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Media > Newsletters > Consumer Advocate > October 2016 > Scammers’ Favorite Payment Methods

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Scammers’ Favorite Payment Methods

Fraud can be difficult to detect, but recognizing payment methods used regularly in scams can help consumers spot one sign of a potential problem.  

Scammers, including those in faraway locations, often request payment using one or more of the following methods:
  • Wire or money transfers,
  • Prepaid money cards, or
  • Gift cards
Scammers often choose these payment methods because once they receive the money, it is virtually impossible for consumers to trace or reverse the charges. Whether it’s a wire transfer, a reload card, or a gift card, avoid using these types of payment methods when conducting a transaction with a stranger to protect yourself from scams.
Some con artists also use fake checks, trying to pass off a counterfeit business or cashier’s check as legitimate. The scammer devises a clever story to trick consumers into depositing the worthless but legitimate-looking paper check in order to convince the consumer to wire funds or provide prepaid cards in return. For example, a con artist may “hire” a consumer for a job and then send the consumer a (phony) check for $200 more than expected. The con artist asks the consumer to return the extra money right away by sending a wire transfer for $200. Again, the request for a wire transfer is the consumer’s clue to end the conversation.
The Federal Trade Commission (FTC) recently amended the Telemarketing Sales Rule to prohibit telemarketers from accepting certain payment methods often used by con artists. For example, the rule bans telemarketers from requiring payment through a wire or money transfer, which allows the transfer of cash from a consumer in one location to a person or business in another location. Western Union and MoneyGram are examples of companies that provide these “cash to cash” services.
Under the revised telemarketing rule, other banned payment methods include certain cash reload mechanisms like MoneyPak, Vanilla Reload, and Reloadit, which essentially act as prepaid debit cards. Once the card and/or PIN numbers are given to someone else, that person can wipe all the money off the card. (Major providers of cash reload products now use a “swipe reload process,” which the FTC says is a safer method not affected by its new ban.) The rule also prohibits telemarketers from using “remotely created checks” to withdraw money directly from consumers’ bank accounts.
Consumers who question the legitimacy of a telemarketing call can check the Ohio Attorney General’s website to see if the caller is registered as a telemarketer in the state. However, there are exceptions regarding who needs to be registered in Ohio. Consumers also can look up charities on the website to see if a call is coming from a charitable organization registered with the Ohio Attorney General's Office.
If you have questions or if you suspect a scam, contact the Ohio Attorney General’s Office by calling 800-282-0515 or visiting