Reviewed by the Sky Escrow team, a California DFPI-licensed escrow company serving Los Angeles County.
Last updated: August 25, 2026
Escrow scams generally fall into three patterns: fake or unlicensed “escrow” services (common in online marketplace and rental listings), wire fraud that redirects real closing funds, and spoofed websites that impersonate a real escrow company. Each relies on the same trick — borrowing the trust people place in the word “escrow” to get money sent somewhere it shouldn’t go. Knowing the pattern is usually enough to spot it before you send anything.
What Are Escrow Scams?
An escrow scam is any scheme that misuses the language, appearance, or process of legitimate escrow to get a victim to send money or personal information to a fraudster instead of a licensed, regulated third party. In a real transaction, a licensed escrow company acts as a neutral holder of funds and documents until agreed-upon conditions are met. Scammers exploit the reputation of that role without providing any of its protections.
These scams show up in real estate closings, but just as often outside of them — in car sales, apartment rentals, and online marketplace transactions where a stranger suggests using “an escrow service” that turns out not to exist.
Common Types of Escrow Scams
Most escrow-related fraud falls into one of the following categories. They can overlap — a fake website might also be used to collect a wire, for example — but each has a distinct pattern worth recognizing on its own.
Fake or Unlicensed “Escrow” Companies
This is the most common type outside of real estate, and it’s built almost entirely around the word “escrow” itself. A seller in an online marketplace, rental, or classifieds transaction (think a used car listed out of state, or an apartment advertised at a suspiciously low rent) tells the buyer to send funds to a third-party “escrow service” that will hold the money until the item or keys are handed over. The service is invented, unlicensed, or a copycat of a real company’s name, and the funds go straight to the scammer with no item, no apartment, and no way to get the money back.
In California, real escrow companies handling real estate and many other trust-fund transactions must be licensed by the Department of Financial Protection and Innovation (DFPI) under the California Escrow Law. A company that can’t produce a verifiable license — or that only exists as a payment instruction inside a chat conversation — is not performing real escrow, regardless of what it calls itself. See Verify Escrow Company License for how to check.
Wire Fraud and Closing Fund Redirection
In real estate transactions specifically, wire fraud is the most financially damaging escrow scam. Criminals monitor email accounts involved in a closing — a buyer’s, an agent’s, or sometimes an escrow company’s own inbox — watch for the closing date, then send fraudulent wiring instructions timed to arrive right before funds are due. The instructions look legitimate, often copying real letterhead and an escrow officer’s actual name, but the receiving account belongs to the scammer.
Because wire transfers are difficult or impossible to reverse once sent, this scam is especially costly — losses are frequently unrecoverable within hours. This pattern deserves its own deeper explanation; see Real Estate Wire Fraud Prevention for how these schemes are built and how to guard against them, and Verify Escrow Wire Instructions for the specific verification steps to take before any transfer.
Fake Escrow Websites Impersonating Real Companies
Some scammers build a website that closely copies a real, licensed escrow company’s name, logo, and address — sometimes even the real company’s actual license information — to look convincing to a buyer or seller who searches for it. The fake site may have a URL that’s one character off from the real domain, or use a slightly different top-level domain. Victims are directed to wire funds or upload sensitive documents through the fake site, believing they’re dealing with the legitimate company.
Always confirm you’re on a company’s actual domain by typing it in directly rather than clicking a link from an email or text message, and call the company’s published phone number to confirm any site you’re asked to use is genuinely theirs.
Red Flags That Signal an Escrow Scam
Across all three patterns above, the warning signs tend to repeat. Treat any of the following as a reason to stop and verify before sending money or documents.
- Pressure to wire funds quickly. Urgency — “send it today or the deal falls through” — is a hallmark of nearly every escrow scam, real estate or otherwise.
- No verifiable license. A legitimate California escrow company handling real estate funds is DFPI-licensed and should be checkable independently, not just by taking the company’s word for it.
- Refusal to provide a callback number, or a number that only rings back to the same contact. Real escrow companies have a published office line and staff who can confirm a file by name.
- Requests for unusual payment methods. Gift cards, cryptocurrency, or payment apps are not how licensed escrow companies collect closing funds or fees — this alone is close to a guaranteed sign of fraud.
- An address or phone number that doesn’t match what’s on the company’s actual website. Compare what you were given against the number you find by searching independently.
- Instructions that arrive only by email, with no live person available to confirm them by phone.
Why This Matters More in Los Angeles Real Estate
Los Angeles County’s high median property values make local closings an attractive target — a single successful scam can involve a much larger sum than in many other markets, which is part of why fraud attempts here are persistent. California’s Good Funds Law also shapes how legitimate funds move: escrow holders generally can’t disburse against funds, or allow a deed to record, until money has actually settled, which is part of why wire transfers and verified cashier’s checks are standard here rather than informal payment methods. A DFPI-licensed escrow company operating in Los Angeles County will always be able to confirm your file by name over the phone, using a number you looked up yourself — an unlicensed or fake operation generally can’t.
Sky Escrow’s DFPI license number is 96DBO-214073 (status: Active).
Frequently Asked Questions
What is an escrow scam?
An escrow scam is any scheme that misuses the language or appearance of legitimate escrow — a fake company, a spoofed website, or fraudulent wiring instructions — to get a victim to send money to a fraudster instead of a real, licensed third party.
How do I know if an escrow company is fake?
Check whether it can be independently verified as licensed by the California DFPI, confirm its phone number and address match what appears on its actual website, and call that number directly to confirm a real person can speak to your specific file.
Is it safe to use “escrow” for an online marketplace or rental transaction?
Be cautious. Many online marketplace and rental scams invent a fake “escrow service” with no license or real business behind it. If a stranger in an online transaction suggests using an escrow service you’ve never heard of, verify it independently before sending any money.
What should I do if I think I’m being targeted by an escrow scam?
Stop any pending payment, do not click links in the message, and call the escrow company or bank directly using a number you find independently — not one provided in the suspicious message. If money has already been sent, contact your bank’s fraud department immediately and file a report with the FBI’s Internet Crime Complaint Center.
Can escrow wire fraud happen even with a legitimate, licensed escrow company?
Yes — the escrow company itself may be legitimate, but a criminal who compromises an email account in the transaction can still send fraudulent wiring instructions that appear to come from that company. Verifying instructions by phone before wiring is what stops this, regardless of how legitimate the underlying escrow company is.
Where can I verify that an escrow company is licensed in California?
The California DFPI maintains licensing records for escrow companies operating under the California Escrow Law DFPI licensee search. See Verify Escrow Company License for step-by-step instructions.
Sky Escrow, Inc.
15760 Ventura Blvd, Suite 1050, Encino, CA 91436
Phone: (818) 712-0000 / (888) 891-0002
Email: info@skyescrow.com
Licensed by the California Department of Financial Protection and Innovation.
This article is for general informational purposes and is not legal, financial, or tax advice.
If anything about a wire request, a company’s license, or a website feels off, stop and call before you send anything — a Sky Escrow officer can confirm in minutes whether the file, instructions, or company you’re dealing with are legitimate.