You might be interested in this information on Chargeback Gurus, a website oriented towards helping merchants better understand the schemes fraudsters use against legitimate merchants.
What Is Prepaid Card Fraud?
>>Prepaid fraud occurs when a fraudster uses stolen prepaid card information to make a purchase or buys a prepaid card with other stolen payment credentials. Prepaid cards are also a common method of payment used in financial scams.
While reloadable cards do require the user to provide some personal information, prepaid cards often aren't easily tied to specific identities. That makes it easy for fraudsters to use them for money laundering. They can purchase prepaid cards with stolen funds, then use them to make untraceable purchases anywhere they like.
As usage increases and prepaid card products become more sophisticated, we may also see greater use of these cards to conduct criminal activity. According to law enforcement agencies, these cards have already been used in drug trafficking operations and in preparation for terrorist attacks. However, their most common use is still simple financial fraud.
In the U.S., there were 38,000 reported cases of crime in 2019 that involved the use of prepaid cards, with the combined losses totaling $103 million.
Of particular interest to fraudsters is the fact that reloadable cards can be used at ATMs, making it possible to convert stolen digital payment credentials into cold hard cash with relative ease.
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https://www.chargebackgurus.com/blog/prepaid-card-fraud
In just 3 years combined prepaid debit card losses grew $196 million. Prepaid debit losses are expected to surpass $300 million by end of 2025.
