Working as a manager for a major retail drug store chain I’m trained to detect fraud and scams but recently a certain scam that I’ve dealt with isn’t just affecting businesses but the general public.
A few weeks ago I was working the graveyard shift when at 1AM the “Regional Vice President” calls saying that he needs me to fill several prepaid credit cards because there is a discrepancy in my cash register. Aside from meeting the actual Regional Vice President a few months’ prior and hearing warnings from my Lost Prevention Supervisor, I immediately knew that this was a scam. I told the guy to call back in the morning to speak with my manager. He immediately hung up and I haven’t heard from him since.
Just to give a quick rundown, prepaid credit card services such as GreenDot and PayPal offer credit cards without the need of a bank or a credit check because you pay the money up front. You go to a retailer that sells these cards and fill it up with a certain amount of cash along with a small fee. You contact the company to register and in a few weeks a card arrives with your name on it. In the meantime you have a temporary card that you can use at your leisure. You use it just like a credit card. Unlike gift credit cards, you can add more money onto the card whenever you want. It is a great tool for people who need a credit card but don’t want to deal with potential interest and late fees or don’t have a good enough credit score.
I’ve heard recent reports that this scam isn’t just targeting businesses that sell prepaid cards but now the general public. It’s turning into the new Nigerian email scam. The unwitting victim receives a phone call or email stating that s/he can get a great deal on a certain service, such as cable or phone services, or win a certain amount of money, such as a sweepstakes. All s/he has to do is buy a prepaid card and call back. After purchasing the card victim calls the given number and gives out the card number. The scammer promises to call back with further instructions. Days or weeks pass, they never call back and the money on the card is gone. Although it’s prepaid, the card is no different than a traditional credit card. Being the victim of a stolen wallet I can attest that as soon as the wrong hands have your credit card number, chaos erupts. Before I even knew my wallet was missing, $6,000 had already been racked up with my credit cards. Unlike a traditional credit card, it is much harder to track these prepaid cards especially before they are registered.
Protecting yourself from one of these scams is quite simple. If it’s too good to be true it probably is. Before buying the card go to the service company’s website and call their customer service line to ask if this type of promotion really exists. If the customer service line says no, it’s a scam. If it’s a sweepstakes, most sweepstakes do not require any money up front. You fill out a card and mail it in. For ones that do require money, such as the lottery, they only accept cash and you have a special ticket showing your entry. Now there are a few legitimate online lotteries that require you to buy raffle tickets online using a credit card, however they will never require you to buy a prepaid card. Before buying an entry do some research. If everything appears legit, at least use a traditional credit card. That way if it does turn out to be a scam it’s much easier to track and you have a better chance of getting your money back.