The Consumer Federation of America and Green Dot Corp. are partnering to educate consumers on how to avoid being victimized by crooks who target unsuspecting MoneyPak customers.
Available at retailers nationwide, MoneyPak allows customers to load cash to their Green Dot or participating partner prepaid card via phone or online anytime. MoneyPak can also be used to fund PayPal accounts without requiring access to a bank account.
As part of the program, the CFA today released a set of tips and a video to help consumers recognize the signs of scams and fraudsters who lure customers to provide their confidential MoneyPak information in exchange for a promise of goods or services that they don't intend to honor.
"Scammers take advantage of many different payment systems," said Susan Grant, CFA's director of consumer protection. "It's a problem year-round, but during the holiday season it's especially important for consumers to be aware of how crooks may try to get their hard-earned cash."
Consumers should treat the MoneyPak like cash and only use the MoneyPak number with businesses on the approved partner list.
The CFA says the two most common fraud scenarios are variations of familiar scams. In the first, the consumer sees a great deal while shopping online, follows the crook's instructions to pay via MoneyPak, and never receives the item.
In the other fraud scenario, the scammer claims that the consumer has won a sweepstakes or lottery. To claim it, the consumer is told to pay taxes or other fees using MoneyPak. However, no prize ever materializes. Typically, the scammer gets the MoneyPak number from the victim, transfers the funds to a prepaid card, and cashes it in at an ATM.
John Morton, chief risk officer, Green Dot Corp., said the goal is to teach consumers to understand how MoneyPak works and how to use it safely and with confidence.
"Once you put funds on MoneyPak, your MoneyPak number is the same as cash,'" Morton said. "We remind customers to only use MoneyPak with approved partners and companies they know and trust."