FTC Warns of New Phone Scam

This article came across my email this morning and while it’s not super relevant for prepaid phone customers (it actually deals with phone contracts), I wanted to go ahead and spread the word because everyone knows someone on a phone contract. The FTC has sent out a warning to consumers of a practice called ‘credit muling’ with cell phone and wireless contracts. The scam involves paying a victim cash to open up a wireless contract (or two, or five) and telling them that they can cancel the contract within the allotted time–usually a couple of weeks to a month. The scammer then takes the devices, unlocks them, sells them (for quite a pretty penny) and disappears. The victim, meanwhile, is left holding the bag as the contracts can’t be cancelled without returning the phones. Not only do they owe for the phone, but the victim will also have to pay the monthly service fee for the duration of the contract (or even worse, pay the exorbitant cancellation fee). Worse case scenario, if they cannot pay then it goes to collections and damages the victim’s credit for years to come. It’s a pretty terrible scam and, while I’d like to think that most people are smart enough not to sign a contract for a stranger, sadly that isn’t the case. If you know someone who has had this happen to them or has been approached with this scam, then you can contact the FTC and they may be able to help. Just one more reason why no-contract prepaid phones are better and safer, I suppose…]]>

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