Abstract:
A system and method for incentivizing and confirming the completion of tasks using an electronic escrow service. In one embodiment, Organizer  100  invites Invitee  200  to post escrow online to ensure a meeting occurs between the parties. The meeting is arranged by Server  300 . Invitee confirms appearance either via location broadcast or by disclosing a system-generated password to Organizer upon meeting, which Organizer SMS texts to Server. If Invitee&#39;s appearance is confirmed, the Server releases Invitee&#39;s escrow back to Invitee. If Invitee&#39;s appearance is not confirmed, the escrow is forfeited and donated to a recipient charity  500  of Invitee&#39;s choosing.

Description:
CROSS-REFERENCE TO RELATED APPLICATIONS 
       [0001]    Provisional application No. 61/302,888 filed on Feb. 9, 2010 
     
    
     FEDERALLY SPONSORED RESEARCH 
       [0002]    None 
       SEQUENCE LISTING 
       [0003]    None 
       BACKGROUND 
       [0004]    1. Field of Invention 
         [0005]    This invention relates to computerized escrow and financial transfer services, specifically to creating and/or using such a service for the purpose of incentivizing the completion of promised personal (as opposed to strictly online or financial) actions and transactions. 
         [0006]    2. Prior Art 
         [0007]    Opportunity and financial risks exist for the parties to any transaction. If two or more people agree to complete a business transaction, attend a meeting, or exchange accurate information, there is always the risk that one party may fail to follow through on their promise or obligations. This failure can result in significant costs in time and effort (opportunity costs) and money (financial costs) to the non-failing party. 
         [0008]    Such risks can be mitigated through the use of third party escrow services. Escrow is the process by which a third party (the “escrowee”) holds a deposit provided by one party to ensure compliance with contract terms by a second party. Upon receiving confirmation that a triggering event has occurred, the escrowee will carry out the terms of the escrow agreement, which usually involves the release or return of goods or funds. Note that an escrow agreement as used herein is any set of terms which direct the escrowee to deal with the security deposit in a specific manner. 
         [0009]    Escrow can be used to lessen both financial and opportunity cost risks in business transactions. As an example of lessening financial risks, in a transaction for the sale of goods, a purchaser may be asked to place the full monetary amount of the purchase price in escrow until the escrowee receives confirmation that the goods have been shipped by the seller. This use of escrow eliminates financial risk for the seller by guaranteeing that the full purchase price has been provided before shipment. For the purchaser, financial risk has been eliminated by ensuring that the deposited money will be returned to the purchaser by the escrowee, and thus no loss will be suffered, if the goods are not shipped by the seller as promised. 
         [0010]    Escrow may also be used to lower the opportunity costs of a business transaction by remunerating the parties for giving up the opportunity to transact with others. One common example is a non-refundable deposit on real estate purchases. If Bob is buying a house from Sally, Bob will usually be required to put a certain percentage of the purchase price of the house in escrow as a deposit. This deposit incentivizes Sally to withdraw the house from the market while the terms of the deal are finalized and Bob arranges financing. If the parties finalize the contract and Bob secures financing before the trigger date, then the deposit is forwarded to Sally and is subtracted from the purchase price. If the trigger date passes without the fulfillment of the required terms, the escrowee forwards the deposit to Sally as payment for her lost opportunity costs in dealing with Bob. 
         [0011]    Historically, such escrow services required the transacting parties to physically deposit cash or goods with a third party escrowee, who personally confirmed the completion of the required trigger events before carrying out the terms of the escrow agreement. However, with the emergence of the Internet and other communication networks, a number of semi-automated escrow systems have been developed to lower the costs and increase the efficiency of financial escrow services. 
         [0012]    Most of these inventions utilize the Internet and other communications networks to improve the traditional escrow process for situations in which escrow is currently used, such as the purchase of real estate. For example, U.S. patent application 2002/0087461 entitled “Technique for Electronic Funds Escrow” filed Dec. 28, 2000 by R. Ganesan, et. al. describes a method for transmitting and storing information regarding an escrow transaction electronically over the internet. U.S. Pat. No. 7,127,406 entitled “Method and Apparatus for processing Escrow Transactions”, filed Apr. 11, 2001 by C. Richard Triola, describes a system whereby parties to a real estate transaction may use the Internet to execute and store all the standard documents required to trigger the release of funds for the purchase of real estate. 
