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 agency 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 identified and froze gift card funds that would have been sent to scammers.  However, Walmart did not refund the cost of the gift cards to the targeted victims of the scams.  Consequently the Department of Justice filed a legal action to get those frozen gift card funds returned to the potential scam victims who purchased them.  This legal action has now been settled and Walmart is returning  the frozen $3,958,060.84 to their customers who purchased the gift cards with those funds.  People who bought  Walmart gift cards between April 1, 2016 and July 31, 2017 that were identified as going to scammers and were frozen can now apply to get their money refunded.  If this applies to you, here is a link you can use to apply for your refund. https://kccsecure.com/walmartgiftcardremission/Claimant  The deadline for applying for a refund is July 14, 2023.

TIPS

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.

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