Recently a 63 year old Wyoming man was scammed out of $500 by scammers who had texted him to tell him that he was entitled to $350,000 in “relief funds.”  In order to claim the windfall, all he had to do was pay a $1,500 transfer fee through gift cards.  After paying the first installment of $500 in Walmart gift cards, he realized he had been scammed and did not send the rest of the money demanded.  Scammers are big fans of gift cards because they are easy to purchase, easy to send to the scammer and impossible to trace to the scammer.  It is not even necessary for the scammer to be in possession of the actual gift card to use it.  Sending the gift card numbers or taking a picture on your phone and transmitting it to the scammer is sufficient for the scammer to use the gift card to buy things that can then be sold and converted into cash.

TIPS

Payment by gift card is a common feature of many scams and while we may think that the Wyoming man should have recognized that no one is actually giving away $350,000 for a $1,500 transfer fee, the biggest red flag that the whole thing was a scam was the demand for payment through gift cards.  Anytime anyone approaches you with a business transaction in which you are asked to pay through gift cards, you can be confident that it is a scam.  The IRS has even had to post on its website that it does not accept gift cards as payments.  A similar common denominator in many scams is when you are sent a legitimate appearing check for more than what is owed you for something and asked to deposit the check and wire the difference back to the person sending you the check. The check that is sent to you is counterfeit and if you wire money from your bank account, you are sending your own money in a way that you will never be able to retrieve it.  Never accept a check for more than what you are owed with the intention of wiring the excess funds back to the person who sent you the check.

It would be helpful if more companies that sell gift cards would routinely train their employees to recognize scams and require them to ask their customers when larger gift cards are being purchased as to the reason for purchasing the gift cards.

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