An Ancient Solution To The Question Of Online Trust
from the king's-bail dept
For years, people have been debating how do you build trust into online transactions. With all the stories of fraud and scams, some are worried that without a viable trust metric, people will start to abandon e-commerce. Now, a computer consultant (who apparently was a driving force in hyping up the whole Y2K thing) is suggesting a system based on the "king's bail" method of doing deals in ancient times. In order to seal a deal and prove that you were trustworthy, a king would send along a hostage, often a close relative (sometimes for marriage into the group). If one side failed to live up to the terms of the deal, then it could mean death for the relative. While it's tough to re-implement that system exactly online, this guy is pushing to use money as a replacement. For each transaction you do, both sides would send a large amount of money to an independent third party. The amount should be greater than is being exchanged in the transaction itself. Then, if the deal is completed to the satisfaction of both parties, the money is returned. If not, then, the money is given away to charity. This way, both sides have much more incentive to deal honestly. Those who are running a scam won't even bother to use such a system. It certainly sounds interesting, but I wonder how many people would actually go for such a system. It adds a different element of risk, and a much bigger mental hurdle to the transaction. So, while it may take away the risk of being scammed, I can see many people not wanting to "risk" extra money. Meanwhile, if this becomes popular, how fast will scammers start using such a system to their own advantage? Already we have scammers who have set up their own "escrow" systems. I'm sure they'd love to do the same thing for this - and then have the "charity" the money gets donated to be themselves.
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Useless
If you cannot buy an item in person from the seller then the only safe way to buy high-priced items from individuals is to use an escrow service, and the only escrow service you should use is escrow.com. Scammers often set up their own fake escrow sites that look just like escrow.com. How did I learn about this? I once bought a laptop on e-Bay, and the seller (who said he was in Alabama) suggested using escrow. He set up an account and when I contacted the escrow site they asked me to wire the money to a bank... in Latvia. End of sale. I suggested to the seller that we use escrow.com instead and never heard from him again.
Check out the escrow and insurance discussion board at eBay for a fascinating look at the ways people are being scammed.
http://forums.ebay.com/db2/forum.jsp?forum=23
There was a guy who kept track of all of the fake escrow sites and posted messages there, but eBay kicked him off because he violated their terms of service by posting URLs. It's great how eBay is so helpful in preventing fraud for their customers.
You can't even trust eBay feedback because the scammers gain control of legitimate accounts and run their scams. More eye-opening scam info can be found in the eBay Trust and Safety discussion board
http://forums.ebay.com/db2/forum.jsp?forum=107
Just for fun, here is a fake escrow site. Send money to them and it is gone forever. The company claims to have been in business since 2000, but the URL was registered last week! (See the Contact Us page.) The site looks nice, probably scraped from a legit site. The whois contact info is fake.
http://www.escrow-america.com/
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