The Federal Trade Commission (FTC) recently reported that in the first nine months of 2021, consumers lost 148 million dollars to scams in which gift cards were used as the payment method. This amount was more than in all of 2020. 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.
In many instances the scams involved scammers posing as large companies or government agencies such as the IRS demanding payments. It is important to remember that no legitimate company and no government agencies asks for or accepts gift cards as a payment method so anytime you are asked for a payment by gift card, you can be confident it is a scam.
Large retailers such as Walmart and Target are the most common places where scammers send their victims to purchase gift cards to provide to the scammers. In 2016 Walmart began tracking the gift card balances from outside the country and developed a system to recognize fraudulent patterns involving these gift cards. Using this technology Walmart has identified and frozen gift card funds resulting in the savings of millions of dollars to Walmart customers who otherwise would have become scam victims.
Gift cards are a favorite method of payment for scammers because the payments are completely anonymous and unlike credit cards where a fraudulent payment can be reversed, once a scammer obtains the numbers of a gift card, the money is gone.
Often the scammers, many of whom are perpetrating the scheme from overseas pose as the IRS, the FBI or some other government agency and pressure their victims into paying them for some non-existent debt by way of a gift card. It is important to remember that no governmental agency ever demands or accepts payment by way of gift cards.
You also should remember that even if your Caller ID indicates that the call is from the IRS or some other governmental agency, scammers using a technique called “spoofing” can manipulate your Caller ID to make it appear that the call is legitimate when it is not.
For those of you receiving the Scam of the day through an email, I just want to remind you that if you want to see the ever increasing list of Coronavirus scams go to the first page of the http://www.scamicide.com website and click on the tab at the top of the page that indicates “Coronavirus Scams.” Scamicide has been cited by the New York Times as one of three top sources for information about Coronavirus related scams.
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