Card company takes step to head off phone utility scams

The Kansas City area is not immune to the perennial utility telephone scam and its many variations.

While the fabricated scenarios are different — an unpaid balance on the electrical or gas bill, a pending traffic ticket or an IRS debt — the common element linking the activity is the Green Dot prepaid debit card, specifically the reloading tool that disburses funds to the cards, called MoneyPak.

Green Dot has come up with a solution: Eliminate the MoneyPak and nix the scam.

Earlier this month, Green Dot eliminated the MoneyPaks from all 100,000 merchants it works with, and replaced it with a pay-at-the register system at most stores to curb the prepaid cards’ use in criminal activity.

However, Lee’s Summit police spokesman Chris Depue has no high expectations that the change will make any major impact in his area.

“I mean, I hope so,” he said. “But you’ve got to think the scammers will find another way.”

If “MoneyPak” and “Green Dot” are new words to your vocabulary, don’t worry. You’re not the only one.

Fatma Konyalioglu, owner of Overland Park Alterations, 7305 W. 80th St., had no idea what a MoneyPak was until someone called her last summer aggressively seeking what the caller alleged were unpaid power bills.

“I mean, this call was so legit,” she recalled.

Konyalioglu prided herself on never being delinquent with her debts, so to be behind on not one, but two months’ worth of power bills — for which the caller tried to collect more than $1,200 — was a major shock.

“They said I needed to put some money on the Green Dot (card) and I’d never even heard of that before,” Konyalioglu said.

Here’s how the scam typically works: Criminals will call demanding payment in prepaid debit card credits. Victims will go out and buy MoneyPak cards for the requested amount, and return the solicitor’s phone calls furnishing the serial codes to disburse the funds.

After determining that the caller wanted prepaid debit card credits, Konyalioglu went to a Walgreens and asked a cashier, “What is this ‘green money’ thing?”

Instead of selling Konyalioglu the MoneyPak cards so she could go back to her store, read their codes into the phone and furnish the funds for the caller, the cashier asked if she was there to buy it for a utility bill.

“She said, ‘Honey, don’t. It’s a scam,’” Konyalioglu recalled.

She called the collector back and explained she was aware the caller was attempting criminal activity. The caller terminated contact and hasn’t called back.

In an effort to stem crime, Green Dot Corporation recently announced that the MoneyPaks will be replaced by register transactions. Card holders will now deposit funds directly into their accounts at the register, eliminating the need to purchase the credits.

In other words, card holders will be able to add money to cards they physically possess rather than, say, one owned by someone posing as a very pushy debt collector.

Green Dot Corporation leadership appeared before a U.S. Senate committee to answer for the MoneyPak’s consistent cameo in senior-directed scams, crimes that had been making a consistent appearance in Overland Park.

Gary Mason, the Overland Park Police Department’s public information officer, said that while a savvy public has caused scammers to go dormant in that area — Mason reports the city hasn’t recorded a single utility scam, successful or attempted, in recent months — the elderly are still a preferred target for this type of criminal behavior.

Public information officers for the Independence and Liberty police departments report low or no thefts connected with such criminal activity. In Independence, the scam has only recently started to heat up as temperatures have cooled.

Lee’s Summit police say, however, that residents collectively lose thousands of dollars to scammers monthly.

Depue said his department will take calls nearly every day from Lee’s Summit residents who are the unwitting targets of an aggressive collection call related to a variety of fabricated debts, a racket that fleeces at least a few people weekly and resulted in monthly losses of $3,400 to scammers.

But between Feb. 6 and Feb. 20, Depue said, no prepaid debit scams were reported, continuing a downward trend.

However, Depue wasn’t ready to credit the demise of MoneyPaks. “I sure hope it’s helping, but we can’t really say.”

Green Dot Corporation’s internal reporting shows $10 million crime-related transactions among the $30 billion of total card reloads in 2013, a fraud rate of about .0003 percent.

That’s the lion’s share of the $43 million lost to prepaid debit cards scams during the same period, according to the Federal Trade Commission. It said underreporting may make the figure artificially low.