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Why Do Scammers Ask For Gift Cards

Scammers Want Your Money On A Gift Card

Why Do Scammers Want Gift Cards?

Federal Trade Commission data indicates that consumers have reported spending nearly $245 million on gift cards that they used as payment to scammers from January 2018 through September 2020.

It happens for many reasons: IRS and Social Security impersonation scams. Scams where someone pretends to be a grandchild or other family member or friend in need. Tech support scams. Romance scams. An email from someone pretending to be your boss or minister who needs you to buy gift cards.

Individuals can lose several hundred or even several thousand dollars. The median loss by individuals was $820 from January 2018 through September 2020, according to an FTC analysis.

Kathy Stokes, AARP’s director of fraud prevention programs, said the scammers have a winning formula for getting someone into a heightened emotional state. Professional con artists often refer to getting the victim under the ether.

When you’re in this fog, you might not question why a Best Buy gift card can be used to pay a tax obligation to keep you out of jail or help you land a loan to cover bills.

“Once they have somebody under the ether, they can pretty much convince them of anything,” Stokes said.

“These are sophisticated criminal enterprises. It’s not one against one. It’s one against thousands.”

The crooks learn a bit about you in advance, often doing some research online, seem legitimate and can be extremely persuasive.

Consumers also can call the AARP Fraud Watch Network at 877-908-3360.

Why Do Scammers Want Gift Cards

Gift cards have become a very large industry, with worldwide sales in the billions. According to the Gift Card Retail Association, they have been the most popular gift for 14 years in a row. A recent AARP survey found that two-thirds of the public intended to buy them for the 2020 holiday season. With more people staying at home, gift cards have become even more popular during the COVID-19 pandemic.

Gift cards join the list of new methods scammers use to part victims with their money. As noted in a recent update of a BBB study on puppy scams, scammers now often ask victims to pay through Cash App or Zelle. In addition, BBB is beginning to receive reports where victims are asked to insert cash into Bitcoin ATM machines, and that payment method is a growing concern.

This BBB study looks at the scope of fraud involving gift cards as a payment method, the way various cards work, the scammers who exploit them, the efforts to combat the scams and the steps that the industry can take to further tackle this scourge.

As A Victim Of An Itunes Gift Card Scam What Recourse Do You Have

Let me state from the get-go, Apple will not refund your money. If you buy an iTunes gift card and give that gift card away for any reason, Apple will not refund you . . . and I dont blame them. I would not refund the value of the gift card either. If I may, let me explain by offering a personal story from experience.

If you fall prey to such a scam, dont go to Apple. Go to the Police.

About 20 years ago, a homeless man who walked with a heavy limp, held a sign outside of a local shopping mall that read, Will work for food to feed family.

Out of compassion, we give this homeless man $50 worth of groceries to feed his family, and I even told him to meet me at that same spot the next day, and I would help him find a job.

Not only did he not show up, but when I flagged down the patrolling mall security vehicle to inquire of the homeless man, the police told me that hes a known con-artist and does that for a living, fake limp and all.

Clearly I was the victim here and was conned. I fell for the scam.

Do I now have the right to go to the grocery store and demand that they refund me for the $50 that I spent on groceries for the homeless man? Of course not. Neither does Apple have any obligation to refund victims who fall prey to con-artists who convince them to purchase iTunes gift cards for them.

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About Gift Card Scams

Be aware of scams involving Apple Gift Cards, App Store & iTunes Gift Cards, and Apple Store Gift Cards.

If you believe you’re the victim of a scam involving Apple Gift Cards, App Store & iTunes Gift Cards, or Apple Store Gift Cards, you can call Apple at 800-275-2273 and say “gift cards” when prompted.

A string of scams are taking place asking people to make payments over the phone for things such as taxes, hospital bills, bail money, debt collection, and utility bills. The scams are committed using many methods, including gift cards. As the fraudsters are sometimes requesting codes from Apple Gift Cards, App Store & iTunes Gift Cards, or Apple Store Gift Cards, we want to make sure our customers are aware of these scams.

Regardless of the reason for payment, the scam follows a certain formula: The victim receives a call instilling panic and urgency to make a payment by purchasing Apple Gift Cards, App Store & iTunes Gift Cards, or Apple Store Gift Cards from the nearest retailer . After the cards have been purchased, the victim is asked to pay by sharing the code on the back of the card with the caller over the phone.

Never provide the numbers on the back of a Gift Card to someone you do not know. Once those numbers are provided to the scammers, the funds on the card will likely be spent before you are able to contact Apple or law enforcement.

