On a regular basis, I hear many variations of this scam. For numerous reasons, someone may tell the victim, generally by phone or email to go purchase a prepaid card and provide them the information from that card. This scam may involve anything from Bills Owed, Bail Money, Warrants, IRS Payments, Computer Viruses, Curses (yes curses), Online Purchase, Utilities, Payments or any imaginable variation.
The first red flag here is NO LEGITIMATE transaction would REQUIRE you to purchase prepaid cards. The reason they are requesting prepaid cards is because once you provide them the information they drain them and there is little to no way to trace it. Your money is gone and nobody can get it back for you.
The second red flag is ALMOST no legitimate bill collector would contact you only by phone or email. You would normally get something by mail in addition to phone calls or emails. These places are just assuming you'll fear their threats of jail, suspension of service, etc and give them what they want.
If you receive a call like this and think it's real, agree to their terms, then hang up. Now go look up the company name in a phonebook or reputable online lookup service and call them back to see if you owe money. Most likely you do not, refer to red flag number 1. Never provide or verify any information to them. If they are real they would already know the information.
An easy way to avoid becoming victims of scams is to never answer phone calls from numbers you don’t recognize and be very careful if you do because any phone number can be faked. Anyone who really needs to talk to you will leave you a message, never call back the number they provided. Always look it up. For emails, never click links in an email. Always look it up.
This information should be shared with all, especially the elderly and those that may easily be tricked. If you or someone you know has been a victim of such crime it's important to report it, keep in mind these frauds are normally originated overseas and there is little local law enforcement can do, reporting it is still important.