How to Avoid Holiday Season Gift Card Scams

It’s the time of year where many scams are prevalent, however lately – gift card scams seem to be popping up and affecting consumers more and more this holiday season. Continue reading to find out how to protect yourself and your finances from this type of fraudulent transaction.

If you ever receive a call, email, or text from someone asking to be paid via a gift card or to buy something by putting money on a gift card and then giving them the numbers on the back of the card – they are attempting to scam you. Before you read any further, know that a legitimate business or government agency will never ask to collect payment via gift card.

Why do fraudsters attempt to collect payment in the form of gift cards? Because they are easy to get, and there are virtually no buyer protections. In other words, it’s basically like using cash. And when the money on the gift card is gone, it’s gone.

How does a gift card scam work?

  • You’ll get a call, email, or text letting you know you’ll need to pay as soon as possible, and that the only way to do so and help is to buy a gift card.
  • The requestor will almost always tell you exactly which gift card to purchase – typically eBay, Google Play, Target, iTunes, and so forth. You might even be asked to purchase the gift card at a specific store, such as Target, Walmart, CVS, or Walgreens. The scammer may ask you to purchase various gift cards at different stores too (this is so the cashier won’t be suspicious).
  • Once purchased, you’ll be asked for the gift card number and PIN. These two items will give the scammer access to all the funds that were loaded onto the card, and once they have that – the money is theirs and they can use it immediately with no way for you to get it back.

If you are thinking the steps listed above are pretty obvious and how could someone actually fall for this type of scam – keep reading.

How scammers convince consumers to purchase gift cards and get away with it:

  • The caller states they are from the government, such as the IRS or Social Security Administration. They’ll tell you that you owe taxes or need to pay a fine, and the only way to do so is with a gift card.
  • The caller says they are with Apple or Microsoft tech support, and that there is something wrong with your device. They’ll also tell you that in order to fix it, you’ll need to go out and purchase a specific related gift card.
  • Online dating sites are another hangout for gift card scammers. If you meet and chat with someone via a dating site or app, and then after they build a connection with you – they tell you they need help and the only way to do so is with a gift card.
  • The scammer spoofs the phone number of a family member or friend close to you, and tells you they’re in trouble and that the only way to help them is to go out and purchase a gift card. If this happens to you, hang up and actually call your relative or friend on your own and ask if they truly need help.
  • You are contacted that you won a prize, however in order to redeem it – you need to pay contest fees with a gift card. This will never happen with a legitimate contest, and – did you ever enter one to begin with?
  • You get a call from your “utility company” threatening to cut off your service unless you pay them with a gift card.
  • Someone contacts you and says you will receive a check in the mail – however it ends up being more than you were told you would be getting. The sender contacts you again and tells you to deposit the check into your bank account, and give them the difference on a gift card. There are two problems here – the gift card payment, and also the check being deposited is typically fake and you may be held liable for that amount by your bank as well.

Here are a few ways to ensure gift cards are used properly and legitimately:

  • Remember that gift cards are for gifts. You should never use a gift card to pay someone.
  • Purchase gift cards at stores you know and trust – don’t buy them online or through a gift card auction site, as they may be fake or stolen.
  • Look the gift card over before you purchase it. Ensure there are protective stickers that have not been tampered with, and make sure the PIN on the back isn’t visible.
  • Keep your receipt after your gift card purchase. This will prove that money was loaded onto the card if you ever need it, as well as the gift card’s ID number will be listed. If you ever lose the gift card, you’ll be able to file a report to close that particular card.

The moral of the story: This holiday season (and any time), be mindful of those who might be trying to scam you into purchasing gift cards. Always remember, legitimate organizations will never ask to be paid in this manner.

THINK First because There’s Harm In Not Knowing!

 

Article Source: ftc.gov