Finance Globe

U.S. financial and economic topics from several finance writers.
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More Advance Fee Scams Requesting MoneyPaks

The Federal Trade Commission has long been warning consumers against advance fee loan scams where scammers trick consumers into wiring a fee to receive a loan. There are all kinds of variations of this scam, but you could generally spot the scams by the fact that you were being asked to wire money. Scammers have a new twist: they’re asking unsuspecting consumers to send money via Green Dot MoneyPaks.

You can fund a Green Dot prepaid account or even Paypal account by purchasing a MoneyPak from a drug store, grocery store, or gas station. MoneyPak cards have a 14-digit code on the back that identifies the card. With that code, a person can transfer money from the MoneyPak onto his or her own prepaid card.

Scammers are turning to MoneyPaks for all their upfront payment scams, including sweepstakes and lottery scams, partly because the money isn’t easily traceable. For example, scammers tell consumers that they’ve won a prize, sweepstakes, or lottery, but they need to pay associated taxes and fees to receive the money. Thousands of consumers eagerly send the money hoping they’ve won a prize. In 2012, the FTC received more than 100,000 complaints about of sweepstakes scams.

Sweepstakes and lottery operators frequently warn that you never have to pay upfront to receive your prize. Any fees will be deducted from what you’ve won.

Advance fee loan scammers also request that individuals send money with a MoneyPak before they can obtain the loan.

Another MoneyPak scam scares consumers by posing as the FBI. A computer virus causes a popup message appearing to be from the Department of Justice saying your computer has been locked because you’ve visited pornography, child pornography, or other illegal websites. Before your computer can be unlocked, the scam ad says you have to pay a fine via MoneyPak or else you’ll be arrested. Don’t pay the supposed fine. If you receive this message, you probably have a virus that needs to be removed by a professional. The FBI won’t warn you of illegal activity via a computer popup.

The GreenDot MoneyPak website warns of several different types of scams including:
  • Imposter scams, where someone calls or emails saying they need money from you, perhaps because they’ve been mugged in a foreign country. They ask that you send money to them via a GreenDot MoneyPak
  • Job scams asking you to send money for a background check or other materials necessary to get started on the job.
  • Romance scams where you become involved in an online relationship and the person begins asking you to send money via MoneyPak.

Watch out also for calls or emails from someone who claims to be one of your service providers asking you to make immediate payment via MoneyPak to avoid having your services disconnected. In a twist on this scam, the company claims to be offering a promotion where you can pay for a certain number of months and get a certain number of months free. To take advantage of the deal, the scammer requests you to pay upfront with a MoneyPak.

Being skeptical can save you thousands of dollars. If someone you don’t know personally asks you to pay money with a MoneyPak, it’s probably a scam, especially if they don’t accept any other type of traceable payment, like a credit card or Paypal. Use extreme caution when you’re giving your MoneyPak number. Realize that once you give up those digits, the money on the card could be lost forever.

Report scams to the Federal Trade Commission, the Better Business Bureau, and Fraud.org. You may not get back the money you lost, but reporting the crime can help the FTC crack down on these scams and help other consumers avoid becoming victims.

Source: FTC.gov, Walmart.com, MoneyPak.com, Today.com
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Wednesday, 20 November 2019

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