the last year I got stung for a thousand bucks by someone I thought was trustworthy. |
Multiply that by 2.5 to get the measure my "stinging" . . err . . my unintentional, unreimbursed . . humanitarian aid.
We need to run in a better circle of friends. :P
Every con man says "Trust me!"
|You can, in fact, look me up and call me on a land line. Further, by checking my name, you can gather all manner of references, i.e., "Who is this guy? Is he on the up-and-up?" |
That is true. But note that such research imposes additional steps and additional delays on the other party, a lot more than the few additional steps that using escrow would create at your end.
|IF you're not going to trust me at least offer me something more than you don't personally know me |
That's an inappropriate expectation. Someone's preference for using escrow needs no defense.
|The only question then is "Will I deliver or am I a liar/theif?" |
That's a false dichotomy. I can think of several reasons besides thievery why delivery might be derailed.
|should I ask my buyer for the login to his bank account to see that he holds/controls funds sufficient to pay the amount offered? |
That is not the way to verify someone's resources. Login info is something a con man might ask for, though.
|I'm not advocating blind - you say unreasonable/irrational - trust. |
That is not what I said. I said it was unreasonable of you to demand trust. And I told you not to cast aspersions on someone else's rationality if they were reluctant to dispense with normal best practices.
It's a compliment when someone does trust you enough to forego escrow, but you should not construe anything negative if someone prefers to use an escrow service.
It certainly shouldn't be an issue that kills a deal!
If I require escrow and the person making the deal is truly trustworthy, then why would they have an objection to escrow, except for the reasons you raised, which when explained could be determined to be reasonable, and escrow could possibly be waived, but as a buyer who is interested in a product who may only have the cash for one purchase at a given time, personally I would probably want to ensure the deal would go legitimately without my money possibly being tied up for an extended period of time while I found recourse and tried to get it back.
If I only had the money to make the purchase once I would be taking a much higher risk by not using escrow and it would seem to be bad business to me, regardless of reputation, because if something went wrong and I called an attorney like you, the first words out of their mouth when I said, 'Can you help me out I tried to purchase a domain and the buyer did not release it and I cannot afford to pay you right now, but if you can get my money back I should be able to...' would probably, IMO, be either 'Did you think to use an escrow service?', or 'Sorry, I can't help you out without a retainer.'
Is it unreasonable for someone to demand the deal be handled in the safest way for both parties while trust is built, or is it prudent?
Personally, I've always thought of trust as something earned from others on an individual basis, and haven't thought I should expect everyone to trust me simply because I've earned the trust of others previously...
|Every con man says "Trust me!" |
How fluidly you move from asserting false dichotomies to employing hasty generalizations: since con men play the "confidence" (trust me) game therefore the man who says "I don't do business with people who don't trust me" is suspect for being a con man. What a wonderful bit of logic. Gropes for list of names of logical fallacies
"Demand(ing) trust" has been your version for framing the issue. I don't demand trust. I give people who approach me asking to do business the option: trust me or, if not, play it safe and hold onto your money.
No big deal. It's just some recent stressing about sending me money has lead me to question just what does it take for someone to trust another when it comes to money.
What would it take for you to forego requiring escrow?
TMScientist: I get your version of escrow as "economic insurance". Again, I'm not saying escrow doesn't have a place in commerce. But fear based behavior has how many millions needlessly insuring their "credit"?
Every fear has a solution - one that costs money - right? "It could happen to YOU!", right? Talk about confidence men. <0>..<0>
I'm not certain I'm 100% with "trust being earned". A VAST swath of human interaction is built upon implicit trust, even trust with our lives as we travel within a few feet of one another on the interstate highways.
However, when it comes to money there may be something more going on in the human psyche. It's amazing just how much unspoken trust glues a society together . . but then we get crazy about money. What's that about?
So, really, how often do you "send money" without the assurance of escrow?
|I'm not certain I'm 100% with "trust being earned". |
How about, when there is an opportunity it seems to be a better decision to make informed, individual decisions?
|A VAST swath of human interaction is built upon implicit trust, even trust with our lives as we travel within a few feet of one another on the interstate highways. |
True enough, but just because I trust you to stay in your lane doesn't mean I should let you be my kids baby sitter, or give you the details about my banking information, does it?
|It's amazing just how much unspoken trust glues a society together . . but then we get crazy about money. What's that about? |
Maybe it's not only about money, but about the equality of the risk?
If you drive into my lane there is relative equality of risk, because you put yourself at a relatively equal risk of injury as others, but when there is only the possibility of immediate injury in one direction, people seem to take more liberties with the situation, hence the need for trust to be built (earned) by one or more of the parties involved.
