GYPSUM, Colo (CBS4) – For years, scam artists have been asking people to wire money to them. As a result, people get suspicious when they bring up wire transfers, so they are turning to prepaid debit cards.
“The scammers are having to turn to these money cards more and more, so they’re taking their time, they’re talking slowly to seniors, they’re walking them through the process,” said Cary Johnson, consumer fraud investigator for the Jefferson County District Attorney’s Office.
Prepaid debit cards are wildly popular among people without a bank account and young people who are getting money from their parents. The cards are readily available at a wide variety of stores.
Consumers buy the cards, load their money onto them, then activate the card and use it just like a debit card. In order to activate the card, federal law requires you provide your name, your birth date, and your Social Security number.
From there the scammers want you to give them all the numbers associated with the cards so they can collect the money you’ve loaded onto it.
“There are some issued by traditional credit card companies … American Express has one. Visa for instance back some of these, and then there’s others that are just private companies,” said Kyle Hurst an instructor of Economics at the University of Colorado Denver.
Linda Miller has five prepaid debit cards with $500 on each one. They are all that are left after a family member got scammed.
“A lot of money has been lost,” Miller told CBS4.
The Gypsum resident went to activate the cards to get back her $2,500, but balked at the idea of giving out her personal information.
“The information that they ask you for is your name, your date of birth, and your Social Security number,” Miller said. “So you have just now entered into a database .. ‘We’re not stealing your identity. You’re freely giving it.'”
Again, federal law requires the companies that issue these cards collect that information. But Miller worries that these companies may not be secure.
“These are companies that have arisen within the last few years, not much is known about them,” Johnson said.
Johnson agrees that giving out your Social Security number is a reason to pause.
“I’m trusting in my heart-of-hearts that like all other businesses they are providing protections for that important personal information that belongs to us,” Johnson said.
Miller isn’t willing to take the risk, so she’s stuck with plastic and no money.
–Written for CBSDenver.com by Special Projects Producer Libby Smith