The use of the term "escrow" carries additional obligations and consumer protection in certain jurisdictions. Some domain marketplaces are now quietly distancing themselves from the term "escrow" and calling it a (secure) "transfer service". Sedo
as well. So no: escrow is not always involved.
Let's reference the actual definition of the word "Escrow" in the
dictionary. It say's...
1. a deed, a bond, money, or a piece of property held in trust by a third party to be turned over to the grantee only upon fulfillment of a condition
2. a fund or deposit designed to serve as an escrow
To me personally, this means whether you call it "Escrow" or "Secure Transfer Service" or anything else - it is essentially
Escrow and it is indeed involved, no matter what they call it. The funds are sent to a third party who holds it and turns that money over once the domain transfer has been fulfilled. So, I would actually say the answer is
YES, Escrow is
ALWAYS involved with Sedo, Afternic and DAN. Whether it's a bank, investing firm or domain marketplace - the money is held by a third party and then released when all obligations are met. It's an escrow service no matter what the place wants to call it. Escrow is not a company - it's an actual word and it's used for many different things, from buying a house to buying a domain name.
Banks and other investing firms may have to submit paperwork or follow certain guidelines to handle/hold the money, and domain marketplaces might need to do the same (I don't know these rules because I'm not a banker). Some domains sell for the same price as a house, so in my opinion they should have to follow the same rules and guidelines. However, it also isn't that simple because many domain sales utilize Escrow but sell for hundreds of thousands less than a house would. Some of these marketplaces might be backing off from using the term because maybe some of what the banks need to follow in order to officially use the term "Escrow" is starting to make its way into the domain industry (I'm not sure and honestly have no idea)..but, whatever you (or they) want to call it, by definition it's Escrow.
Other companies have tried to operate in a grey areas by doing stuff like that in other industries (Offer something that is clearly defined, but then try to call it something else and think now you can get away without having to file the proper paperwork or follow the specific guidelines because you aren't calling it by it's definition) and that tends not to work out so well. You could probably find examples of this in many ponzi schemes, or even with something like the JUUL e-cig lawsuits.. They made commercials for years that blatantly targeted the youth. Sure, they would sit there all day and tell you their commercials weren't made for that purpose, but don't think the public doesn't know what you're trying to do. Those commercials cost that company over $460 million in lawsuits. They went to court and probably sat there trying to tell the judge their commercials weren't made to target younger adults, but everyone saw right through that. Maybe it's not the best example, but my point is that if a company offers what is clearly defined as "Escrow" and wants to call it something else
for the purpose of getting around any yellow tape that's involved with being able to officially call yourself an Escrow service, then they might be in for some trouble. If I decide to start selling drugs tomorrow (which I'm not and would never advise anyone to do), but I call it "fun powder" instead because that's what I "classify" it as, do you think the cops are going to let me go when they find them?