Scams involving the scammers being paid through gift cards have increased dramatically recently. According to the Federal Trade Commission (FTC) in the first nine months of 2015 only 7% of scams involved payments through gift cards while this year during the first nine months of 2018 26% of scams involved gift card payments. Gift cards are a method of choice for scammers because they can be easily purchased by scam victims and payment made to the scammer by merely providing the scammer with the card numbers, making the completion of the scam quick and anonymous. A wide variety of scams presently being perpetrated, such as the grandparent scam, IRS scams claiming overdue taxes and tech support scams use gift cards as the method of payment. Often the scammers will quickly turn around the gift cards by using them to purchase third party gift cards such as for iTunes or Google Play which the scammers then sell on the Dark Web, that part of the Internet where criminals buy and sell illegal and stolen goods.

Now, after more than a year of negotiations between the Attorneys General for New York and Pennsylvania, Wal-Mart, Target and Best Buy have agreed to make changes to their gift card policies in order to reduce gift card fraud. While the precise changes vary from company to company, all of the policy changes result in reducing the amount of money that can be placed on individual gift cards as well as the total that can be loaded on to multiple gift cards at the same time as well as restricting the redemption of retail gift cards for third party cards such as iTunes and Google Play. Finally, and perhaps most importantly, Wal-Mart, Target and Best Buy all agree to enhancing the training of their employees to recognize warning signs of gift card scams and warn their customers.

TIPS

Perhaps the best way to avoid becoming a victim of a scam using gift cards is to remember that the IRS, legitimate tech support companies, lawyers, hospitals and utility companies do not accept gift cards as a form of payment. Whenever you receive a phone call, text message or email asking for payment for any type of service or debt by gift card, it is a scam. It is as simple as that. It is also important to remember that many of these scams begin with phone calls that may appear to be from a legitimate source, but that it is a simple matter for a scammer to “spoof” a telephone number to trick your Caller ID into indicating that the call is legitimate, when it is not. If you do get a call asking for money for any purpose, you can never be sure if the call is legitimate. The best course of action if you think the call might be legitimate is to hang up and call the company or agency at a telephone number that you know to be accurate where you can confirm that the call was a scam.

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