gIft card scams are on the rise and can happen just yards from your place in the queue.
In the first nine months of 2021, nearly 40,000 consumers reported losing $ 148 million in gift card scams, according to a new report from the Federal Trade Commission (FTC). That’s more than what’s been reported for the whole of 2020, and may be only a fraction of the problem, as less than 5% of gift card scam victims report the crime.
Here’s an example of how a gift card scam is triggered: You receive a phone call from someone claiming to belong to a government agency, like the Social Security Administration. They say your bank account will be frozen for investigation and ask you to buy gift cards to avoid being arrested.
More and more people are getting ripped off through gift card schemes and victims are losing more money. In 2018, the median amount victims lost to a gift card scammer was $ 700. This year, it’s $ 1,000.
Seniors are more susceptible to these scams, according to FTC data. Among Americans aged 50 to 59, 19% of fraud reports involved gift cards or reloadable cards. For Americans 80 and over, that number climbs to 30% of all fraud reports.
Here’s how to identify a gift card scam and how to avoid getting ripped off.
How gift card scams work
Here are a few more examples from the FTC of how such a scam might work:
- You receive a phone call from someone claiming to be from Amazon or Apple. They claim that there is a security issue with your account, and the only way to fix it is to buy gift cards and send the caller photos of the backs of the cards.
- Someone pretending to be your boss is texting or emailing you asking you to buy gift cards. They say they’re stuck in meetings or it’s an urgent customer need.
Scammers often specify which gift cards to buy and where to buy them. Target, Google Play, Apple, eBay and Walmart were the stores most frequently cited in gift card scams reported to the FTC.
Sometimes victims are asked to make multiple purchases in different stores, while some scammers keep their victims on the phone while they complete the task. As soon as you provide the gift card number and any kind of security code present on the card, the scammer can access these funds.
Unlike other forms of fraud, where crooks can access money through your bank account, credit card, or debit card, gift card scams force you to do the job for the scammer. , which makes it difficult to identify the real culprit. In addition to using gift cards, which can be more difficult to track than other forms of payment, scammers often use spoofed (bogus) phone numbers that may appear legitimate, appearing on the company’s identification. calling as a familiar number or government agency name.
It’s easy to say that you are savvy enough to avoid being exploited by a scammer. But in the heat of the moment, it’s too easy to get upset. After all, it can be terrifying to learn that your bank accounts could be locked out or you could be arrested.
How to avoid gift card scams
Retailers often train their employees to spot potential victims of gift card scams. “We have increased in-store signage to alert our customers to common gift card scams, and we have increased training for team members so they can keep an eye out for potentially distressed customers who are purchasing gifts. gift cards and intervene as needed, ”Target said in a statement to Councilor Forbes.
But a gift card purchase cannot make a cashier suspicious, especially during the holidays when many buyers buy them as valuable gifts.
The best way to avoid gift card scams is to remember that no legitimate business or government agency will require payment by gift card. If in doubt, hang up the caller or prevent them from sending you emails or texts. (Don’t delete their posts, however, we’ll get to that in a bit.)
If you or someone you know is the victim of a gift card scam, be sure to save your receipt as it contains identifying information about the gift card. Then perform these actions:
- Contact the retailer who issued the gift card. The FTC maintains a list of popular retailers and how to contact them about gift card fraud.
- File a police report. The FTC notes doing this can help you get help from the gift card issuer.
- Report the fraud to the FTC. Include as much information as possible, including times, dates, phone numbers or email addresses, and screenshots of messages. The FTC cannot resolve individual cases, but it is investigating activities and sharing reports of fraud with relevant local law enforcement agencies.
- Report the fraud to your state attorney general. Much like reporting fraud to the FTC, your state’s attorney general investigates larger fraud issues rather than resolving individual cases.
Even if you don’t fall for the trap, take a few minutes to file a report with the FTC and your attorney general. This could help catch a fraudster and prevent them from victimizing others.
Read more: How to avoid getting ripped off while on vacation
Scammers Prefer Target Gift Cards
The FTC noted that gift card scams often involved a single retailer: Target.
Target gift cards have been reported twice as many times as any other brand of gift cards. Thirty percent of people who got Target gift cards for a scammer said they lost $ 5,000 or more.
“Unfortunately, gift card scams are a persistent problem in the retail industry,” Target said in its statement. “Target takes these crimes very seriously and we use a holistic, multi-level approach to mitigate fraud that includes technology, team member training, and working with law enforcement.
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