Debit card for kids working in NYC's Summer Youth Employment Program tied to fraud investigation
NEW YORK (WABC) -- A debit card that is supposed to pay New York City kids working in a summer youth program is now at the center of a fraud investigation.
Officials say it all started with a trend on social media that led to $17 million ending up in the wrong hands. The New York Times was first to report the investigation.
Instead of weekly payments at minimum wage, due to an error, the cards were apparently able to access unlimited cash from money machines for payees of New York City's Summer Youth Employment Program.
The program says it helps 100,000 young people a year with financial literacy, but this year the ATM card the teens use to withdraw weekly pay is at the center of an NYPD investigation.
The scam involving the pay cards took social media by storm.
An influencer warned kids to stop sharing their information after TikTokers posted about the ability to withdraw a stream of cash led to cards being bought, sold and compromised.
Apparently, there was a limit on what you could with withdraw per transaction. That was $200. But there was no cap on what you could take out.
ATM World Corp. says their records show the same card, and the same ATM was hit up hour after hour, and the person took out $43,000.
"Sometimes it was five to 10 transactions, a few times we saw 100 to 200 transactions consecutively," said Youserf Mubairrez, the COO of ATM World Corp.
Mubairrez said they saw a huge uptick of frenzied withdrawals for three straight days and his machines alone spit out half a million dollars since Friday.
The NYC Department of Youth and Community Development spokesman said they are deeply disturbed by scammers preying on participants.
"No taxpayer dollars have been lost, and DYCD quickly launched an investigation with the vendors who oversee the SYEP pay card system to make sure our participants' earnings are as secure as possible," the spokesman said in a statement.
Earning a minimum wage of $16.50 an hour is good news for teen Julmide Mentor, who is learning to write computer code as a participant in the summer program. She hopes her pay card still works.
"I haven't withdrawn anything yet, so it's today that I was planning on withdrawing my first pay check," Mentor said.
The question remains, if they put a withdrawal limit on how much you can take out per transaction, why was their an unlimited pool of resources to defraud?
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