How do you pay an individual you don’t know? Bank transfers are quick and easy – but come with no protection if the other side is a fraud.


There is an alternative, called escrow. It works like this:

  • Both parties agree the steps they will take for the money to be released.
  • Buyer pays the money to the escrow company.
  • Seller sends the goods.
  • Buyer accepts the goods.
  • Escrow firm pays the seller.

There are very few escrow services in the UK you should use, and, as ever, there are checks to make. First, they must be registered with the Financial Conduct Authority (FCA) as an authorised payment institution. They’re not covered by the Financial Services Compensation Scheme, so the word “authorised” is vital. It means they must safeguard your money, so you can get it back even if they go bust. Never use a “small payment institution”: they don’t have to safeguard your money.

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You can check the firm you’re thinking of using on the Financial Services Register: go to then search “register”, type in the name of the firm and look for the phrase “authorised payment institution” in its entry. Make sure the name of the firm you plan to use is exactly the same as in the register: clones are not unknown.

For complete safety, some services insist the seller videos themselves boxing up the goods and posting them, and the buyer takes a video unpacking them.

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The cost is similar to a credit card for the seller. For example, (which is registered and authorised as Anpa Forward Limited) charges two to three per cent each side for goods up to £100; over that, it’s a flat £2.99 each side, up to £10,000.

The process does introduce delay and friction into a sale. But whether you’re buying a wonderful cake online from a start-up business, or gig tickets from another fan who can’t now use them, it can add a layer of certainty for both sides.


Paul Lewis presents Money Box on Radio 4. To ask Paul a question please email and he will endeavour to answer your question via his column in Radio Times magazine.