I have a much greater trust in your ability to stay out of the other lane, because you put yourself at immediate risk by crossing over, than for any other reason... IOW: I implicitly trust much more when there is an equal risk for the other party involved than I do when the immediate risk is weighted in a non-favorable direction, meaning there is little immediate risk for the other person, yet I'm taking one.
Of course the whole money question gets really interesting when you realize the entire world (basically) uses fiat currency, but that's another discussion for another place... LOL.
[edited by: TheMadScientist at 4:56 am (utc) on Apr 10, 2010]
While we're busy resolving the issue of interpersonal trust I'd ask everyone to read a sample "escrow service providers" terms and condtions of use [escrow.com].
Now that you've read it do you "trust" that the escrow service provider guarantees payment to the domain transferor - even if, upon transfer, it's learned that payment was made in such a manner that it was/is reversed/reversible? Even if the funds weren't, in fact, yet received but someone by "simple neglect" (not "gross negligence") issued a system change saying "transfer the domain"?
|. . shall not be liable for any error in judgment, for any act taken or not taken, or for any mistake of fact or law, except for gross negligence or willful misconduct . . |
Hmmmm . . . That's why I love big company TCUs. They're like warm fuzzy blankets to wrap yourself in so you can sleep well at night.
|They're like warm fuzzy blankets to wrap yourself in so you can sleep well at night. |
LOL... I thought that's what news and 'investigative' reports are, because the second a company like escrow.com loses their reputation as 'trustworthy', for whatever reason, is the second their business starts to devalue regardless of their terms of service.
I don't trust them at all because of their terms of service, I trust them because reputation management is everything in the business they're in and a big stink could easily cost them more than correcting a mistake, even if they can't be touched legally for the error...
It's the whole risk v reward thing.
They are at much greater risk by not correcting a legitimate error and having a disgruntled customer call the newspaper than they are by correcting the error regardless of their terms of service, aren't they?
Can you imagine how much their business would be at risk from a single, rightly disgruntled customer calling the local news and telling their story than they are by just correcting the error?
Is it a greater risk for them to be wrong and stick to their Terms and make or save a buck on one transaction, or for reports to be called in and risk their reputation in the industry? I think they would correct the error before risking their reputation, but maybe I'm mistaken...
Great discussion by the way!
|haven't thought I should expect everyone to trust me simply because I've earned the trust of others previously... |
|is suspect for being a con man |
So far you have said very little that isn't the same as what a con man would say.
|trust me or, if not, play it safe and hold onto your money. |
That IS demanding trust!
You're doing it again, painting the situation as "either/or" when other possibilities exist.
The whole point of escrow is that it enables people to do business together regardless of whether they know each other well enough for trust to have developed.
Escrow saves time and reduces both stress and risk, especially for the person who takes the first step .... which again I note, was not you.
I have both bought and sold domains in recent weeks using escrow services, and while the steps were indeed spread out over a few days I doubt if the actual work time that it took to complete them added up to more than ten minutes.
You said you didn't like the delays created by the escrow process ... well killing the deal because you didn't like escrow would delay payment a lot longer...
The largest domain purchase I've made personally in which we didn't use escrow was around four thousand dollars. That was about four years ago and I don't remember exactly why I was confident enough to send him the money first, but I was. It was a person I had never talked to until I called him about the domain I wanted to purchase.
Here's Bucky's rule of thumb: The person who wants to dispense with escrow should be willing to assume the risk of making the first move.
Interesting discussion. Generally, I've always used an escrow service to manage domain sales primarily because these same services also often list and promote the domains for sale. However, recently I took a leap of faith and sold a domain with content for ~$50k and didn't use an escrow service. In fact, the subject wasn't even brought up. The transaction went through much faster and smoother than it would have if an escrow service had been used and there were no service interruptions to the domain's hosting.
I agree with Webwork that thieves are the exception and not the rule. We've all been in this field for a long time and the majority of us can sniff out a scam or distrustful individual when we run across one. Successful transactions conducted with a healthy reliance on trust only strengthen reputations and help to create strong professional relationships that could prove profitable or useful in future transactions.
Trust, only extended "upon demand", is no more trust than love or obediance that is commanded is love or respect. If anyone experiences "a demand" it surely isn't mine in the making. I say "Please hold onto your distrust and your money. I need neither."
Perhaps letting go of one's distrust comes hard for some, but if distrust "is there" I cannot agree that it is a) anything of my making; and, b) as such, that I must legitimize it in any way - such as assenting to escrowing funds in a transaction I did not solicit.
