Dinah Keck didn’t realize the caller was a crook. The caller told the 70-year old, who lives near Ann Arbor, Mich., that she had won $3.5 million dollars in a lottery.

All she had to do was pay $3,500 to cover administrative fees and taxes and the check would be on its way. Those payments would be made via Green Dot MoneyPaks – $1,300 upfront and then $200 a month.

Keck went to the store, bought the MoneyPaks and gave the “award company” the PIN codes to access $1,500.

Thankfully, she contacted the Better Business Bureau before she sent the bad guys any more.

“I will never see that money again,” Keck said. “I’m behind in paying all of my bills because of what I did.”

Scammers still use wire transfers and credit card numbers to fund their frauds, but cash-load PINS, like those used by Green Dot, have become the new preferred payment method.

“It’s an easy way for them to get someone’s money without being traced,” said Katherine Hutt, director of communications at the Council of Better Business Bureaus. “We’ve seen numerous cases where people have been defrauded out of thousands of dollars this way.”

The Better Business Bureau in St. Louis recently reported on a Missouri man who lost his life savings to prize scammers. Over the course of many months, he sent them $41,000 using Green Dot MoneyPaks.

How the scam works
A MoneyPak lets you go to a supermarket or drug store (more than 60,000 places nationwide) and convert cash into digital currency that can be loaded onto a prepaid debit card or added to a PayPal account.

The MoneyPak card you buy at the store is a deposit slip. It gives you access to that money via the 14-digit authorization code on the back.

“As soon as the victim gives the scammer that code, they use it to load all of your money onto their prepaid card,” explained Karen Hobbs at the Federal Trade Commission. “Then they can run to an ATM and get all of the money in cash or they go to an electronics store and buy things that are easily fenced. Once that money is offloaded, it is essentially irretrievable.”

A number of companies provide a cash-load service for prepaid debit cards. Green Dot is the leader in this industry and therefore the most requested by the bad guys.

Green Dot

Green Dot MoneyPak's have a warning highlighted in yellow cautioning users about fraud.

“We do not want people to be victimized by fraudsters who try to steal their money this way,” said Green Dot spokesman Brian Ruby. “We hope people will see the yellow warning that is now on the MoneyPak card, right above where you scratch to get the card number.”

“Use your MoneyPak number only with business listed at www.moneypack.com. If anyone else asks you for your MoneyPak number, it’s probably a scam. If a criminal gets your money, Green Dot is not responsible to pay you back.”

The prepaid card industry is keenly aware of the fraud problem and is working to thwart the bad guys.

“We’re setting up systems to identify when a prepaid card is getting several reloads via PINs followed immediately by cash coming off the card, especially when it’s in a foreign country,” explained Terry Maher, general counsel for the Network Branded Prepaid Card Association. “That would trigger an alert and the card could be blocked.”

Lies and more lies
MoneyPaks are now used for a variety of scams that involve an upfront payment for a service that is never performed, such as advance fees to get a loan, a grant or a credit card. 

They’re also a popular payment method for all sorts of prize, sweepstakes and lottery scams.

The con artist who called 67 year old Jean (she asked that we not use her last name) told her she had won a million dollars in the Publisher’s Clearing House Sweepstakes.

Jean, who lives near Cleveland, was skeptical, but she had entered the contest. The caller spent a lot of time talking to her about how the check would be presented on TV.

“I hope you’re not scamming me,” she told him.

“Oh no, we wouldn’t do that,” he said. “We’re the real thing.”

Jean says he was “very smooth” and had an answer to all of her questions. She remembers that he kept telling her someone from the Better Business Bureau would be there when the check was delivered.

By the time she realized she’d been duped, Jean had given the phone crook $5,000 loaded onto Green Dot MoneyPaks.

“That’s a lot of money,” she said. “If I can get the word out and stop just one more person from being taken, it’s worth it to me.”  

Be advised:  Publisher’s Clearing House does not operate this way. They never ask for money to claim a prize award.  In a fraud alert on its website, the company says:

“PCH employees would never contact you personally or in advance to notify you of a prize award.  Our prize awards are presented just the way you see in our popular TV commercials, ‘live and in person’ by our Prize Patrol, with balloons, champagne and check in hand - - and with no advance notification!”

Also, the Better Business Bureau does not help companies give out prize awards.

 “A lot of scammers use our name to gain credibility,” said the BBB’s Katherine Hutt. “We do not participate with any contest, lottery or giveaways.”

Remember: with legitimate contests you never have to pay to claim your prize. If there are any federal taxes to pay, that’s between you and the IRS.

Don’t get burned
The only reason to use a MoneyPak or other reload PIN is to add money to your own prepaid debit card, or PayPal account, or one that belongs to a close family member.

