Prohibited Payment Methods | Attorney General - State of Colorado

Prohibited Payment Methods

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In late 2015, the Federal Trade Commission amended its Telemarketing Sales Rule (16 CFR 310) to include prohibitions on certain types of non-traditional payment methods insisted on by certain telemarketers.  As of June 13, 2016, telemarketers are prohibited by the TSR from:

  • Using of remotely created checks and payment orders (this a type of check which is created by the telemarketer using the consumer’s personal and financial account information and which is not actually signed by the consumer, but typically bears a statement indicating that the customer authorized the check);
  • Using “cash-to-cash” money transfers – provided by companies like MoneyGram, Western Union, and RIA;
  • Accepting as payment “cash reload” mechanisms – these are referred to as general purpose reloadable (GPR) prepaid cards (such as MoneyPak[1], Vanilla Reload, or Reloadit).  The consumer can use the PIN code of the purchased and loaded card over the telephone or Internet to transfer the funds onto any existing GPR held by the telemarketer.

These are considered non-traditional payment methods because, unlike checks or credit cards, they afford little or no protection for consumers seeking to cancel a transaction or get a refund of their money.

Consumers should be immediately suspicious of any telemarketer who seeks payment for goods or services through any of these non-traditional methods.

If you believe you have received a fraudulent call or wish to report telemarketing fraud, file a report with the Colorado No Call Registry and the National Do Not Call Registry.

If you believe you have been victimized by a scam or wish to report suspicious activity, please file a report here.

[1] Green Dot Corporation (‘‘Green Dot’’) announced it would discontinue its MoneyPak cash reload mechanism in favor of a swipe-reload process—where a consumer presents his/her existing GPR card at the register and loads funds directly to the card.