New: Crooks Use Green Dot Scam for Advance Fee Fraud

Green Dot reloadable debit cards become latest weapon in widespread government grant scams: Internet Scambusters #361

Today’s special issue highlights a scam you probably have
never heard about, but one that is easy to fall for: the Green
Dot scam.

Reloadable debit cards — especially the top-selling,
legitimate Green Dot cards — are the new money-moving method
of choice for scammers.

Using phony government loans as a front for an advance fee
scam, the crooks issue bogus grant checks, then tell victims
they must pay a fee by reloading their debit cards.

And that’s not the only new tactic being employed by the grant
scam artists, as we explain in this issue.

Let’s get started…


NEW: Crooks Use Green Dot Scam for Advance Fee Fraud


Green Dot reloadable debit cards are the latest weapon for
crooks working a well known type of grant scam.

The con itself is a type of advance payment scam in which
victims receive what seems to be a grant award check –
usually one they didn’t apply for — with a request that they
then wire part of the payment back to cover some mythical
fees.

You know the rest — the victim wires the money, then the
check bounces.

Now that so many people have wised up to this type of fraud,
scammers have hit on the idea of using the legitimate Green
Dot card system to collect their money.

Along with the bogus check, usually for just under $5,000, an
accompanying letter says recipients must pay a finder’s fee of
10% to the “broker” who secured the grant.

Now here’s the sneaky trick. The letter tells victims to buy a
Green Dot MoneyPak, of the sort available at many retail
outlets including drug stores.

MoneyPaks are used to top up existing Green Dot debit cards.
The victim sends details of the card to the “broker.” These
are used to top up the crook’s own Green Dot card — and then
quickly drained at an ATM.

In other words, it’s a money transfer that bypasses the
traditional cash-wiring companies and offers a far more
effective cloak of anonymity for the advance fee scammers.

But There’s More…

To add to the effectiveness of this con, the grant scam
artists use another trick to delay their discovery. They use
“legitimate” checks from active verifiable bank accounts –
either stolen or forged.

This means that banks may accept them without query and the
money may even show up in victims’ accounts. A few weeks
later, their bogus status is revealed — by which time the
victim has bought the MoneyPak and sent the details to the
scammer.

Additional New Grant Scams

This con trick is just the tip of the grant scams iceberg. In
a previous issue, The Truth About Government Grant Scams,
we explained how crooks were using the availability of
government grants as a cover for scamming individuals
and businesses.

With the economy still struggling to emerge from recession,
these government grant scams have become more brutal than
ever, with many new variations popping up.

On the advance fee type of scam, for instance, another new
ruse is to set up supposed debt consolidation and grant
companies with a religious tag attached.

Scammers use faith-related words like “Christian” in the
business name, both to give it credibility and to draw in
victims from these faiths. And, of course, they don’t care
that you’re already in a financial mess before they soak you
for a few hundred (or more) dollars.

There could hardly be more devastating evidence of the
heartlessness of scammers than in a recent incident in Detroit
where unemployment is 28%, with 60% of people now existing
below the poverty line.

Hardly surprising that when the city announced a grant program
to help the needy with food and rent, 60,000 people turned up
on a single day to complete application forms.

Sadly, only a few thousand grants were available and the city
quickly ran out of forms at the public application event.

Enter the scammers, armed with worthless photocopies of the
form. The forms, even the copies, clearly stated that
applications would only be accepted on original documents.
Copies would not be accepted.

But that didn’t stop the scammers charging $20 apiece. And,
according to a city official, they did a brisk business.

Still More Grant Scams…

Also riding the grant scam gravy train comes a whole raft of
money-making schemes disguised as information, training or job
opportunities.

Some of these are perfectly legal, but legit or not, they all
aim to cash in on people’s ignorance.

Some are not scams: they just charge exorbitant seminar
attendance fees or website access fees to provide information
that is easily available free of charge.

However, some clearly cross the scam line. How about this for
a sneaky trick:

You sign up for a grant-search service that seems to call for
a one-off credit card payment, with a money-back guarantee.
You scrutinize the fine print. Everything looks OK, so you
enter your details and press “submit.”

The page disappears then re-appears with the form fields
empty, as though something went wrong, so you patiently fill
it in again, and this time it’s accepted.

If you didn’t check the fine print again — and why would you?
– you won’t have noticed that it’s a slightly different form
and this time you’re signing up for a service that requires
regular payments, drawn on your credit card!

What’s more, by doing so, you nullified the money back
guarantee.

Summary

Our advice can be summarized in these four tips:

  1. If you want to know what government grants are available, ask the
    government.
    Start at the target=”_blank”>Grants.gov or target=”_blank”>Govloans.gov sites.
    Don’t be fooled by other sites that have ‘government’ or other
    official words in the title.
  2. If you decide to pay someone for grant advice, check out
    their credentials carefully and make sure you know what you’re
    paying for. Don’t be taken in by suggestions of religious
    affiliation.
  3. Check out your local community college for possible advice
    or courses that will help you understand the grants that are
    available, without paying through the nose.
  4. There are no guarantees that you will get a grant, no
    matter who you apply to or what forms or software you use.
    You’re unlikely to improve your chances of getting cash by
    using paid-for materials.

Oh and don’t forget where we started here. If you get a grant
check you didn’t expect and a request for a Green Dot fee
payment, trash it!

Time to conclude for today — have a great week!