“You should never let anyone convince you to buy a reload PIN or MoneyPak and give them that authorization number,” warned Terry Maher with the prepaid card industry. “If anyone tells you that, it’s a guaranteed scam.”

 Should you fall for the slick pitch and realize you’ve been taken, call Green Dot right away. They may be able to freeze the funds on the scammer’s card, if it hasn’t been offloaded.

Better yet, know the warning signs of a scam and protect that PIN number just like you would cash – because that’s what it is: digital cash. Green Dot has these fraud prevention tips:

• Only use a MoneyPak with businesses on the approved list, found at www.moneypak.com
• Never give the number to a private individual

If you’ve been burned this scam, report it to the Federal Trade Commission, the Better Business Bureau, or Fraud.org. You may be able to help protect others.

More Information:
AARP: Beware of Green Dot MoneyPak Scams
FTC: Prize Offers
FTC: Using Money Transfer Services

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.

The number one red flag for any kind of scammer, but especially after a natural disaster, is that they come to you. Without a reputation or referrals, a grifter has to go cold-calling to drum up business. Squint your eyes carefully at anyone who comes knocking at your door, take their information, and don't get pressed into making an on-the-spot decision.

1. Don't pay in full up front
Never pay for more than 1/3 of the job before it's done. Otherwise there goes your security against work not completed or not done up to code.

2. Don't get rushed 
Someone who promises to start work right away or bump you to the head of the line if you pay in full, and then threatens that you won't be able to get anyone else to fix it if they walk away, is trying to push your buttons.

Slideshow: Sandy slams into East Coast

Superstorm Sandy made landfall Monday evening on a destructive and deadly path across the Northeast.

Launch slideshow

More money news:

• NYSE floor no longer vital for markets
• Major stock markets to reopen on Wednesday
• Sandy could impact unsuspecting used-car buyers
• Video: Storm insurance: Is your home covered?
• Sign up for our TODAY newsletter

Follow TODAY Money on Twitter and Facebook 

One of the biggest threats to your financial security is bad advice you could receive or investments you may make with a financial advisor. The Bernard Madoff case highlighted how important it is to do your homework, since many of the convicted swindler’s clients trusted him and never asked how their investments worked. 

In many instances of investment fraud, "90 percent of cases could have been eliminated if investors just asked and checked", says Lori Schock, director of the Office of Investor Education at the Securities and Exchange Commission. 

Checking out your financial advisor is critical  
A recent study by the CFP Board found more than half of certified financial planners have personally worked with an older client who has been subjected to unfair, deceptive or abusive practices when it comes to the financial advice they received or the financial products they were sold. "Older Americans have already given many years of hard work and dedication - raising families, serving in the military, building businesses - all to become one of our most financially secure generations," says CFP Board CEO Kevin Keller. "This survey reveals the pervasive financial abuse victimizing America’s seniors."

It is not only older Americans who should be wary about financial advisor scams. The CFP Board, a non-profit organization that oversees certification for financial planners, suggests investors take specific steps to avoid falling prey to financial abuse. Click ahead for their advice:

Always verify advisor's background 
Check out your advisor's employment history, disciplinary records, and registrations. Investment advisors are licensed to give specific investment advice and owe their clients what is known as "fiduciary duty;" that is, offering clients advice in their "best interest." Brokers, on the other hand, may merely execute suitable securities transactions for their clients. Understand the difference. Brokers are regulated by FINRA; investment advisors are regulated by the SEC and/or a state securities regulator; insurance agents by the state insurance commission in states where they do business; and certified financial planners by the CFP Board, the organization offering that certification. Visit  these sites to check your advisor: 

• www.finra.org/brokercheck
• www.adviserinfo.sec.gov
• www.nasaa.org 
• www.naic.org
• www.CFP.net/search

Know how advisors are compensated  

Advisors should disclose any conflicts of interest (or perceived or potential conflicts) that could impact their recommendations. Find out if a potential advisor is paid by an hourly rate, a flat fee, or a commission on the value of assets they manage for you or on the securities they sell. Also ask for a copy of their Form ADV Part II which outlines an advisor’s services, fees and strategies -- or look it up yourself on the SEC website.

Ask for pros and cons of each investment idea 
If you're only hearing the reasons why you should make the investment, you're not getting the full story. You may not know how to choose the right investment; that's why you hire an expert. But you should understand how the investments work. Your advisor should be able to explain the pros and cons of the investment strategy and actual investment products. Ask questions if you don't understand and don't hesitate to get a second opinion.

Pay attention to the paper trail 

 If statements only come on the advisor's letterhead, that's a red flag. You should get regular statements from independent sources, not only your advisor. Also, never leave blanks on paperwork you fill out. And request for final, submitted copies of paperwork for transactions. Copies for your personal records should always have the word "final" or "submitted" stamped on them.

