Escrow services provider considers closure after fraud assault

Scott Esler, a member of the Trade Secure board of directors, said the first fake Web site was discovered 18 months ago when one of the customers called to ask whether Trade Secure was affiliated with the fake company.

An escrow transaction involves a buyer, a seller and a trusted and impartial escrow agent. The anonymous buyer and seller are able to transact securely using the escrow agent as an electronic middleman for a small fee.

Esler said the fake Web site blatantly used the company's logo and office details in Melbourne and claimed to have offices in Germany and Los Angeles. Since then, Esler said they have discovered three more fake Web sites using Trade Secure logo and details.

Trade Secure is the escrow services company recommended by auction Web site eBay Australia for purchases over AU$400. However, Esler said they have decided to cease receiving new transactions starting July.

"We decided to temporarily stop new transactions until our remaining transactions run out. We are also considering closing down the company because of this," Esler said.

Esler said the company was working with the Australian High Tech Crime Centre (AHTCC) to investigate the four fake Web sites as well as other ones claiming to be affiliated with Trade Secure. So far, they have managed to deregister two domain names, with one register details traced to London.

However, Esler believes the effort is futile since "at the end of the day, the deregistered Web sites will only transfer their details and registration to someone else or move to another host and start scamming customers again."

Esler said the company has not suffered financially because of the fake Web sites, however, they have not decided whether it is worth pursuing the company after the scam. Esler said they have notified eBay of the problem and the possibility they will be closing the company.

As of press time, ZDNet Australia  had not received eBay's reply on the issue.