Reloadable debit cards like the Green Dot MoneyPak can be a convenient way to pay bills or fund your PayPal account. Unfortunately, criminal minds have been hard at work lately creating a variety of scams whereby they obtain MoneyPak card numbers and then use whatever balance is left on the card. If you have a MoneyPak card or other prepaid debit card, protect yourself from fraud with the following tips.
Many of the current scams involving MoneyPak cards closely resemble scams that have been around for some time, where wire transfers of funds are requested. Since smart consumers have caught on to most of the wire transfer scams, the scammers have searched for a new way to illegitimately obtain payments and have found that prepaid debit cards fit the bill. Also, transactions involving prepaid debit cards are untraceable, which adds to the appeal for scammers. A traditional debit card, in contrast, is linked to a bank account.
One good rule of thumb is to use your prepaid debit card to make payments only to individuals or companies that you know. For example, you know the name of your cable television provider and the electric company. Another important thing to remember is that scammers will sometimes try to convince you that you have won a lottery prize, and that you have to give them your card number and pay a small fee in order to collect your winnings. No legitimate lottery or sweepstakes will require you to pay a fee to collect your winnings, so run the other way when you hear that one.
Another version of the scam is where the scammers ask for payment via MoneyPak as an advance fee for a payday loan or other type of loan. This scam is targeted at people who have trouble getting loans due to poor credit. Advance fee loans are often illegal, so even if you are not asked to pay the fees with a prepaid debit card you should avoid them at all costs.
Many of the current scams involving prepaid debit cards will specifically ask for payment via MoneyPak. If you see that, it is more than likely a scam, even if the web site has a picture of the Green Dot company logo. Green Dot is aware of the problem, and has a list of verified partners available on their web site along with tips for avoiding prepaid debit card fraud. If you use prepaid debit cards, handle them with care. Think of them as cash because they do not offer any of the protections that credit cards offer.
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