Of course I'm free to validate another's fears or concerns: "Oh, yes, escrow is always a good idea", but that's a choice and, frankly, I'm beginning to doubt the "logical insinuation of distrust" into any/every business transaction. I'm ready to say "You distrust me? What evidence can you offer to justify the insult to my character? None? Then go away."
I'd really like to know: What does it take to trust someone with your money in a business transaction? A contract?
As an attorney I've long held that contracts are only as good as the depth of the good faith intentions and full disclosure of the parties. I see long-winded contracts as both offering the appearance of "more protection" and the opportunity for more escape clauses, subjects of debate, etc. An "enforceable contract" giving peace of mind? Sure, until your other party files for bankruptcy or is placed in receivorship or is judgment proof or . . . Still, there's plenty of room for, use of and value to be found in contracting. So we do it, if for no other reason than to bring clarity to the minds of all parties. But not any depth of good faith where it is otherwise absent or lacking.
But that's another dimension.
Basically, what I'm asking is what does it take for you to "just trust another" in a business transaction? To have that sense that even if things go badly or wrong for whatever reason that the person you are dealing with can be counted on for honesty, fairness, reasonableness?
What do you have to know or experience for a handshake or a wo/man's word to be good enough to launch/seal a deal?
After an initial escrow deal I ended up sending tens of thousands of dollars to Yun Ye, a man of mystery whom I never met and didn't quite know how to reach personally (and if I knew it was still "good luck dealing with the courts somewhere in Asia) - I sent the man money without escrow or contract simply because I concluded that a man of his level of business success and savvy no doubt valued his reputation more than my lousy few bucks. He didn't need to "steal my money". He was already printing it.
Rational? Would you have done so yourself? Why or why not?
When do you just go with trust?
|. . a healthy reliance on trust only strengthen reputations and help to create strong professional relationships that could prove profitable or useful in future transactions. |
+1 for that insight/experience. Isn't it a thing of beauty to know someone/anyone who you know will put your interest OR an interest in "doing things rightly" about self-interst, profiting one's self, etc.?
Webwork, you ask for trust.
Would you trust an unknown party...
enough to transfer the domain before being paid?
If not, why?
You want them to trust you. Shouldn't you be willing to show you trust them first?
|Would you trust the an unknown party... |
ken_b - Re-read the thread. I specifically stated that I'm not advocating blind trust, i.e., entrusting an unknown.
And, yes, I don't do it often but I have transferred domains prior to receiving payment and, in one case, it was for no triffling sum. ($$,$$$) Again, it took an assessment on my part that I was dealing with another who placed a high value on their word. There was room for things to go wrong, but isn't there always? My judgment was that the person I dealing with would not accept an outcome where the domain remained transferred without payment. No, he didn't own nor was he an E-office in the organization. Just someone who, when I asked "If payment isn't delivered will you transfer the domain back" the answer - spoken without hesitation or contrivance - was "You have my word on that."
What did it take to engender that level of trust in a person with whom I previously had no contact? A little bit on onlike reputation checking and about a 3-5 minute phone call.
What does it take for you to trust someone with your money and nothing other than that person's word? What do you need to experience in order to choose trust, choose to trust?
I'm not suggesting there's one right answer or one right approach, or even that this IS the right approach for anyone (but me, for however long) - though I do much favor a more explicitly trusting and trustworthy world. ;)
Acknowledging that there are thieves in the world, should that fact color or shape or dictate our relationship with everyone else when 99.5+% of people in this world will very highly probably not act as thieves when sent money?
When, why or with whom . . can you and you or you forego escrow? :)
I will cheerfully forego escrow if the other person is willing to take that first step of trust and the risk it entails.
As for me being the one to take the risk of that first step, it would require a price point that was within my risk tolerance and available resources, combined with personal trust and confidence.
I couldn't tell you where personal trust and confidence comes from. Sometimes it happens almost instantly; other times it takes years to grow. Sometimes it is misplaced, and that is painful.
|I don't do it often but I have transferred domains prior to receiving payment |
If you believe your own rhetoric, you should be doing that half the time. You take the first step half the time, and half the time the other goes first.
I still say a savvy business person would not kill an otherwise satisfactory deal because of notions about not liking escrow. Trying to squeeze other people into your mold might an amusing personal crusade, but that's all. A savvy business person would focus on getting the deal done, and would not set up barriers based on pure caprice ... which is what this is, since you're not applying your own logic to yourself with consistency.
|What evidence can you offer to justify the insult to my character? |
Webwork, you need better lines. Taking umbrage about a perceived slight to your character is straight from the con man's play book. Making someone feel bad about normal prudence is indistinguishable from what a con man would say.
Someone's preference for using escrow should be respected as normal business prudence, and should be construed as neutral, not twisted into something negative.
