CONSUMER ALERT! Prepaid Cash Cards Lottery Scam Won’t End With the First Loss

Attorney General Lawrence Wasden today warned Idahoans that lottery and sweepstakes scams have taken on a new format that sounds safe, but isn’t, and can lead to continued financial losses.

“These e-mail and telephone scams have been around for years, but now they’ve taken on a dangerous new twist involving prepaid cash cards,” Attorney General Wasden said. “Prepaid cash cards are an easy way for someone to obtain a large sum of money in short time. An Idaho resident recently lost more than $4,000 to a lottery scam using this technique. In one day, he purchased eight cards for $500 each at the same location.”

In previous versions of the scam, potential victims were told they had won a large lottery or sweepstakes prize, but they would have to pay a fee or taxes in order to collect the money. Some Idahoans have sent money only to learn that there is no prize, and their money is long gone.

Now the perpetrators are telling Idahoans they do not need to send any money to receive the prize. Instead, Idahoans are told to purchase a prepaid cash card, (such as the Green Dot MoneyPak card commonly sold at retailers) and be ready to send it in upon receipt of the prize. All the “winner” needs to do is notify the con artist of the prepaid card’s authorization code to “verify” that the consumer has the card, and then the prize will be sent to the consumer.

The problem is that once the caller has the authorization code, he can collect all of the money on the card. Once the transfer is made, the money is untraceable and cannot be retrieved. The prize never comes, and the consumer has lost his or her money.

“Consumers should never pay money to someone who calls them claiming they have won a prize,” Attorney General Wasden said. “They also should never give a cash card’s authorization code to anyone calling them and promising a prize.”

The Green Dot Corporation has posted the following warning on its website: “Use your MoneyPak number only with businesses on our approved list. If anyone else asks for your MoneyPak number, it’s probably a scam. Don’t give your MoneyPak number to pay for something you buy through the classifieds or to collect a prize or sweepstakes. If you give your MoneyPak number to a criminal, Green Dot is not responsible to pay you back.”

Once you have given money to a caller in a sweepstakes scam, they do not go away. They will continue to call under a number of guises, including the FBI, IRS and Homeland Security. This practice is known as “reloading.”
In a reloading scam, the con artist will tell the victim not to communicate with anyone else, that they are conducting a secret investigation, and that the victim is actually in trouble for participating in an illegal lottery and money laundering. They may threaten arrest or garnishment of the victim’s wages, Social Security or seizure of the victim’s assets and home. The consumer is told to provide additional account or other financial information to enable the scam artist to steal even more money from the consumer.

To avoid these scams, remember the following tips:

Do not respond to phone calls or e-mails saying that you have won a sweepstakes or lottery. Hang up or delete immediately.

Do not be fooled by generic names, like “American Sweepstakes” or “Gold Rush Sweepstakes.”

Never pay to receive lottery or sweepstakes winnings.

Never give your MoneyPak number to someone you don’t know. Only use MoneyPak with approved businesses.

Never send money to a caller who claims to be a government agent. If in doubt, hang up and contact the agency.

If you discover you are a victim, report it to your local police immediately.

Read the full story at News Releases from Idaho Office of the Attorney General.