Never make checks payable to an advisor directly 
Always make checks payable to the advisor's business or custodian - not the advisor personally. Don't put yourself in a situation that would give an advisor unlimited access to your money.

Ask if the advisor is audited regularly and if third parties regulate or supervise investments.

If you invest in limited partnerships, real estate, or non-traded securities, verify that the investment manager is audited annually by a reputable independent accounting firm. Also, ask if third parties regulate or supervise investments. You can find out if an investment (stock, bond, mutual fund) is registered with the Securities and Exchange Commission by going to the SEC's EDGAR database. Also check with your state securities regulator. Find contact information for the one in your state at www.nasaa.org. Also read the prospectus for the investment.

Don't make hasty decisions 
Don't make major investment decisions immediately after a significant life change, like a divorce or death of a loved one. Ask a trusted family member or friend to help you review materials and make decisions. But also consider fees and timing. Before agreeing to any transaction, ask about the charges you will incur and the exact timing involved.

Designate a financial power of attorney 
You overall financial plan should encompass some estate planning as well. A financial power of attorney may be even more important than a will. Designate a friend or relative you trust to handle your investments in case something happens and you are incapable of doing so yourself. The financial power of attorney document not only spells out your wishes - but specifically names who steps in - when it comes to your finances should you become incapacitated.

For more information on protecting yourself against financial abuse, go to www.cfp.net. 

You can learn more how to choose a financial adviser and about "Who's Watching Your Money" at yourmoney.cnbc.com. 

More money and business news:

• Bank fees soar as free-checking offers decline
• Crunch on this: America's favorite snacks
• Brain training may help elderly drive better
• Waffle on gay marriage isn't helping Chick-fil-A
• Video: A flat-tax lesson from Europe
• Sign up for our Business newsletter

The young man who showed up at Brendan Cullen's house in Port Orchard, Wash., claimed to be selling magazines to raise money for his school. If he sold the most, he said, he'd win a trip.

"He sounded sincere," Cullen remembered. "When a kid comes to your door you don't expect him to be trying to scam you."

Cullen wanted to help, so he bought a number of subscriptions for $60. But the magazines never came — not a single one. He called the number on the sales receipt but could never reach anyone.

"All I want is the magazines I ordered, and I'll be happy," he told me. "I just don't like getting screwed over like that."

Cullen filed a complaint with the Better Business Bureau, but he realizes he'll never get the magazines or his money back.

The BBB has already received more than 1,000 complaints about magazine sales so far this year, compared with 1,300 in all of 2011.

"We are very concerned about this," said Katherine Hutt with the Council of Better Business Bureaus. "We’re seeing a big uptick in complaints about aggressive door-to-door selling."

Every summer, kids from all over the country are packed into vans and taken from community to community to sell books and magazines. While some of them are legitimate salespeople with the proper licenses and permits, many are just trying to make a quick buck at your expense. Once they leave town, you can never find them.

Jeff Bowman, chief of police in Gearhart, Ore., sees it happen in his seaside city every year.

"There is no contest," he warned. "It’s just a gimmick to get your money. Their job is to sell you something.”

Bowman said he feels sorry for the kids because they don't make very much money for their work. In some cases, the handlers use intimidation to get them to increase their sales.

It's more than magazines
Deceptive door-to-door sales tactics are used year-round to sell all sorts of products and services: home improvement projects, security systems and monitoring, miracle cleaning products and even groceries.

"Unscrupulous marketers sometimes trick consumers into paying hundreds of dollars for items they don't want or can't afford," said the BBB’s Hutt. "Oftentimes, their presentations are so slick that consumers aren't even aware that they have actually made a purchase."

Virginia’s Department of Criminal Justice Services recently warned people about door-to-door salespeople selling alarm monitoring. The department’s Lisa McGee told me these salespeople are not licensed and use a variety of “unethical sales tactics” to confuse and deceive people.

"They may tell a homeowner that their neighbors have already signed up for the service when that's not the case,” McGee said.

They may also lie about cancellation policies or make it appear that they're with the homeowner’s alarm service, when they are not.

In St. Paul, Minn., Betty Loose got snookered by a door-to-door driveway repair scam. She was working in her flower garden when a young man walked up and offered to repave her driveway for just $350. He said they could offer that "discounted” price because they'd just finished a job in the area and had leftover asphalt.

Loose said yes, but she wanted to see the paperwork first. They said they'd take care of that once the work was done. They sure did. They handed her a bill for $2,000.

The 88-year-old widow knew she was being scammed, but she tells me that with two big guys in her kitchen she felt intimidated. So she gave them a check — which they cashed immediately.

"They wiped me out, but I paid for it," she said.

Adding insult to injury, the work was substandard.

“For that amount, they should have done the entire driveway," Loose said.  "Plus, it was a lousy job. A new driveway should look beautiful, and it looks horrible.”

