Consumer Advisory: Before giving the gift of cash, be aware of pre-paid cash card scams
DENVER — As the holidays quickly approach, consumers are thinking of gift ideas and ways to show their loved ones that they care. An easy way to give during the holidays is through a pre-paid cards so that your loved ones can use the money how they feel best suited. If you were the recipient of a pre-paid cash card, you're not alone. Pre-paid card usage increased to 27 percent in U.S. households in 2015 up from 24 percent in 2014.
The banking and the financial services divisions at Colorado Department of Regulatory Agencies urge consumers to be aware of new scams that are occurring in the market. Although some of these scams and counterfeit activity may look legitimate on the surface, they are actually easy ways to obtain financial information quickly. A scam involving Green Dot MoneyPark cards has recently resurfaced and consumers should be aware. Green Dot MoneyPak is a pre-paid card purchased in local grocery and drug stores. Consumers can load the pre-paid debit cards with up to $500 and can use them to shop online or at local retailers that accept this form of payment.
Recently scammers have started to contact consumers through various forms of communication posing as a debt collector, law enforcement agent, or IRS agent looking to obtain the PIN number on the card to satisfy the “debt owed” by the consumer. Once the consumer gives out the PIN number, the thief can access the card and wipe the card clean of all funds, making the transaction untraceable.
Authorities such as the Douglas County Sheriff’s Department have seen activity of this nature and issued a consumer alert in early November 2016. Consumers are urged to pay close attention to scams of this nature and remember that you should never give out PIN numbers to any debit card via mail, telephone or mail.
During this time of the year and throughout the year, you as a consumer should know that fraud is occurring at a high rate due to online shopping and increased spending due to the holidays. Be aware so that you and your family can enjoy this time together and not become a victim of financial fraud.
Take 5 to Get Wise by checking out all of DORA's helpful holiday-related consumer advisories.
Division of Banking / Division of Financial Services