Years ago, scam artists perfected the use of Money Gram or Western Union wire transfers to bilk unsuspecting people out of money. Today, Green Dot MoneyPaks are the choice of scammers. MoneyPaks are a relatively new way of transferring money, and are available at more than 50,000 retailers nationwide.
How The Scam Works
Consumers can pay cash to put a dollar amount on the cards. The cards then can be used in a variety of ways, including paying for utility bills and putting funds on more than 100 different prepaid debit cards. The MoneyPak cards contain a serial number, which is needed to transfer funds from the MoneyPak to a debit card, either over the phone or through a web site.
In steps the scammer at this point.
Scammers will cold call victims and tell them they won, among other things, a lottery or a prize drawing. Victims are told they must pay fees to collect their winnings, and the only way to do this is to put the fees owed onto a MoneyPak. After this is done, victims then relay the MoneyPak serial number to the scammer. The transaction is complete, and the victim has lost that money, never to see it again. This scam also has been seen on fraudulent merchant web sites.
Avoid Getting Scammed
So be warned; no legitimate prize drawing or lottery will ask you to transfer funds, especially to a MoneyPak. The AARP suggests the following tips to help stop these scams:
- Be wary of web sites or online advertisements in which you’re specifically asked to pay with a MoneyPak card, rather than also allowing the use of credit or bank-tied debit cards.
- Remember that if you're told you have to pay any kind of advance fee to collect a prize or get a job or government grant, it’s a scam.
- If you want to use MoneyPak funds to buy from online merchants, first transfer the funds to your PayPal account. Never directly provide your MoneyPak number to an online merchant.
- Don’t trust online merchants just because their websites display a MoneyPak or Green Dot logo; scammers operating phony websites often fraudulently use these logos. Only these approved partners are vetted to accept MoneyPak funds.
- Treat the funds loaded on your MoneyPak like cash and understand that unlike credit cards, MoneyPak transactions cannot be reversed. If you lose the MoneyPak or give the number to crooks, MoneyPak won’t refund your funds. And the money on your MoneyPak is not FDIC-insured.
- If you have any questions about MoneyPak cards, call 1-866-963-6219. Call 1-800-473-3636 about other Green Dot cards.