         [0013]    In other patents, the charging of a security deposit is applied to financial transactions other than real estate. In U.S. Pat. No. 7,415,425 entitled “Systems and Methods Wherein a Security Deposit Facilitates a Transaction in which a Benefit is Applied in Exchange for Performance of a Task” filed Oct. 6, 2000 by Jay S. Walker et. al. describes a network-based system in which a retail customer is incentivized to enter into a secondary financial transaction for goods or services with one or more merchants through the combination of a benefit or subsidy and a security deposit. 
         [0014]    What is common to the entire prior art is that it is generally designed for business situations in which the participants are already engaged in a financial transaction. Accordingly, they use solutions that require both parties to be engaged in the purchase and sale of goods or services, and use as a security deposit a reduction or increase in the payments or interests being already transferred between the parties. To our knowledge, no current system is optimized to use an escrowed security deposit to incentivize participants to follow through on promised non-financial activities such as appearing at meetings. 
         [0015]    For example, many people now make arrangements to meet each other over the Internet. If one party was required to place a security deposit in escrow in order to confirm the time and place of the meeting, that party would have a greater incentive to show up at the meeting. Similarly, many people are requested to provide data to other parties, the accuracy of which may only be confirmed later. If the party supplying the information was required to provide a security deposit to ensure the accuracy of the data, they would have a greater incentive to do so. 
         [0016]    The prior art would require both parties to have systems in place for the transfer of funds between them, would have no way of arranging or confirming a non-financial transaction or task, and would release the security deposit to one of the parties upon default, creating an incentive for that party to cause the other to default in order to gain the security deposit. The present invention addresses these problems by providing an optimized system and method for using a communications network to incentivize the completion of non-financial tasks through the use of security deposits. In addition to incentivizing the completion of the task itself, the present invention reduces the risk of fraud by the secondary party and allows for mobile self-confirmation of task completion in certain circumstances. 
       SUMMARY 
       [0017]    To alleviate problems inherent in the prior art, the present invention introduces a system and method for creating an escrow service that is optimized to incentivize actions by one or more parties to an event or transaction that is not necessarily monetary. This is accomplished by applying the risk-mitigation capabilities of monetary escrow to 1) the problem of incentivizing in-person meetings and other activities that involve two or more parties who are 2) self-reporting compliance with 3) transaction terms that are not necessarily monetary while 4) minimizing the risk of fraud. 
         [0018]    Various embodiments of this invention are possible. People arrange meetings for a variety of purposes (sales, sports, social events, networking, business events, charity events, etc.). Organizers of these events invest time and effort in them, and often would like Invitees to similarly feel invested. At the same time, if they are being requested to put a deposit down to ensure attendance upon meeting, invitees would like to know that the Organizer does not have an incentive to cause the Invitee to default (i.e. miss the meeting) in order to receive the Invitee&#39;s security deposit. 
         [0019]    One embodiment of the invention allows one person (the Organizer) to incentivize one or more other people (the Invitee(s)) to appear at a meeting in person by requiring the Invitee(s) to place funds in escrow until Invitee&#39;s appearance is confirmed. If the Invitee&#39;s appearance at the meeting is confirmed then the escrowed funds are returned to the Invitee. If the Invitee fails to appear then the escrowed funds are donated to charity. 
         [0020]    In this embodiment, Organizer sets up the meeting using a server over the Internet, sets an amount for the security deposit, and invites Invitee to the event. Invitee enters their credit card or bank information and nominates a third party to receive the escrow as a penalty or donation in the event that Invitee does not appear at the meeting location on time. The system places a hold on the escrow amount in Invitee&#39;s account or credit card. If Invitee has a location broadcast-enabled device (such as GPS, cell triangulation, etc.), Invitee confirms appearance by effectuating a location broadcast from the relevant coordinates within the transmission confirmation time window. If Invitee does not have a location broadcast-enabled device, the system issues one party a transaction password. Note that “password” as used herein includes any unique identifier which may be suitable for confirmation purposes, including an alphanumeric string, an image, a tone or sound, a light-based data transmission, and a barcode or other optical machine-readable data mark. Upon meeting the other party, the first party discloses the password to the second party, who transmits the password from their pre-registered mobile device within the transmission confirmation time window. Upon receipt of the password or location confirmation, the server releases the hold on Invitee&#39;s account. If the deadline passes without confirmation, the server charges Invitee&#39;s account on behalf of the nominated recipient. 
