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Police Warn of Prepaid Card Scam

Niles police warn two people have been approached by scam artists so far; one lost $4,000 to the prepaid card scheme. The scammers can be in any country, making it impossible to recover the funds.

 

Holding up a Green Dot prepaid card, Niles Police Chief Dean Strzelecki briefed business owners that con artists are using it to defraud people.

Strzelecki, speaking to the Niles Chamber of Commerce Thursday, said the card has its merits, and can be useful for travelers because if someone steals it, they can only get the amount that has been loaded onto the card. 

However, the department has seen two scam cases involving the card this week.

Earlier:

"The potential victim is contacted via phone, and told they've won a prize, such as a large sum of cash, a vehicle or some other high-value item. The caller then instructs the potential victim to go to a retailer to purchase a Green Dot card and preload the card with a large sum of money, typically over $1,000," he said.

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The scam artist tells the victim to call back and read the card's ID number to the scam artist on the phone. That allows the scam artist to siphon the financial value off the card.

"The major problem is the offenders could be located in different countries," Strzelecki said, adding one was in Nigeria, making the crime impossible to prosecute.

One Glenview victim lost $4,000 to the scheme, and might have lost more, Strzelecki said, but an alert store clerk started asking the victim questions and then called the police.

He asked retailers  to contact the police department at 847-588-6500 to find out how to prevent the scams. If police can educate the clerks who sell the cards, that could go a long way in protecting buyers, Strzelecki said.

Green Dot cards and similar prepaid cards are sold at Walmart, Target, CVS, Walgreens, 7-Eleven and other stores.

The cards are especially popular with fraudsters because they are untraceable, Huffington Post reports. 

The police department also issued tips for consumers: 

  • If you receive a call saying you won something, hang up. If you don't participate in the scam, you will not lose any money.
  • If you believe you might have been a victim of a scam, please call your police department. The Niles Police Department is at 847-588-6500.      
maria November 03, 2012 at 05:09 PM
Why oh why would people think reading their credit card over the phone to a total stranger is any different than handing cash to.a total stranger. Is that not a phrase used by credit card companies "same as cash"!
Jesse Anderson November 04, 2012 at 11:00 PM
Thanks for alerting everyone about this new type of scam. Another type of scam that's unfortunately *legal* is being run by some of these prepaid card companies themselves with the extortionate prices they charge. I recommend that people always have a look at the "Debit Cards & Prepaid Cards" page on the creditparrot.com card comparison site before deciding on a new prepaid card - I've found a few good cards there in the past.
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