Protecting Yourself Against Gift Card Scams

Why Do Scammers Ask for Gift Cards?

There are a number of ways to protect yourself from gift card scams, including keeping your redemption code safe and only using your gift card at checkout on eBay.com.

Scammers may contact you by phone, email, social media, or online and say they urgently need a quick sale. They may ask you to buy an eBay gift card and send them the gift card code as payment.

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The Gift That Keeps On Taking

Gift card scams are popular among cybercriminals, because they’re easy to buy, easy to send over, and hard to trace. However, there’s one crucial flaw with the scam: if you see someone ask for payment in gift cards, run away immediately!

Fortunately, there are legal and accepted ways to sell on gift cards you no longer want. For instance, there are entire websites out there that let people sell on their gift cards.

Image Credit: smile23/Shutterstock.com.

Bot Steals The Gift Card Balance

HOW THE SCAM WORKS: Hackers use a bot called GiftGhostBot to run through a stores online gift card balance check system looking for a matchmeaning a valid gift card number with an activated balance. Once the bot finds a match, hackers use the gift card themselves or sell it on the dark web.

RED FLAG: If you notice the balance of your gift card is gone, then contact the gift card issuer immediately.

WHAT TO DO: The best way to avoid this gift card scam is to simply use gift cards soon after you receive them, leaving little opportunity for a bot to find your gift card in the system.

I also suggest checking your unused gift card balances often. An easy way to do this is to load your plastic and egift cards into a gift card app or your smartphones mobile wallet, both of which allow you to perform an automated balance inquiry. Lastly, if you have an unwanted gift cardone that you are not likely to usethen sell it for cash. People who buy discount gift cards are often planning to use them quickly so that is another way to ensure gift cards are used by their rightful owners.

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Theft Of Gift Card Numbers

At times, thieves also obtain the money from a gift card before the recipient can use it, even if a victim has not provided the numbers on the back to a scammer or anyone else. An AARP survey from December 2020 found that over a third say they have given or received a gift card with no balance on it. It is possible at times that the cashier failed to authorize the gift card properly. But there are other possible ways to steal money from gift cards.

  • Many retailers have websites where you can log in, enter the numbers on the card, and check the balance to see how much remains. But some scammers have set up sites that impersonate those of actual retailers. When the victim enters the gift card numbers on these bogus sites, the crooks simply steal the numbers and redeem the money. When the victim tries to use the card, they find that there is no money on it. Industry members try hard to identify and shut down bogus sites, and BBB has warned about this type of scam.

Greg is a therapist in St. Louis. In December 2019, he received a Target gift card as a present. The card did not say what the value was, so he did an internet search for a site to give him the balance. At the top of the search results he found checktargetgiftcardbalance.com. The site seemed legitimate and professional-looking. Greg entered the numbers from the back of the card, but no balance appeared.

The industry has developed several responses to this problem:

What Do Consumers Need To Know About Gift Cards And How They Work

Beware Gift Card Scams [6 ways scammers ask for payment by gift card and why you should say NO!]

BBB interviews with victims reveal that while they often know that gift cards exist and can be used, victims may not fully understand how the cards actually work and how they are used by scammers. Similarly, those considering legal or policy changes in response to the increased use of this payment method may benefit from some brief background on the different types of gift cards available, the laws that apply to them, and the protections purchasers may have if any.

For example, the FTCs TSR prohibits requesting or receiving payment with a reloadable card, but does not currently prohibit payment by gift card. Therefore, it is important to understand the difference between the types of cards.

The category of gift card reflected in victim complaint data to BBB, the FTC, and the CAFC encompasses a variety of different products, but essentially there are two different types of cards available:

1) Open or closed loop cards with a specific value.

2) Prepaid or reloadable cards that are functionally debit cards and can be used at ATMs. Consumer Reports has a useful article covering the relative merits of these different kinds of cards.

Gift cards are different from debit cards, which draw money from a pre-existing bank account, or credit cards, which effectively allow users to make loans that need to be repaid by paying the bill, and lack the legal protection these products may provide if a scam is involved.

Traditional gift cards

Reloadable cards

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Whom To Contact If You Think You Are Being Scammed

If you think you are being scammed, the best thing to do is contact your local authorities and/or reach out directly to the company the potential scammer professes to represent. Do not use phone numbers given to you from potential fraudsters, simply hang up and get the number yourself. For example, if someone calls from your bank , hang up and call your bank directly using the telephone number on your account statements. The same is true for emails. If you see anything amiss , just delete the email. If you want to be certain it is bogus, call the company directlyagain, not the phone number listed in the email.

