Sweepstakes Scammers Replace Moneygram With Green Dot

For years, people running a sweepstakes scam would instruct their victims to send money using a Western Union Moneygram, since it was untraceable and the funds not retrievable.

But now it appears schemers have updated the scam, substituting pre-paid debit cards as a way to take money from their marks.

In Oregon, Attorney General John Kroger has noticed the trend, with consumers reporting suspicious callers promising sweepstakes winnings but instructing potential victims to purchase a prepaid credit card to cover "taxes" or "fees" associated with collecting their cash prize.

For example, Kroger says one Oregon resident was contacted on his cell phone last week by a con artist who asked him to purchase three $1,000 Green Dot MoneyPak credit cards. In order to collect his sweepstakes prize, the man was told he must call an Idaho number and read the serial numbers off the back of the cards.

Old story

Bogus sweepstakes and lottery offers have been around forever, and while many easily see through these too good to be true schemes, many others fall victim to them. Often, they are precisely the people who can least afford to lose money.

These operations are often run by perpetrators located outside the U.S. – making it very difficult for law enforcement agencies to track them down. In 2010 officials received 1,054 complaints about international money schemes, with $1,999,323 in reported losses – more than double the $707,783 reportedly lost in 2009.

Kroger offers the following advice to consumers when it comes to unsolicited telephone calls, mail or e-mail about a sweepstakes or lottery:

• Never pay to play in a sweepstakes.
• Never pay money to claim a prize.
• Do not give out your prepaid credit card number to someone you don't know (learn more about Green Dot prepaid cards).
• Participating in a foreign lottery is illegal and such lotteries often have close ties to organized crime.
• Beware of fake organizations that go by names similar to more widely-known groups in order to trick consumers.
• Government agencies do not sponsor sweepstakes.
• Beware of requests for information about your income, credit card ownership, or bank accounts as a condition of participating in a sweepstakes or lottery.
• Do not participate in sweepstakes or respond to advertisements that resemble a check, bill or invoice.
• Destroy fake sweepstakes or lottery offers by shredding or deleting them.

Why the change?

Sweepstakes scammers have moved to pre-paid money cards because law enforcement has waged an extensive information campaign, warning consumers about the dangers of using Western Union to send money to people you don't know. Moneygram locations now routinely provide warnings about possible scams.

Consumers should not be tricked, just because scammers have updated their old tricks. It's still the same of scam.