Consider it a positive when there's enough trust in the situation that the parties are comfortable to close the deal without using escrow. But for heaven's sake do not twist someone's preference for using escrow into something negative and insulting. That is the wrong way to think, wrong on several levels.
I can't tell you what creates trust, but some sure ways to kill it are conjuring up ugliness when none was intended, and refusing to accept other people as they are and work with them as they are.
|man in poland|
Buckworks - I am totally with you on this one. I have done deals with and without using escrow, but I would never take it as a slight to my character if the other party insisted on escrow to transact. Quite the opposite in fact - it indicates to me a professional, business-like attitude which engenders respect.
I also re-iterate your point about the level of risk involved. For one person, the possibility of never receiving a domain for a blind payment of $$,$$$ could mean little. For another, it could mean bankruptcy.
When I transact, I am not looking to become the other party's best friend by showing how much I trust them with my money/domain. I am simply looking to transact safely and courteously. Escrow, in my opinion, provides this. The 'trust each other and we'll see what happens' approach does not.
In this thread I'm specifically talking person-to-person transactions and not multi-party large entity deals where the risk of miscommunication/misunderstanding and other risk variables escalate in number and potential consequence.
Distrust, so totally insinuated into inter-human, person-to-person business relations that it is so normal to seek protections that ordinarily only ought to attach where "the other is not to be trusted", suggests to me that something is amuck.
It is thought normal / correct / right minded . . not to trust "the other" when it comes to inter-personal business . . money. As a consequence we now "insure against thievery", i.e., we endorse escrow. It's almost a matter of routine, as IF the current formula for doing business is "distrust . . everyone".
What does that make or make of the business climate? Yet, where's the proof? Or are we just suckers for the whole insurance industry thing: We insure our house, car, health, life, disability, credit score, we warranty, extend our warranty, . . . all to the profit of those who would insinuate, evoke, stimulate fear.
Again, to be specific, I am NOT arguing for blind "just send the money/domain" trust.
But I am certainly arguing against blind distrust.
|If you believe your own rhetoric, you should be doing that half the time. You take the first step half the time, and half the time the other goes first. |
That's rote math, an equation without the reflection. That's exactly what I'm suggesting is . . problematic, with reflexive distrust/escrow.
That said, I am open to applying certain factors or a certain analysis somewhat as a matter of rote/routine.
For example, where I'm the person soliciting the deal (inquiring about buying someone's domains) I am entirely likely to not ask for escrow, particularly when I'm able to identify (more than just "a name") the person I'm seeking to do business with. It borders rote/routine for me to suggest that if you initiate the dealmaking then you go first (send money/send domain) but, in a sense, it presupposes a decision on the part of the initiator to trust the person they have voluntarily chosen/elected/offered do business with.
It falls back on the idea/notion of "why choose, in the first place, to do busines with someone you distrust".
|the level of risk involved |
The "escrow-as-insurance" analogy (sentiment?) is patent, but PLEASE take a careful look at any/every escrow service's terms of service. Escrow IS NOT insurance. Escrow is a service and that service provides procedural safeguards, not insurance nor a guarantee that if you deliver the goods the escrow service will deliver the money. There are exceptions.
QUESTION: Of those deals where you agreed to employ an escrow service what percent of the time did the person not pay? Do you infer that they paid because of escrow or do you infer that the vast majority of people whom you choose to do business with simply are honest, decent people?
FWIW, there have been and likely will be occassions where I would even refuse a deal where escrow would be suggested . . by someone whom, for whatever reason, I simply would choose to avoid doing business with.
And, can escrow go bad?
Anyone know of transactions, funded by stolen credit card information, that initially went through only to be reversed when the real cardholder discovered the charge on their account? Is it possible for such "illicit funding of escrow" to result in a domain transfer authorization (by escrow) where payment, post transfer, might actually be denied, and, if so, isn't that exactly the type of "I fear this . . so I escrow" situation that you thought escrow insured (it doesn't insure) against?
Anyone know the exact 100% answer to the question: Is escrow 100% immune to credit card fraud? I somewhat doubt it, but I'd like to closely question anyone who says it is 100%.
After all, aren't we escrowing because of the .005% of the people we might choose to do business with are . . crooks?
Central Question: Have we insinuated a measure of "ubiquitous reflexive automatic distrust" into interpersonal business dealings, the measure of which the facts of (actual incidents of) dishonesty do NOT support and, if so, is the cost of ubiquitous distrust more than the costs/loss occassioned by actual theivery?
