A new and popular method is using the Green Dot MoneyPak card.
MoneyPak isn’t a pre-paid debit card, but it’s used to move money around. It’s designed to reload pre-paid debit cards with cash, to add cash to PayPal accounts and to make payments to approved businesses.
But fraudsters have found other uses for the card because they’re essentially untraceable.
In one scam, the con artist impersonates an Internal Revenue Service agent, and phones an unsuspecting victim, saying the victim owes back taxes. To repay the debt — and to avoid arrest or deportation — the victim is instructed to buy a MoneyPak card and load it with cash. The victim then hands over the card’s serial number, and the bad guy transfers the money to his own card. The transaction — the scam — is complete.
There’s a similar scam in which the victim is called by a fake rep from a utility company who threatens to shut off service unless the victim buys MoneyPak to pay off overdue utility bills. When the scammer gets the card’s serial number, he’s off with the cash.
So when Janine Cavallo, 47, contacted us about a problem her 70-year-old mom Alberta Cavallo was having with some MoneyPak cards, we expected it was another swindle.
The younger Cavallo explained that her mother purchased $8,000 of MoneyPak cards for a friend in Brazil, but $3,000 of the cards had no money on them.
A friend in Brazil?
Oh, boy. The scam alert siren rang out loud and clear.
But no, Cavallo really did have a friend in Brazil.
The friend was on the trip to purchase racehorses for a local breeder’s group, and he needed cash to get through customs for fees related to the animals. He was in a rural area without access to traditional banking services and the nearest Western Union was more than four hours away.
But about two hours away was a merchant who accepted MoneyPak cards, the Cavallos said, so the friend wired $8,000 to Alberta Cavallo. She was to purchase MoneyPak cards with the cash, then give the serial numbers to the friend, who would get cash from the merchant.
Or, that was the plan.
There was no fakery involved and the money wire was authentic.
The problem was in the purchase of the cards, which took place on March 3. Merchants have a limit on how much consumers can load onto one MoneyPak card and how many can be purchased at once, so Janine Cavallo visited several stores to accumulate the $8,000 in cards.
The women gave the cards’ serial numbers to the friend. He cashed out the first $5,000 without a problem, but six cards, each with $500, had no money on them, they learned.
They called MoneyPak, but they were unable to get a person on the phone, they said. The automated voice service asked for a 16-digit card number, but her cards only had 14 digits.
Janine Cavallo thought the store might help.
“The manager tried. She couldn’t speak to a human either and received the same message,” Janine Cavallo said. “The manager told me this is a big problem with the Green Dot cards, and the money was with Green Dot.”
At home, the Cavallos got back on the phone and finally reached a rep named Chris. He looked up the cards and said he could see the $500 attached to each, and that a security block was on each card, the women said. He gave them a reference number and said the block would be lifted in one business day, and that he’d call when that was done.
But they never got a call back and the cards still didn’t work, they said.
So the next day, they went online. Plugging in the card numbers showed they had “insufficient funds.” Janine Cavallo said they figured the money was never loaded onto the cards.
They emailed the general support address and were given a phone number to call, but they said they still couldn’t reach a human.
Meanwhile, the friend was still stuck in Brazil, needing his money.
The Cavallos filed a complaint with Consumer Affairs, and then they contacted Bamboozled.
CUSTOMER SERVICE NIGHTMARE
We reviewed copies of the receipts and gave Green Dot a shout. It said it would have a rep call the women.
But it turned out to be a week of varying stories, excuses, non-answers and more, the Cavallos said.
When the rep first called on March 25, he confirmed there was $500 on each card and that there was a security block, they said.
“He said the money was never released or put on the card.” Alberta Cavallo said. “Supposedly he’s going to FedEx a check to me and he will pay for the FedEx because of our ‘inconvenience.’ ” She said the rep promised to call in about an hour to confirm. Instead, it took hours, the women said, and then the rep was no longer ready to send a check.
Instead, he asked for copies of receipts for every card, plus the serial numbers.
The women sent it over, and after a review, the rep told the women the cards in question were not purchased at the stores indicated on the receipts, they said.
“That is untrue,” Alberta Cavallo said. “We bought everything from the three stores on the receipts.” The rep said he’d get back to them by the end of the day, but a call never came.
“It’s strange,” Janine Cavallo said. “When we spoke to the rep ‘Chris,’ he could see what stores we bought the cards in. I don’t know why they can’t see any of this now.”
The next day, the women called the rep. This time, he said he could only find $2,500 of unused funds.
“He also told me that I was scammed or my friend was scammed in Brazil and to speak to a family member for counseling and that I needed mental help,” Alberta Cavallo said. “He said he would call me back about sending the $2,500 by FedEx overnight. He never called me back.”
So the women called the rep the next day. The rep said he found the other $500, and that he’d take the FedEx charge out of the money that was being returned, the women said.
By now, the Cavallos just wanted the money back, and they said they were told they’d be given a tracking number soon.
But hours later and into the next day, no one called with a tracking number, and the Cavallos started to wonder if they’d ever see the money.
By now it was Friday, and finally, in the afternoon, the rep called.
“He said I was not getting any money back, but he also admitted the money was never put on the cards nor were these cards activated,” Alberta Cavallo said.
She then called the local police department, which told her the incident was fraud, she said. So she called the rep again, but an assistant answered.
“I told him that he had one hour to call me back or I was pressing criminal charges,” Alberta Cavallo said. “Finally, he called me back and told me, ‘You do what you have to do.’ Then later on, he called to say they were going to FedEx the money.”
And on the following day — a Saturday — the women received a package with six checks for $504.95 each, which included the purchase fee for the cards. Alberta Cavallo said she deposited the checks into her account, and then she sent the funds to her friend in Brazil via Western Union.
While Green Dot wouldn’t talk to us about this case for privacy concerns, it did discuss MoneyPak in general.
“Green Dot is committed to educating consumers about how to avoid becoming victims of financial fraud scams,” a spokesman said. “Consumers should protect their MoneyPak numbers just as they would cash, and Green Dot makes vigorous efforts to remind consumers on the MoneyPak packaging and website never to give their information to a private individual, to someone claiming you have won a prize or lottery, or to pay for items purchased from classified ads.”
You can report fraudulent activity to Green Dot by calling 1-800-GREENDOT (800-473-3636). That, by the way, is the same number the Cavallos said they called and couldn’t speak to a human.
While the Cavallos didn’t use the cards in their intended way, we’re glad they got their money back — even though it took a month of efforts, and an interesting week’s worth of conversations with a rep.