Scammers now accepting Green Dot MoneyPaks By Herb Weisbaum, TODAY contributor Dinah Keck didn't realize the caller was a crook. The caller told the 70-year old, who lives near Ann Arbor, Mich., that she had won $3.5 million dollars in a lottery. All she had to do was pay $3,500 to cover administrative fees and taxes and the check would be on its way. Those payments would be made via Green Dot MoneyPaks - $1,300 upfront and then $200 a month. Keck went to the store, bought the MoneyPaks and gave the "award company" the PIN codes to access $1,500. Thankfully, she contacted the Better Business Bureau before she sent the bad guys any more. "I will never see that money again," Keck said. I'm behind in paying all of my bills because of what I did. Scammers still use wire transfers and credit card numbers to fund their frauds, but cash-load PINS, like those used by Green Dot, have become the new preferred payment method. "It's an easy way for them to get someone's money without being traced," said Katherine Hutt, director of communications at the Council of Better Business Bureaus. We've seen numerous cases where people have been defrauded out of thousands of dollars this way. The Better Business Bureau in St. Louis recently reported on a Missouri man who lost his life savings to prize scammers. Over the course of many months, he sent them $41,000 using Green Dot MoneyPaks. How the scam works A MoneyPak lets you go to a supermarket or drug store (more than 60,000 places nationwide) and convert cash into digital currency that can be loaded onto a prepaid debit card or added to a PayPal account. The MoneyPak card you buy at the store is a deposit slip. It gives you access to that money via the 14-digit authorization code on the back. "As soon as the victim gives the scammer that code, they use it to load all of your money onto their prepaid card," explained Karen Hobbs at the Federal Trade Commission. Then they can run to an ATM and get all of the money in cash or they go to an electronics store and buy things that are easily fenced. Once that money is offloaded, it is essentially irretrievable. A number of companies provide a cash-load service for prepaid debit cards. Green Dot is the leader in this industry and therefore the most requested by the bad guys. Green Dot Green Dot MoneyPak's have a warning highlighted in yellow cautioning users about fraud. "We do not want people to be victimized by fraudsters who try to steal their money this way," said Green Dot spokesman Brian Ruby. We hope people will see the yellow warning that is now on the MoneyPak card, right above where you scratch to get the card number. Use your MoneyPak number only with business listed at www.moneypack.com. If anyone else asks you for your MoneyPak number, it's probably a scam. If a criminal gets your money, Green Dot is not responsible to pay you back. The prepaid card industry is keenly aware of the fraud problem and is working to thwart the bad guys. "We're setting up systems to identify when a prepaid card is getting several reloads via PINs followed immediately by cash coming off the card, especially when it's in a foreign country," explained Terry Maher, general counsel for the Network Branded Prepaid Card Association. That would trigger an alert and the card could be blocked. Lies and more lies MoneyPaks are now used for a variety of scams that involve an upfront payment for a service that is never performed, such as advance fees to get a loan, a grant or a credit card. They're also a popular payment method for all sorts of prize, sweepstakes and lottery scams. The con artist who called 67 year old Jean (she asked that we not use her last name) told her she had won a million dollars in the Publisher's Clearing House Sweepstakes. Jean, who lives near Cleveland, was skeptical, but she had entered the contest. The caller spent a lot of time talking to her about how the check would be presented on TV. "I hope you're not scamming me," she told him. "Oh no, we wouldn't do that," he said. We're the real thing. Jean says he was "very smooth" and had an answer to all of her questions. She remembers that he kept telling her someone from the Better Business Bureau would be there when the check was delivered. By the time she realized she'd been duped, Jean had given the phone crook $5,000 loaded onto Green Dot MoneyPaks. "That's a lot of money," she said. If I can get the word out and stop just one more person from being taken, it's worth it to me. Be advised: Publisher's Clearing House does not operate this way. They never ask for money to claim a prize award. In a fraud alert on its website, the company says: PCH employees would never contact you personally or in advance to notify you of a prize award. Our prize awards are presented just the way you see in our popular TV commercials, "live and in person" by our Prize Patrol, with balloons, champagne and check in hand - - and with no advance notification!" Also, the Better Business Bureau does not help companies give out prize awards. "A lot of scammers use our name to gain credibility," said the BBB's Katherine Hutt. We do not participate with any contest, lottery or giveaways. Remember: with legitimate contests you never have to pay to claim your prize. If there are any federal taxes to pay, that's between you and the IRS. Don't get burned The only reason to use a MoneyPak or other reload PIN is to add money to your own prepaid debit card, or PayPal account, or one that belongs to a close family member. "You should never let anyone convince you to buy a reload PIN or MoneyPak and give them that authorization number," warned Terry Maher with the prepaid card industry. If anyone tells you that, it's a guaranteed scam. Should you fall for the slick pitch and realize you've been taken, call Green Dot right away. They may be able to freeze the funds on the scammer's card, if it hasn't been offloaded. Better yet, know the warning signs of a scam and protect that PIN number just like you would cash - because that's what it is: digital cash. Green Dot has these fraud prevention tips: Only use a MoneyPak with businesses on the approved list, found at www.moneypak.com Never give the number to a private individual If you've been burned this scam, report it to the Federal Trade Commission, the Better Business Bureau, or Fraud.org. You may be able to help protect others. More Information: AARP: Beware of Green Dot MoneyPak Scams FTC: Prize Offers FTC: Using Money Transfer Services Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.