We’ve probably all been contacted as part of online or phone scams, and maybe we have friends who have lost thousands of dollars after falling for a scam. One of the easiest ways to know if you are being targeted is to think about how you are asked to transfer your funds.
How does the scammer want this money to be sent? It must be a way for them to collect right away without you backing down. It must also be difficult to trace. Remember, your funds can be instantly transferred electronically around the world. There are five different methods commonly used by scammers to perform these money transfers.
Gift cards are currently the preferred method used for all types of scams. You are invited to purchase one or more cards worth several hundred dollars from a major retailer like Amazon or Walmart. You then read the code numbers on the back of the cards to the caller. Once you’ve done that, the scammer can use the codes to purchase merchandise including other gift cards with lower denominations. This makes the payment untraceable.
Similar to a gift card, scammers also ask for prepaid debit cards. A prepaid debit card is a reloadable debit card like Visa that is sold in large retail stores. It has a serial number which is used to transfer funds from your bank account to the card and is used like a traditional checking account debit card. The consumer can designate the amount of money to load on the card at any time. The money on the card can be transferred to another debit card or used to make same-day payments to other companies. If the serial number falls into the hands of a scammer, they may drain the money you loaded onto the card.
In the past, the most common method used by a scammer was wire transfer. Your bank, Western Union, or MoneyGram sends funds to another account number for a fee. The transfer cannot be canceled once it is sent. The only exception is if you make an international transfer and then contact the company to cancel it within half an hour, and it only works if the transfer has not yet been picked up or deposited.
Money transfer apps like Venmo, Cash or Zelle are commonly used by most young people today. You can easily transfer funds to another person who has an account. The apps are designed to be used by people who know and trust each other, and there is no consumer protection if you send money through any of them to someone who asks you to. share your account number. Because you authorize these payments, you probably won’t be able to get your money back.
Most of us don’t have cryptocurrency accounts like Bitcoin, but they are becoming more and more common. Victims are instructed on how to open an account and instructed to buy a fraction of a Bitcoin, for example, in increments of just $ 10. Transactions take a few minutes and are done person-to-person, without a bank or regulatory body. When the crook gets your money, it’s gone. More and more cryptocurrencies are being developed all the time.
Last week’s column was about the grandparent scam where you get a call or message from a “grandchild”; a disaster has happened, and they need the money quickly. There are several other scams we need to watch out for and next week’s column will explain how they work.
Billions of dollars are lost every year to scammers. If you think you have been scammed, contact the company that sent the money and see if they will reverse the payment. (They probably won’t, but it doesn’t hurt to give it a try.) Notify the police department, as scammers usually target an area for a while and then move on. Finally, contact the Federal Trade Commission. When you report a scam, the FTC can use the information to build cases against scammers, spot trends, educate the public, and share data about what’s going on in your community. If you’ve been scammed, report it to the FTC at ReportFraud.ftc.gov.