         [0021]    Accordingly, several objects and advantages of the invention are evident: to provide a method of using an escrowed security deposit to incentivize personal appearances and other non-monetary transactions; to provide an improved, automated escrow system; to provide a means for self-confirming escrow triggers; to provide a means of mobile and instantaneous deposit and release of escrow funds; to provide a means of raising money for nominated parties; to minimize the incentive for fraud. Still further objects and advantages will become apparent from a study of the following description and accompanying drawings. 
     
    
     
       DRAWINGS 
         [0022]      FIG. 1  is a flowchart overview of one embodiment of the escrow-based meeting incentive system. 
           [0023]      FIG. 1A  is an example of a meeting Organizer&#39;s data entry page of  FIG. 1 . 
           [0024]      FIG. 1B  is an example of a meeting Invitee&#39;s data entry page of  FIG. 1 . 
           [0025]      FIG. 1C  is an example of the confirmation screens and SMS messages of  FIG. 1  prior to the meeting. 
           [0026]      FIG. 1D  is an example of the SMS messages of  FIG. 1  sent to Invitee after the meeting deadline expires. 
           [0027]      FIG. 2  is an overview of the embodiment&#39;s data entry and organization carried out by the server. 
           [0028]      FIG. 3  is a flowchart of the  FIG. 1  and  FIG. 2  embodiment&#39;s transaction decision model. 
           [0029]      FIG. 4  is an overview of an alternate embodiment of the invention. 
       
    
    
     DETAILED DESCRIPTION 
       [0030]      FIG. 1  is a flowchart overview of one embodiment of the invention that incentivizes one or more Invitees  200  to attend one or more meetings set by Organizer  100 . Organizer submits data  10  across a communications network to a Server  300 . 
         [0031]    As detailed in  FIG. 1A , the following are representative data inputs that may be entered by Organizer: name  104 , mobile device number  10 B, cell device type  10 C, proposed meeting date  10 D, proposed meeting time details  10 E, proposed meeting location  10 F, escrowed security deposit amount  10 G, Invitee name and contact information  10 H &amp;  10 J and payment details  10 K. Note that as used herein, “escrow” and “security deposit” means anything of value which is placed in escrow to incentivize performance. For example, the Invitee may provide the security deposit via a credit card account, a debit card account, a checking account, a mobile banking account and/or an electronic payment protocol. In a preferred embodiment, Organizer may choose  10 L whether to offer Invitee the chance to make the incentive bilateral. Organizer completes an electronic contract  10 M agreeing to meet Invitee at the stated time and place, and authorizing an account charge for the meeting setup fee. Organizer then sees the “Organizer Confirm Screen” ( FIG. 1C ). 
         [0032]    Returning to  FIG. 1 , Server  300  sends an invitation to Invitee  200  to enter the data  12  detailed in  FIG. 1B . Invitee receives the invitation itself  12 A, and may be asked to provide matching data  12 B- 12 D as that provided by Organizer Invitee may also be asked to choose a charity  12 E to receive the security deposit in case of default. A “charity” as used herein can be any third party designated to receive the security deposit upon default. Invitee executes an electronic agreement  12 G. Invitee may be offered the option to set up a “safety email”  12 H. A safety email includes any notification system including email, SMS, recorded telephone message or other similar method that informs a third party of the whereabouts of the sender at a specific time and provides other information as desired. 
         [0033]    Returning to  FIG. 1 , once Organizer and Invitee&#39;s account information is entered, Server confirms  14 A the validity of the account with bank or credit card processor  400 . Once confirmed, server retains the escrow amount by, for example, placing a hold or “auth”  14 B on Invitee&#39;s account. Server charges Organizer the meeting setup fee  14 C. If required, unique transaction password  600  is generated and sent  16  to Invitee and a meeting confirmation  18  is sent to Organizer, potentially via SMS or email (see  FIG. 1C ). Note that the password may be provided to either party for release to the other, depending on the perceived balance of risk between the parties. 
