A 14-Digit Code On This Prepaid Debit Card Is Enabling A Troubling New Kind Of Fraud

Fraudsters' latest weapon of choice for scamming millions of dollars from unsuspecting victims is a popular and convenient prepaid debit card available at 92,000 retail stores around the country, The New York Times reports.

The fraud revolves around prepaid debit cards called MoneyPaks sold by the Green Dot Corporation, used by people who don't have access to a traditional bank account. Because money transfers using the 14-digit access code on the back of each card are hard to trace, the card has become a favorite among scammers.

The thefts follow similar patterns. In the case of 86-year-old Dorit Austin, the fraudsters used the false identity of a prominent law firm and its logo to entice her to transfer cash from her prepaid card to pay taxes on a fake soon-to-arrive lottery prize.

For Dominican Republic immigrant Juan de los Santos, the scam began with a phone call from someone pretending to be from Con Edison's billing department, reported New York Daily News. He told Santos they'd shut off his electricity unless he immediately purchased three $500 prepaid MoneyPak cards at the store and gave him the 14-digit access code for those cards.

"They're targeting our most vulnerable communities, our elderly and our new immigrant communities," NYPD Inspector James Klein said recently, according to the Daily News.

"Fraudsters will call or email you, saying that you won a lottery or can buy discount merchandise at their phone websites - but you need to pay fees to get your prize or purchase that merchandise via MoneyPak - and only MoneyPak," Green Dot spokesman Brian Ruby told AARP Bulletin. "Then they ask for the 14-digit code."

Scammers can then transfer the stolen money to their own prepaid debit cards. Americans reported the loss of $42.86 million from scams related to prepaid products in 2013, The Times reported. But the true number is expected by experts to be higher because some victims don't report incidents due to embarrassment or the belief the thieves won't be caught.

Amid the surge of reported cases, Green Dot plans to eventually replace the MoneyPak and its problematic 14-digit access code with a new electronic cash-transfer system in stores. But consumer advocates are concerned that thieves will simply switch to other less popular prepaid card companies offering similar cash-transfer products.