While gift cards are a popular way to show a loved one you appreciate them, they are also commonly used to scam people. According to the Federal Trade Commission, one in four people who report fraud and losing money were tricked into sending gift card payments to scammers. Also, because so many frauds aren’t even reported to the government, the number could be significantly higher. Knowing how scammers use gift card payments to defraud others will help you protect your finances.
Why They Use Gift Card Payments to Trick Consumers
Scammers favor gift cards as they’re easy for people to find in a store and buy. They also usually have less buyer protection compared to a debit or credit card. This means that the scammer gets quick cash and the transaction is usually irreversible. Best of all, they remain anonymous so it’s harder to prosecute someone for this crime.
How Gift Card Payment Scams Work
Usually, these gift card scams start with a phone call from a business such as Apple or a government authority such as the Internal Revenue Service. They are told these gift card numbers will allow them to resolve a tax debt or fix a security problem on their phone.
The scammer will ask for specific gift card brands and tell them where to buy the gift cards. Most likely because they know which cards purchased from a specific store have worked most effectively in the past. They even call these gift card numbers security codes to make the scam more believable. This has people thinking they are actually required to keep using their phones, bank accounts, etc. However, the only thing the scammer is doing is taking the money on the card.
Some elderly Americans have reported scammers from the supposed Social Security Administration saying their bank accounts are frozen because of an investigation. Because of this, they’re told to buy gift cards to avoid being arrested and to regain access to their finances.
How Scammers Avoid Being Detected
Oftentimes the scammer will send someone to different store locations to make multiple purchases. They even will tell someone to stay on the phone the entire time, so they don’t call someone that may help them realize that this is a gift card payments scam. They may even coach someone on what to say to a cashier if they ask questions about why you’re purchasing so many cards. Ultimately, they don’t want anyone influencing the person being scammed and oftentimes these store workers are the only people that can help them before they make this financial mistake.
Learn More About Gift Card Payments Scams
When someone demands that you pay them with a gift card, know that this is a scam. At Anti Fraud News, we inform our readers about recent scams and help them avoid being a victim of fraud. If you believe that you have been a victim of a gift card payments scam, report the card number with your receipt to the card issuer as soon as possible. You also should report your experience to the Federal Trade Commission too.