         [0034]    Assuming that the parties meet as intended, Invitee either broadcasts their position via location broadcast  22 B or password is disclosed  20 A by Invitee to Organizer. Organizer transmits the password, potentially via SMS  22  to Server. Note that the password confirmation may be by any communications device, including a telephone, internet-connected computer, wireless transmission or similar services. Server instructs  24 A the account processor to release the hold on the Invitee&#39;s account or  24 B to charge the Invitee on behalf of the charity  500 . The funds are passed  26 B to the charity. A final summary of the transaction is sent to both parties  28  (see  FIG. 1D ). 
         [0035]      FIG. 2  is a detail of the data organization carried out by Server. Server reviews the data from Organizer input page  30  and Invitee input page  32 . Server matches the data inputs to set meeting requirements and build a decision model  34  for escrow release or loss. Information regarding account numbers and meeting and payment agreements are matched  36  to create a legal contract authorizing Server to charge both parties&#39; accounts if necessary. 
         [0036]      FIG. 3  is an example of a decision model followed by Server in determining whether a meeting and associated release requirement set has been created, and whether to return Invitee&#39;s escrow or release it to the nominated charity. 
         [0037]      FIG. 4  is an alternate embodiment of the invention optimized for the confirmation of data rather than incentivizing personal meetings. 
       Operation 
       [0038]    The operation of a preferred embodiment of the system ( FIG. 1 ) begins with Organizer  100  deciding to meet in person with one or more Invitees  200 . Organizer begins the process, for example by logging onto a website connected to a Server  300 . Organizer registers with the site and provides personal information (see  FIG. 1A ,  10 A- 10 C). Organizer enters all data relevant to the meeting itself ( 10 D- 10 F). Organizer may choose an incentive amount  10 G that each Invitee will have to place in escrow in order to confirm Invitee&#39;s attendance at the meeting. A variety of escrow amounts may be suggested, each with an associated meeting setup fee. Organizer may also choose a custom escrow amount, which could generate a custom setup fee based upon a percentage of the escrow. As a way to encourage Invitee&#39;s acceptance and participation, Organizer may choose to give Invitee the opportunity  10 L to become the Organizer in a minor transaction, in effect requiring Organizer to similarly post an security deposit to ensure Organizer&#39;s appearance at the meeting. Finally, Organizer agrees  10 M to meet Invitee if the invitation requirements are accepted and to be legally bound to pay the meeting setup fee. Server confirms the validity of Organizer&#39;s account information  14 A with an outside entity such as a bank or credit card processor  400 . 
         [0039]    Server then runs an internal operation and creates a meeting invitation based upon Organizer&#39;s inputs and transmits it  12  to Invitee. The internal operation may be stored in a compressed, uncompiled and/or encrypted format. The internal operation furthermore includes program elements that may be necessary, such as an operating system, a database management system and “device drivers” used by the Server to interface with peripheral devices. Appropriate program elements are known to those skilled in the art. 
         [0040]    If Invitee agrees to accept the invitation  12 A, Invitee may be asked to similarly register with the site and provides personal information  12 B- 12 D. A description of the release trigger will be provided to Invitee. Note that release triggers may be any event or task agreed to by the parties, including appearing at a specified location and time or the confirmation of data&#39;s accuracy. Invitee may be given the opportunity to accept or reject the proposed security deposit amount, or to reply with Invitee&#39;s own suggested amount. Invitee then chooses  12 E a charity to receive the incentive amount in the event that Invitee fails to execute the release trigger. Server confirms the validity of Invitee&#39;s account information  14 A, and then places a hold or “auth” on Invitee&#39;s account  14 B. An “auth” is a term of art describing a funds check performed by a credit card processor against a credit card prior charging said card. 
