4 tips to help avoid prepaid debit card scams

David Pollino
Posted by David Pollino

Beware of the latest phone scam, this one stealing money from businesses and consumers via prepaid debit cards.

Female small biz owner taking a customer's credit card.A Bay Area businessman told his story recently in the San Francisco Chronicle of a scammer threatening to shut off his company’s electricity unless he immediately paid allegedly overdue bills with a prepaid debit card. The Chronicle’s Kale Williams writes that this fraud is rampant, and small business owners and the elderly are prime targets.

Similar scams have been reported around the country. In some scenarios, callers claim to work for the IRS, law enforcement, or Federal Immigration Services. They insist victims can stay out of trouble by purchasing a prepaid debit card and revealing the PIN so the caller can get the money loaded on the card. In one variation of the scam, the caller claims to be from the local courthouse and is collecting a fine for missed jury duty.

Here are my top 4 tips to help avoid the various forms of prepaid debit card scams:

1) Don’t trust caller ID. Known as “spoofing,” scammers have learned how to display false information. Criminals may also have personal information about you before they call, so don’t take that as a sign the call is legitimate.

2) Verify who you are dealing with before you pay. If you receive a surprise call, hang up and call the company or government agency using a number you know or look up on your own. Alternatively, go on line to determine the status of your account. Don’t give out account information, passwords, or PINs over the phone unless you initiated the call.

3) Stay on guard. Know that no government representative — and virtually no legitimate business — would ever ask you to pay with a prepaid card or money transfer. If someone tells you that you need to buy a prepaid card or wire money, be aware it is probably a scam. There is no valid reason for someone to ask specifically for a prepaid card. A payment is a payment. When in doubt, you can almost always make a payment in person.

4) Don’t call, text, email, or click on links in response to unexpected emails or texts. Surprise messages demanding payment or seeking account information may be scams. Links in such messages may infect your computer or device with malware.

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