She made repeated calls to the company, and someone did come back and made a few feeble attempts to fix the most obvious problems. But the work is still inferior and needs to be redone.

Loose filed a complaint with the BBB, but the company wouldn’t return her money. And without a signed contract, there wasn’t much else she could do.

ConsumerMan tips to protect yourself
It’s always risky to buy things from some unknown salesperson who knocks on your door. That’s why we have a rule in my house: We don’t buy anything this way, unless it’s a neighborhood kid we know. That may sound harsh, but it’s the smart thing to do.

There’s no easy way to know if that person at that doorstep is legitimate or a con artist. ID badges can be faked and receipts can list a bogus address or phone number.

The fact that someone shows up at your house without an appointment is a high-pressure sales tactic. If you have a hard time saying no to someone face-to-face, just don’t open the door. Tell them you’re not interested and ask them to go away.

Finally, never let an unknown salesperson into your house — not to use the bathroom, get a glass of water or make a phone call. It’s just not safe. If for any reason you feel in danger, call 911. 

More money and business news:

• No fair! Weak economy leads to adult sibling rivalry
• At $47M, home is most expensive ever sold in Miami
• Consumers getting a better handle on debt
• Video: Postal service reports $5.2 billion loss
• Sign up for our Business newsletter

Follow TODAY Money on Twitter and Facebook 

You think it’s hard to sell a house? Try selling a timeshare. It’s nearly impossible. That’s why con artists are working the market. They hope to cash in on owners who are desperate for help.

“There are tens of millions of dollars being bilked from people who are trying to unload their properties because they need the money,” says Lois Greisman, head of the Division of Marketing Practices at the Federal Trade Commission.

On Thursday, a Florida couple who ran Timeshare Mega Media and Marketing Group – a company that’s alleged to have defrauded thousands of people out of at least $2.7 million – settled an FTC complaint by agreeing never to work in the timeshare resale business again.

The FTC complaint alleges the company’s representatives told timeshare owners they had buyers lined up and waiting.

“In many cases, defendants begin the call by representing that they have a buyer for the consumer's timeshare unit and that the sale can be closed within a specified period of time, often 30 to 45 days. Defendants also typically tell consumers the price the purported buyer is willing to pay for the timeshare unit, which frequently is at or above the consumer's asking price.”

A fee, typically $1,996, was required to get the process started. But that money was supposedly refundable when the sale closed.

The feds says people who took the bait received a contract to “advertise” their timeshare. A clause in the contract specifically said the company did not represent or guarantee that the property would be sold or rented, directly opposite of what the telephone salesperson stated.

The FTC says many people who signed the paperwork assumed it was a sales contract. Those who questioned the contract’s validity were given the run-around and falsely told that a sales contract would follow.

The government’s complaint says the company never had any timeshare buyers lined up and never actually assisted anyone in selling a timeshare. People who demanded a refund rarely got one.

Protect yourself
Timeshare resale scammers target people who advertise condos for sale. But they also work off lists of timeshare owners. So any owner could get a called by a timeshare resale scammer.

“When someone contacts you out of the blue and they say, ‘Pay me now; time is of the essence. You’ve got to pay upfront to seal this deal.’ Don’t do it,” warns the FTC’s Greisman.  “That is as large of a red flag as you’re ever going to see.”

More information

• FTC consumer alert: Selling a timeshare through a reseller 
• Press release: FTC action results in ban against couple from telemarketing, timeshare resale services 

Zuma Press file

It pays to die. Check that. It pays to know who has died. If you then fleece the IRS, that is.

After reading on Forbes.com that the IRS paid $12.1 million in bogus tax refunds to 5,000-plus dead people for the tax year 2009, we won’t be using the word “victim.” See, we’re not sure who it applies to. The dead that had their identity stolen? The IRS? Every taxpayer? All of the above?

Interesting scam. Seems the Social Security Administration reports weekly to the IRS who dies. These reports are public, so persistent (note: not necessarily smart nor “computer-savvy”) criminals can then find out the deceased’s vital info, including Social Security number. They then need an Electronic Filing ID Number and boom.

The most open door in this unlocked house? All the claims were filed with the same Electronic Filing ID. It belongs to a Florida guy who says, naturally, he was paid $1,000 to apply for it, but never used it.

Forbes.com notes there have been no arrests yet.

More on the scam and a lengthy IRS response to Forbes.com’s inquiry is on their post.

We have one question: The filing ID always seemed a little stupid. We mean, the IRS got our SSN and bank info when we filed electronically. Why add another link in an obviously breakable chain? Aside from the last steps of e-filing seeming like filling out the same form at the doctor your filled out the last time and the last time and the last time, perhaps the IRS and Social Security Administration should worry about protecting a few, select pieces of information rather than add yet another to an already difficult-to-secure mix.