Editing Escrow (section)

===Internet escrow===
Internet escrow has existed since the beginning of Internet auctions and commerce. It was one of the many developments that allowed trust to be established in the online sphere.<ref>{{cite web |title=eBay Community : Letter |url=http://pages.ebay.com/community/letter.html |archive-url=https://web.archive.org/web/20050208180627/http://pages.ebay.com/community/letter.html |archive-date=Feb 8, 2005 |access-date= |website=[[EBay]]}}</ref>

As with traditional escrow, Internet escrow works by placing money in the control of an independent and licensed third party in order to protect both the buyer and seller in a transaction. When both parties verify the transaction has been completed per terms set, the money is released. If at any point there is a dispute between the parties in the transaction, the process moves along to dispute resolution. The outcome of the dispute resolution process will decide what happens to money in escrow. With the growth of both business and individual commerce on the web, traditional escrow companies have been supplanted by new technologies.

In the US, the [[California Department of Business Oversight]] enacted Internet escrow companies as a licensed class effective 1 July 2001.<ref>{{Cite web|url=https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FIN&sectionNum=17003.|title=California Financial Code, Division 6 Escrow Agents, Chapter 1, Section 17003|website=California Legislative Information|access-date=14 July 2016}}</ref> The first Internet escrow company to be licensed was [[Escrow.com]],<ref>{{Cite web|url=http://www.dbo.ca.gov/Consumers/finance/pdf/qa.pdf|title=California Department of Corporations Online Escrow Fraud Questions & Answers|website=California Department of Business Oversight|publisher=California Department of Corporations|access-date=14 July 2016|url-status=dead|archive-url=https://web.archive.org/web/20160921101945/http://www.dbo.ca.gov/Consumers/finance/pdf/qa.pdf|archive-date=21 September 2016}}</ref> founded by [[Fidelity National Financial]] in 1999.<ref>{{Cite news|url=http://www.thefreelibrary.com/Fidelity+National+Financial,+Inc.+to+Offer+Internet+Escrow+Services...-a056325638|title=Fidelity National Financial, Inc. to Offer Internet Escrow Services Through Escrow.com.|work=PR Newswire Association LLC|access-date=14 July 2016|via=The Free Library|archive-date=5 March 2016|archive-url=https://web.archive.org/web/20160305110519/http://www.thefreelibrary.com/Fidelity+National+Financial,+Inc.+to+Offer+Internet+Escrow+Services...-a056325638|url-status=dead}}</ref>

In the [[European Union]], the [[Payment Services Directive]], which commenced on 1 November 2009, has for the first time allowed the introduction of very low-cost Internet escrow services that are properly licensed and government-regulated. The regulatory framework in the EU allows these web-based escrow services, which operate along the lines of expensive [[letter of credit]] service run by banks for international buyers and sellers but at a cost in cents rather than thousands of Euros, the ability to enhance security in commercial transactions.<ref>{{cite web|url=http://ec.europa.eu/internal_market/payments/framework/index_en.htm|title=Directive on Payment Services (PSD)|url-status=dead|archive-url=https://web.archive.org/web/20141105011542/http://ec.europa.eu/internal_market/payments/framework/index_en.htm|archive-date=2014-11-05}}</ref>

[[Bogus escrow]] methods have been employed online. In an effort to persuade a wary Internet auction participant, the perpetrator will propose the use of a third-party escrow service. The victim is unaware that the perpetrator has actually created an escrow site that closely resembles a legitimate escrow service. The victim sends payment to the fraudulent escrow company and ends up receiving nothing in return. Alternatively, a victim may send merchandise to the subject and waits for his/her payment through the escrow site, which is never received because it is illegitimate.<ref>{{cite web|url=http://www.ic3.gov/crimeschemes.aspx|title=Internet Crime Complaint Center (IC3) - Internet Crime Schemes|website=www.ic3.gov|access-date=2010-06-24|archive-date=2012-03-06|archive-url=https://web.archive.org/web/20120306074019/http://www.ic3.gov/crimeschemes.aspx|url-status=dead}}</ref> Genuine online escrow companies will be listed on a government register, and users are generally advised not to use an online escrow service without first verifying that it is genuine by independently viewing a government on-line register. Currently, the US Federal Government does not offer a license for online escrow services. However, certain states offer their own license for online escrow services; such as the California Department of Business<ref>{{Cite web|url=http://www.dbo.ca.gov/Consumers/finance/OnlineEscrow_FAQs.asp#1|title=California Department of Business|access-date=2014-06-09|archive-date=2014-07-14|archive-url=https://web.archive.org/web/20140714202232/http://www.dbo.ca.gov/Consumers/finance/OnlineEscrow_FAQs.asp#1|url-status=dead}}</ref> and the Arizona Department of Financial Institutions.<ref>{{Cite web|url=https://dfi.az.gov/home?list=EA&name=Escro%20Agents|title=Home &#124; Arizona Department of Financial Institutions|website=dfi.az.gov}}</ref>