Here are two places you can check to see if you are involved in a potential scam: Internal Revenue Service Consumer Alerts and the The Federal Trade Commission.

And lastly, do not be afraid or embarrassed. Scammers are hoping to make you feel this way so you will not ask other people for help. Do not fall for it. These people are very good at what they do , but there are many more good people in the world who are willing and wanting to help.

Scam Alert: Beware Scammers Asking For Gift Cards

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As you probably know, the scammers of the world are getting more creative and more brazen by the day.

Unfortunately, the Internet has made it far too easy for fraudsters to target victims in other states, and even other countries.

Many scams go after credit card and/or bank account info, but theres an entirely different class of monetary scams in which the scammers ask you to send them gift cards instead of your financial info.

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How A Troy Woman Lost Nearly $10000

Many times, the scammers are pretending to be someone in authority. Nearly half of people who reported handing over money to someone posing as a government agency or official said they paid with a gift card, according to the FTC.

More:Social Security scammers now text pictures of phony badges

In March, a Troy woman got caught up in buying gift cards over a five hour period after receiving a call from a scammer who identified himself as Drug Enforcement Agency Officer Watson.

The con artist claimed that the woman’s Social Security number was compromised and used in Texas. And somehow she was a suspect in a drug transfer from Mexico and she was being charged with a felony.

She needed to take money out of the bank and buy gift cards to fix her legal problems. As scammers played into her fears, she withdrew thousands of dollars from her bank account and used that money to buy numerous gift cards and Green Dot prepaid cards from several businesses.

The caller stayed on the line with her the entire time she was buying the gift cards.

Troy Sgt. Jason Clark said the victim was instructed to travel to various stores to buy the gift cards, including 7-Eleven, Kroger, CVS and Meijer.

“Criminals have learned that if the gift card purchase from one location is too high, the cashier might question the sale,” Clark said.

She lost $9,047.60 to the scam on March 17, according to the Troy Police Department.

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How To Stop An Itunes Gift Card Scam

Why Do Online Scammers Ask for Prepaid Gift Cards?  Rules ...

Theres currently no way to prevent the iTunes Gift Card scams, though Apple does have a warning on its website.

I think that I thought I would have a little more help when it came from Apple, especially considering this is a known problem and I am a little surprised to know that they pretty much offer you no type of option, Terrence Clark of Capital Heights, Maryland told ABC7. He was a victim of an iTunes Gift Cards scam and sent money he thought was intended for his niece.

Until they find a way to fix the iTunes Gift Card scam, people just need to use common sense when dealing with people online and never take someone at their word. Always confirm with the company before sending money and no love interest is going to ask for money to come visit you.

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Scam : Beware The Bots

Gift card scammers often turn to bots software applications that perform automated tasks online to drain the gift card balances of unsuspecting consumers.

Scammers might use a bot called GiftGhostBot to scour retailers’ online gift card balance check systems. The bot is searching this system for gift cards that have been activated. When the bot finds one, criminals use the gift card number to make purchases themselves or they sell the gift card’s information on the dark web. When you use your card, you discover that the balance has been drained and the gift card is useless.

One way to avoid this scam? Use your gift cards as soon as you receive them, giving bots less of a chance to discover your card information.

Why Do Scammers Always Ask For Gift Cards

Fraudsters often ask their victims for payment via gift cardsbut why? Why don’t they simply ask for money instead?

Have you ever noticed that some scammers want their victims to send over a gift card instead of cold, hard cash? It may seem like an odd choice at first, but asking for a gift card is in the best interests of a scammer who wants to get people’s money safely and discreetly.

Here’s why hackers are so obsessed with gift cardsand why it’s a dead giveaway that they’re trying to scam you.

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Social Security Or Identity Theft Scams

You receive an unsolicited email or phone call about a “problem” with your Social Security number, account, or benefits that you must resolve immediately, or you’ll face arrest or other legal action. Or, the scammer says you have to make a payment to receive assistance for an identity theft issue or in exchange for a Social Security benefit increase. If you receive a call from someone claiming to be from the Social Security Administration, or any another government agency, and they want you to pay a fine or fee using gift cards, prepaid debit cards, wire transfers, cash, or internet currency, it’s a scam. Hang up and report it to the Social Security Office of the Inspector General online at .

Learn more about Social security scams.

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