Scammers Try to Use Social Engineering and Green Dot Cards for Fraud

by Mercator Advisory Group 0

Scammers are trying to trick people into loading money onto Green Dot cards as opposed to getting them to wire money through Western Union or MoneyGram. The Florida Attorney General and the Better Business Bureau have both received complaints from people duped by scammers.

“If you are going to run a scam, you need a way to collect the money,” said Steven Baker, a fraud expert and the FTC’s Midwest region director. Like wire transfers, money sent through MoneyPaks is not traceable and Green Dot is not responsible if consumers are defrauded, he said.

Thieves are favoring Green Dot because MoneyGram, which settled charges with the FTC in 2009 regarding lax oversight of telemarketing fraud, and Western Union now have sophisticated fraud detection programs and electronic transaction flagging systems, Baker said.

The problem is not one inherent to prepaid cards, but instead one inherent in fraud, as Steven Baker points out. The danger is that the prepaid industry could end up taking the blame for a problem that moves from one payment type to another.

Click here to read more from the Orlando Sun-Sentinel.