Gift cards are the most common payment method that scammers seek from their targets, according to the Federal Trade Commission (FTC). Fraudsters will pose as someone else and convince people to share gift card information as a “payment” and will then quickly drain the funds from the card. Gift cards are popular with scammers because they are accessible for people to purchase, their use is anonymous, and once the money is spent, the transaction is irreversible.
Common Scenarios
Imposter Scams
Fraudsters pretend to be a representative of a government agency, or a well-known company and claim you owe a debt or need a service.
- The fraudster claims to be the Social Security Administration, IRS, Drug Enforcement Agency, or other government agencies and they tell you that your bank accounts will be frozen as part of an ongoing investigation. They instruct you to buy gift cards and share the serial and personal identification (PIN) numbers on the back of the gift cards. They explain this needs to happen for you to regain access to your money, or that a ‘secure account’ can be opened to clear your name, or to make quick payment to avoid arrest.
- The fraudster poses as a representative from a well-known tech company like Amazon or Apple and asks you to send pictures of the numbers on gift cards to fix a supposed security problem with your account. Sometimes they call the numbers “security codes,” but the only thing the numbers are good for is accessing the money on the gift card.
- The fraudsters call and claim to be from a legitimate power or utility company (such as Pepco, Washington Gas, etc.). They threaten to cut off your utility services if you do not pay immediately. Most often they will ask for gift cards as payment.
Tip Legitimate businesses, companies, and government entities will NEVER ask for gift cards as a payment method. Only scammers will ask you to pay fees, back taxes, or bills for services with gift cards. Never share any personal or gift card information as once the codes have been provided, the funds on the gift card are gone.
The fraudsters may pretend to be a relative in need.
- Fraudsters will pose as a relative in need and will ask you to urgently help by purchasing gift cards but to not tell anyone. Often with this scam they will advise you not to contact any other family members.
- They will use several scare tactics stating that the relative has been involved in a car accident, harmed, or injured another person, or is even in jail. The fraudsters request gift cards to help the family member and to rectify the issue at hand.
Tip Do not provide any gift card information. If you fear a relative is in trouble hang up and try contacting them directly with your own contact information.
- The fraudster pretends to be an official stating you have won a prize. They may say that to claim your winnings you need to pay an upfront fee with a gift card. They may also ask you to visit an unknown website and fill out additional personal information. Once you click through this website scammers can gain remote access to your computer, install malware, and use your data for identity theft.
Tip You cannot win a prize if you did not enter a sweepstakes or lottery. You will never have to pay fees up front for any winnings and never with a gift card. Do not provide any personal information to anyone you do not know over the phone and delete any unsolicited emails or text messages.
Tampering Scams
The fraudster tampers with an in-store gift card.
- Fraudsters will go to stores (like CVS, Walgreens Target etc.) scratch off the film strip on the back to retrieve the PIN and will cover it back up with replacement stickers. Later, they enter the card numbers and PINs into a computer program that will repeatedly check the retailer’s website and let them know when someone buys and loads a compromised card. They will spend or transfer the money on the card before the buyer or gift recipient has a chance to even use it.
Tip Carefully examine any card you buy at a physical store for signs of tampering. It is safer to buy from places that keep gift cards behind the counter. If possible, register your card with the retailer so you can track and report any issues.
Remember that gift cards are for gifts only, not for payments. If you paid a scammer with a gift card, tell the company that issued the card right away. Keep the card and any receipts you have.
- If you encounter a gift card scam, report it to the FBI’s Internet
Crime Complaint Center.
- You can also file complaints with the Federal Trade Commission at 877-382-4357 and the Consumer Financial Protection Bureau at 855-411-2372.
Sources:
Scammers prefer gift cards, but not just any card will do | Federal Trade Commission