Andy's Got Your Back on a prepaid debit card scam - WMC Action News 5 - Memphis, Tennessee

Andy's Got Your Back on a prepaid debit card scam

(WMC TV) - Scammers are getting more creative in cheating credit card-holders who do not check their statements.

U.S. postal inspectors released store surveillance video of a credit card/gift card/prepaid debit card scam that racked up more than $100,000 in losses.

Postal inspector David Gealey said the nationwide scam started with stolen credit card numbers.

"We believe it was through either an online chat room where they purchased these credit card numbers or through an employee at a local merchant," Gealey said.

He said after the suspects stole the card numbers, they went to a retailer who sells gift cards. They grabbed several worth $500 each.

Then they headed for the check-out line and gave the cashier phony explanations for why they can't swipe their credit cards to pay for the gift cards. 

"They tell the clerk something must have happened to my card -- it's damaged, my dog chewed on it, whatever," Gealey said. "They would get the clerk to manually put the card number into the system."

That card number would be one of the numbers the suspects stole or purchased.

After the sale, the suspects transferred the value of the gift cards to pre-paid debit cards. That effectively laundered the stolen credit to a card that is as good as cash.

Gealey said the suspects used the prepaid debit cards to withdraw cash, thinking they had erased the paper trail.


Once postal inspectors caught on to the card scheme, they cross-checked the time of the transactions with cell phone records and credit card statements. That led them right to the scammers. Inspectors arrested them, charged them -- and each was tried, convicted and imprisoned.

You should closely monitor your credit and debit card statements. Postal inspectors said very few of the victims in this case had any clue someone had compromised their cards.

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