Cash strapped? Falling for a card cracking or cell phone credit muling scam will make you even poorer

scam-alert-pic-150x150I remember how it was being a broke college student, digging around under the car seats for enough change to buy a soda or a small bag of chips. If someone had come along offering me “free” money, I’m sure I would’ve been tempted.

Unfortunately, nothing really comes for free–there’s always some kind of catch. There are a couple of scams out there targeting cash-strapped college students. If you play along with one of these scams, the criminal who talked you into it will end up with the “free” money and you’ll be left holding the bag.

Card Cracking

Card cracking is a variation on the classic check depositing scam (other variations include secret shopper, work-at-home and “this will help pay advance fees for the sweepstakes you didn’t really win”). The scam artist convinces a victim to give access to their debit card and PIN. The scammer then deposits a check (or checks) in the victim’s bank account and withdraws a portion of the money, letting the victim keep the other part.

Then the victim discovers that the check was counterfeit or stolen. By the time the victim finds out, the scam artist is long gone. The victim is then in trouble for depositing a counterfeit check and must pay the bank back for whatever was taken out. In some cases, the victims are recruited using social media.

A web search finds a number of news stories about the scam, as well as a warning from the state of New York. I’ve also heard anecdotal reports of the scam occurring in Corpus Christi, Texas.

Cellphone Credit Muling

The Federal Trade Commission is warning about a scam targeting college students known as credit muling.

With this scam, the crook pays the victim to open up several accounts with cell phone providers–accounts that come with new phones, tablets or other electronic devices. The scammer reminds the victim to cancel their accounts within the 15- or 30-day time limit. The scammer then takes the phones or other electronic devices, unlocks them so they can be used with other services, and disappears.

The victim then discovers he or she has been tricked–you have to return the phone before you can get out of the contract. So the victim now has to pay for the phones he or she gave to the scammer, as well as monthly payments to the carriers until the contract is over.