Posted By:
warshawlawThey are a total scam and create massive fraud. I know of one collector who got scammed out of a very rare and expensive card by an English con artist who set up a fake escrow and got the card shipped out with (suprise) no money there.
Real escrow agents are state-licensed and regulated, and insured by their states against theft or forced to post bonds. Their bona fides can be checked independently through their state regulatory agencies. If the seller thinks escrow is really necessary, insist upon the use of an actual licensed escrow agent in your state, and give the seller information to independently contact and verify the escrow holder's credentials.
Another route to go for a big ticket item is to hire an attorney in the area where the seller is located to act as intermediary. Attorneys have client trust accounts that can be used to clear transactional funds (I do it all the time in handling litigation settlements) and also are bound by law to follow through with deals on both ends once the parties sign instructions. It should cost about the same as an escrow would. Attorneys typically are required to financially obligate themselves to some portion of client claims (here in CA it is $50,000) or have insurance, and can also be checked out independently with the state bar.