If the costs of distrust exceed the actual losses occassioned by dishonesty then are we inflicting upon ourselves market inefficiencies? (Inefficiencies that certain entities would be more than happy to exploit . . err, profit from.)
Can we actually make the market more efficient by aligning our beliefs with our experience, i.e., that that vast majority of people are not theieves?
In the era of the WWW is there some chance of actually enhancing our experience of trust with many whom we have not heretofore broken bread with?
All presented in the context of the issue "when is escrow really necessary", i.e., what is the quantum of and source of trust sufficient to do business without thievery insurance?
For me, I will admit that the information available on the Web (subject to verification) has it made it MORE POSSIBLE to TRUST STRANGERS, i.e., people with whom I have not had direct contact.
And, yes, it has also made me aware (at least of reports) of cultures where corruption (bribe taking, unfulfilled promises, etc.) is rampant, i.e., reported to be the norm.
Webwork, it's wrong to keep implying that thievery is the only reason someone might wish to use escrow.
|specifically talking person-to-person transactions |
That's precisely the kind of transaction that would be totally paralyzed if something happened to you before the domain was transferred that I had paid you for.
What would the hassle and cost be for me to recover my money from your estate after you got hit by that bus ... if I could even figure out where to start?
|transactions, funded by stolen credit card information, |
FWIW, the escrow service I used most recently only accepts credit cards to fund smallish transactions. Over a certain dollar amount, the funds have to be wired.
|because of the .005% of the people we might choose to do business with are . . crooks? |
Please clarify for us where that .005% statistic comes from.
|So, in forgoing deals where a buyer insists on using an escrow service, am I acting like a loon? A bit to prissy, full of my self, high on my horse? |
I don't think so. I've had more than a handful of sales handled through Escrow, I was the seller though. And, when it comes to the purchasing of domains, I would guess the buyers are usually cautious out of the box. Even if they know you. ;)
|When or under what circumstances is escrow a necessity? When are you willing to dispense with "domain escrow"? |
I am, since I've been the Seller in all instances. But, I've had a few buyers who were insistent on using an Escrow Service. I was quick to inform the parties involved that any additional fees incurred would be at their cost, not mine. I have no problem with them using Escrow in this type of scenario.
I would think high value domains are going to be prime candidates for Escrow. But, if both parties know one another and want to bypass all the red tape, then they'll do what is best for them without someone in the middle dipping their fingers into profits.
|Is escrow fool/failure proof? I have my doubts that it's a perfect system. Anyone ever use an escrow service and get burned? |
Never got burnt but I was feeling real uncomfortable in one sale. So much so that I canceled the Escrow and told the Buyer that we needed to clear up a few things before the sale proceeded. It was a misinterpretation on my part and I reinstated the Escrow, all went as planned.
And then of course we have all the Escrow spam, and there appears to be quite a bit of it. Since I'm toting around a rather large domain portfolio, I get the canned buy requests via email. They usually contain links to 3 escrow services to use for the transaction. What? Do they think I just fell off the Turnip Truck? :)
I've seen the kind of spam email that contains three links to appraisal services, but never for escrow services. This is the first I've heard of that.
|I've seen the kind of spam email that contains three links to appraisal services, but never for escrow services. |
Ooops, my oversight. You are correct, it was for appraisal services. See what happens, the two (appraisals/escrow) are grouped together in my mind. ;)
Personally, I would use an escrow service if I bought a domain for $1. I just don't like the idea of being ripped off. I have used escrow.com a number of times and have not had any issues and would use them again (though I seriously need to stop buying any more domains for awhile).
I don't mind paying the money at all for a legitimate business expense but I wouldn't want to give any money away for free to a scammer.
I'm currently helping an organization I belong to get their domain back from a disgruntled former member and it is proving to be quite a hassle. I wouldn't want to have to go through this again with one of my own domains.
I think it's just a commercial and professional decision based on the value of the deal versus the risk and effort of fulfilment .
Fortunately, good escrow services exist as backup if you need them.
I'm just witnessing a trans border shipment [ non internet related ] that went horribly wrong. It's going to work out to be months of wrangling between lawyers in different countries to get sorted. When humans are involved with interpretation of " the word " - anything can happen.
For small transactions I wouldn't worry. But for the larger deals , make sure it's going to work and put processes in place to make sure everyone's happy.
Why not offer escrow as a standard option, but at a 10% or 15% markup on the original price? Just like businesses charge "postage and packing" or "shipping and handling" - only part of the cost of escrow is the escrow service's fee itself, but there is legitimately a lot more work involved (administratively) when escrow gets used.
The buyer then has a simple choice: trust you explicitly from the get-go, or pay the additional escrow admin fee and protect themselves in a way that makes them feel "safer".
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