Beware of these recent MoneyPak scams

Taking Back the ID: Identity theft prevention analysis

Rodney Wentworth was a very good investor, always kept tight control of his money and looked for new ways to enhance his resources.

He sometimes used MoneyPak cards to pay for his online purchases. MoneyPak, sold by Green Dot, is a prepaid card. One day he noticed he had $300 remaining on a MoneyPak card. He figured he wouldn't be using the card for a while, so he decided to contact the company to get a refund. Rather than using the website information on the back of the MoneyPak card, Rodney searched online for the site. Unfortunately, the site he accessed was a fraudulent copy of the real website.

He called the phone number from the bogus site. A very cordial "customer representative" greeted him and asked him for the prepaid card number on the back of his MoneyPak card plus his credit card and checking account numbers to "process" the refund. The person on the phone told Rodney the refund would be processed within the week.

After two weeks, Rodney checked his credit card and check account to see if a credit for the refund was posted, and it wasn't. He then checked the balance on his MoneyPak, and it was zero. He realized he'd been scammed.

Green dot MoneyPak customer support scam

Although this case is fictional, it's representative of the scam the FBI Internet Crime Complaint Center (IC3) discussed on its website Oct. 7. (See Fraudulent Websites Posing as Green Dot MoneyPak Customer Support.)

In another significant version of the scam, a victim visits a fraudulent website, finds a phone number and talks with a MoneyPak "customer support representative" about a refund after someone stole funds, say $1,000, from his card. The "customer rep" tells the victim that he must load $1,000 on his card to initiate the refund. (If the victim refuses to reload the card, the rep hangs up.) The rep then says the claim will be processed shortly, and the victim will receive a refund for the full $2,000.

The rep gives the victim a supposed tracking or confirmation number and keeps the caller on the line while he drains the $1,000 from his MoneyPak card.

Customer protection

The IC3 offers these preventative suggestions:

1. Never give your MoneyPak number to someone you don't know.
2. Never give receipt information about your MoneyPak purchase to another party.
3. Use your MoneyPak only to reload your prepaid cards or accounts you control.
4. Refuse any offer that asks you to buy a MoneyPak and share the number or receipt information by email or phone.
5. To use your MoneyPak with PayPal or eBay or other online merchants, transfer the money to your PayPal account before you pay the merchant. Don't email your MoneyPak number directly to any merchant.
6. Unless it's an approved MoneyPak partner, don't use MoneyPak for any offer that requires you to pay before you get the item.

"Consumers should only use the website and phone number listed on the back of the MoneyPak prepaid cards," according to IC3. "MoneyPak customer support can only be accessed by email request via the website's online portal. The phone number listed on the back of MoneyPak cards is for adding funds to an existing prepaid card. Green Dot customer service publicizes a customer service number; however, this number will not provide assistance with MoneyPak. Currently identified fraudulent websites are not secured websites (http). The MoneyPak customer support website is a secured website (https) and does not require personal [sic] (date of birth, Social Security number) to reload a card, add money to PayPal or make payments to authorized partners. Prepaid card information is needed to reload a prepaid card on the valid MoneyPak website." Visit the MoneyPak website for more information.

Filing a complaint

The IC3 recommends that possible victims of the Green Dot MoneyPak Customer Support scam should file a complaint with the IC3 and be as "descriptive as possible, including prepaid card/account numbers affected and contact information of support ‘representatives.' "

U.S. IRS telephone scam

On Sept. 14, the IC3 reported another scam in which a fraudster takes on the identity of an Internal Revenue Service (IRS) representative and steals money from victims with the use of MoneyPak cards.

The aggressive, intimidating fraudsters — reported to speak with broken English or Indian accents — usually call immigrants. Callers will immediately take control by telling victims that "the IRS has charges against them and threatens legal action and arrest" if they don't honor their demands.

According to the IC3, the supposed charges include "defrauding the government, money owed for back taxes, law suits pending against the recipient, and non-payment of taxes." If the victim begins to question the call, the fraudster threatens "to confiscate the recipient's property, freeze bank accounts and have the recipient arrested and placed in jail."

The fraudster creates a situation of urgency but then tells the victim that he or she can avoid arrest and have their fees reduced if they purchase a MoneyPak card within an hour and load it with funds to cover the amount the fraudster demands. If the victim doesn't comply, the fraudster warns, the victim will have to pay "thousands of dollars in fees/court costs to resolve the matter."

The IC3 reported that a fraudster sometimes tells a victim how much money to put on the MoneyPak card and where to purchase it. The fraudster says that he'll stay on the line until the victim purchases the MoneyPak card and gives the code to the fraudster.

The fraudster threatens arrest if the recipient tries to terminate the call for any reason. Sometimes, the fraudster demands that additional funds be added to the card if the transaction takes too long. The fraudster tells the victim not to say anything to anyone about the call.

The IC3 gives this advice to those who receive a similar call:

• Resist the pressure to act quickly.
• Report the contact to TIGTA by clicking on the red button, "IRS Impersonation Scam Reporting."
• Use caution when asked to use a specific payment method. The IRS would never require a specific payment method such as a MoneyPak card or wire transfer.
• If you feel threatened, contact your local police department.

Cybercriminals using fake government emails

Fraudsters typically steal the identities of well-known federal agencies to add credibility to their scams and create a sense of urgency. This can panic victims so their better judgment is compromised and they give in to the fraudsters.

In a true insult to the IC3, the center reported on Sept. 24 that cybercriminals are now stealing the identities of its employees in a new scam. Victims in multiple states reported that they each received an email message supposedly from an IC3 representative who wrote that a criminal report was filed on the victim and legal papers were pending. The charges include "violation of federal banking regulations, collateral check fraud, and theft deception."

The fraudsters tell the victims to respond to the emails in one to two days or they will issue arrest warrants. Those who responded to the fraudsters "were instructed to obtain prepaid money cards to avoid legal action."

Anybody who receives this type of email should:

• Resist the pressure to act quickly.
• Never wire money based on a telephone request or in an email, especially to an overseas location.

Victims are encouraged to file a complaint with the IC3.

More help for the community

I hope you'll share this information with your family, friends and clients and include it in your outreach programs. We must step up our efforts to educate the public about these problems.

As you can see, cybercriminals take advantage of any opportunity to develop schemes to trick consumers and rob them of their resources. Even though they have the upper hand, an educated community will help curb the damage.

Please contact me if you have any identity theft issues you'd like me to research and possibly include in future columns or if you have any questions related to this column or any other cyber security/identity theft issue. I don't have all the answers, but I'll do my best to help. Stay tuned!

Robert E. Holtfreter, Ph.D., CFE, CICA, CBA, is distinguished professor of accounting and research at Central Washington University in Ellensburg, Washington. He serves on the Advisory Council and the Editorial Advisory Committee for the ACFE.

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