Dads, listen up. We’ve got a consumer alert!
Scammers have found yet another way to exploit people who need money fast, and this time they may be targeting cash-strapped college students.
Here’s the scam: They pay them to open wireless contracts that include new smart phones, tablets and other mobile devices. The scammers target people to act as “credit mules.”
Here’s how it works: A scammer — also known as a “recruiter” — asks the targets — also known as mules — to buy a number of phones under separate contracts. The recruiter pays the mules and reminds them to cancel the contracts within the allotted time — typically 15 to 30 days. But the recruiter takes the phones, unlocks them, and sells them for profit.
When the mules try to cancel the contracts, they realize they’ve been duped. Regardless of what the recruiters told them, they can’t cancel the contracts without returning the phones. So the victims are not only on the hook to pay for the phones, but they also have to pay the monthly service fees for the length of the contracts. If they can’t pay, the accounts go to collection and their credit ratings suffer. Negative credit can affect their ability to get credit, insurance, a job, and even a place to live.
The scammers illegally “unlock” the phones. A single unlocked phone with no contract can be sold on the street in the U.S. for hundreds of dollars — and overseas, for thousands.
So, dads, warn your kids nieces, nephews…
If they get approached by someone offering them cash to sign a wireless contract stay away.
If it’s already happened, the Federal Trade Commission wants to hear from them.