D.C. police are warning business owners of a prepaid debit card scam that could cost them thousands of dollars.
According to police, scammers are using stolen PayPal MasterCard prepaid debit cards to trick cashiers into using the cards for "offline transactions" without being activated.
The charges, despite the fact that the cards have no money of them, are quickly approved and the suspects can walk away scot-free for the time being. A little later, merchants receive "chargebacks" for transactions processed using these PayPal cards and are forced to pay the fees themselves.
Romeo Morgan who owns Morgan's Seafood on Georgia Avenue was slammed with an $18,000 charge after he was scammed by someone using the PayPal card.
"When I gave [merchant services] the card numbers, they said these cards are still on the shelf at 7-Eleven," Morgan explained.
Morgan is also president of Georgia Avenue Business Alliance, and said many other merchants in the area have fallen victim to these scams.
"These businesses are going to go out of business because they can't pay their rent, their water or their gas," Morgan said.
D.C. police recommend merchants personally contact MasterCard or PayPal prior to processing these cards to make sure they're valid.
If you have any information, call police at 202-772-9099.