         [0041]    Part of the information provided by Invitee is mobile device type  12 D. If Invitee&#39;s mobile device is location broadcast enabled, Server may set up a decision model ( FIG. 2  &amp;  FIG. 3 ) that provides for location broadcast confirmation of Invitee&#39;s location. (Because location data is determined by latitude and longitude coordinates, any online mapping application, including those offered by Google or Yahoo Maps, may be used to collect and translate street address data into coordinates when Organizer enters the meeting location  10 F.) 
         [0042]    If Invitee&#39;s mobile device is not location broadcast enabled, Server may generate a random transaction password  600 . Server transmits a password to Invitee along with a confirmation of all meeting details. A confirmation of all the meeting details (without the password) may also be transmitted  18  to Organizer ( FIG. 1C ). 
         [0043]    The meeting is now set, and the Invitee has an incentive in the amount of the escrowed security deposit to appear as promised. (If Invitee was offered and chooses to accept the offer make the escrow bilateral, then a matching process is carried out including all steps previously described in which Invitee is Organizer and Organizer is Invitee, creating an incentive for both parties to appear). 
         [0044]    If Invitee appears at the meeting location at the correct time, Invitee may confirm their appearance, in this example by using either the location broadcast or the password transfer protocol, as appropriate. In the location broadcast protocol, Invitee simply engages the location broadcast function on their device. Server receives the location broadcast and confirms location and time  20 B. In the password protocol, Invitee may disclose  20 A the transaction password to Organizer. Organizer provides the password, by SMS or other means  22  to Server from Organizer&#39;s registered device or location  10 B, confirming the meeting between the parties. 
         [0045]    If confirmation is received by Server within the proper timeframe (and from the correct device or coordinates, as appropriate), Server instructs processor to release the hold on Invitee&#39;s account  24 A. If confirmation is not received, Server instructs processor to charge Invitee&#39;s account the full amount of the escrow  24 B. The escrow amount is then transferred  26  to Invitee&#39;s preferred charity. A summary of the transaction is sent to both parties (see  FIG. 1D ). 
       Additional Embodiments 
       [0046]    A variety of additional embodiments to the invention are possible. In a second embodiment, the password is issued to the Organizer rather than the Invitee, shifting the balance of risk between the parties. Such an embodiment is useful in cases in which the Invitee wishes to have control over the actual transmission of the password to the Server, while the Organizer wishes to have a list of all issued passwords in advance of each meeting. In a third embodiment, the incentivized transaction is the accurate transmission of data, rather than a physical meeting between parties. Such an embodiment is beneficial in cases where, for example, Party A requires data immediately, which can only be confirmed later. Example situations include those in which Party A wants to ensure that Party B will make a telephone call at a specific time, or that Party B&#39;s car will only have been driven a specified number of miles, or that when Party A and Party B meet, Party B is in fact a 40 year old male. In these embodiments, Party B is requested to provide data to Party A. The data is transmitted to Party A through the server. The server then polls an outside data confirmation source, such as an online database, at a set time in the future. If the information provided is confirmed, the escrow is returned to Party A. If the data is found to be false, the escrow is released to a designated third party. 
         [0047]      FIG. 4  is an overview of such a non-appearance based embodiment. Party A  700  sends an information request  38  to Server  900 . Server forwards the request  40  to Party B  800 . The information request includes a date/time upon which outside validation of the requested information will be possible. If Party B accepts the request, Party B enters the information into the Server and provides payment account information. Server then checks the payment data  42  with an outside account manager or credit card processor  1000 . The processor places a hold for the agreed upon amount on Party B&#39;s account. Server runs an internal operation to determine the most appropriate Database  1000  to validate the provided information. Once the appropriate date/time has passed, Server queries  44  the appropriate Database to see if the release trigger or triggers have occurred. If the information is validated, Server instructs  46  credit card processor to release the hold on Party B&#39;s account. If the information is found to be incorrect, Server instructs credit card processor to charge Party B&#39;s account the amount of the escrow and pass it  48  to the recipient party  1200 . Both Parties are then informed of the result of the database check, and Party B is given a receipt for their donation, if appropriate  50 . 
         [0048]    The present invention has been described in terms of several embodiments solely for the purpose of illustration. Persons skilled in the art will recognize from this description that the invention is not limited to the embodiments described, but may be practiced with modifications and alterations limited only by the spirit and scope of the appended claims.