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Prepaid Card Phone Scam: How To Spot It And Not Get Duped

Rite-Aid prepaid card phone scam alert. Click to view larger image

Earlier this month, a Rite-Aid Pharmacy store in Boston posted the above alert for its customers. It read:

"Boston Police
Attention Prepaid Card users

There are numerous scams victimizing members of the community where they are being contacted by phone and instructed to buy pre-paid cards such as Green Dot and Vanilla Reload.

The caller is telling the victims that their heat or electricity will be shut off, they owe the I.R.S. taxes, and they will be arrested, that they have just won a lottery or prize, and need to pay taxes, or a relative is being held until money is paid. The victims are told to buy the cards and then call the scammer back and give them the code number off the card. The money is then electronically withdrawn and the card is empty.

DON'T BE SCAMMED

Before you buy the card, contact the Boston Police at 617-343-4700 if you received one of these possible scam phone calls."

Green Dot and Vanilla Reload are real, valid prepaid cards used by consumers. Many consumers use prepaid cards to avoid the high overdraft fees banks impose on checking account debit card users. Some employers use a version of prepaid cards, called payroll cards. It is important to realize that many fees apply to repaid cards. You can learn more in the Prepaid Cards section of this blog.

It is good for retail stores to warn their customers of phone scams. This notice described several current variations of the phone scam. Most versions include are threats (e.g., owe taxes, kidnapped relative, utilities will be shut off) to make the victim act quickly without thinking.

Sadly, this scam is not new. The Boston Mayor's Office warned consumers in 2012 about an early version of this prepaid-card phone scam:

"Victims are then told by the caller (suspect) that they have won a prize which includes a large amount of money, a new car or property. Victims are then instructed by the caller to go to a local convenience store and purchase a Green Dot Money Pack (reloadable credit card). After the reloadable credit card is purchased, victims are instructed to contact the caller (suspect) and provide the serial number to the prepaid card. Once that occurs, the suspect is given access to the account and the money. Officers would like to take this opportunity to alert potential victims that there is no prize. This is a scam."

Obviously, when criminals find a scam that is successful, they will continue with it and add new versions to make it more difficult to recognize. Criminals will also move the scam and call consumers in other areas or states.

Have you received a phone call about this prepaid card scam? If so, tell us when and the town where you live.

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