Thursday, June 16, 2022

How Do Gift Card Scams Work

Why Do Scammers Want Gift Cards

How gift card scams work.

Kroger

6 minute read

    Most people use gift cards to treat a loved one or say thank you to an employee. But did you know that gift cards are also popular with scammers? Since 2015 there has been a significant increase in scammers demanding payments by gift card.

    So why do scammers want gift cards? Gift cards are like cash in a lot of ways they are hard to trace and once used, its hard to get your money back.

    Read on to find out more about how these scams operate and how to avoid becoming a victim.

    How Do Scammers Cash Out Gift Cards

    Once scammers get the numbers from victims gift cards, how do they actually get the money? Gift cards are generally limited to use in the country where they are purchased, though some cards bought in Canada can be used in the U.S. and some reloadable cards may be used outside the country. Scammers have several different ways to get the money.

    • They can use the numbers on the back of the cards to buy physical goods. Because open and closed loop gift cards can only be used in the country where they are purchased, this means that scammers will often use money mules — people who transfer illegally acquired money or goods — to go to stores and buy things like phones or electronic goods that they can then resell at online sites such as eBay or Craigslist.
    • Scammers can use gift cards to buy goods sold online at places such as eBay or Amazon and have them shipped to money mules to be resold at online markets or reshipped out of the country.
    • Some cards can be used at ATMs. If they are, scammers can simply withdraw cash.

    What To Do Next:

    If you believe you have received this type of phishing email:

  • Contact the person whose name appears in the email to find out if the request is valid.
  • If not, they should notify their colleagues to be on the lookout for fraudulent emails from them.
  • Contact phishing mcgill.ca immediately to report the phishing attempt
  • If you suspect your account may have been compromised, contact the IT Service Desk immediately at 514-398-3398.
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    The Favorite Stores Used As Part Of Those Scams

    Walmart, Target, Walgreens, and CVS. At those locations, online or in person, victims were often told to buy an iTunes or Google Play gift card. iTunes is the top card used in credit card scams, while Google Play cards just began being used more frequently than ever before . Indeed 42% of victims report paying a scammer with either a Google Play or iTunes card.

    Specifically:

    iTunes was 23.7%, followed by Google Play , MoneyPak , Amazon , and Steam

    Perhaps the worst statistic of all:

    To Report Suspected Sponsor Offer Scams

    Gift Card Scams in 2021 [FULL LIST]

    If you suspect you have been directed to a phony website claiming to be connected with Walmart, please send an email with the link to . The email abuse team will then work with authorities to put an end to the particular scam.

    If you suspect you have received a fraudulent email claiming to be from Walmart, please send the email directly to Walmart at with the scam as an attachment. For investigatory purposes, please do not cut and paste the email, forward the email, or change the subject line.

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    Google Play Gift Card Scams

    Since Google Play gift card scams are the second most popular, after iTunes gift card scams, take note! Scammers find multiple ways to trick people into giving them their Google Play gift card information.

    While iTunes takes a large chunk of the scammers pie at 23.7%, Google Play gift cardholders are still at risk since Google Play accounts, making up 18.3% of reported scams. According to :

    … ask for gift cards in exchange for taxes, bail money, debt collection, physical items like cars, and more. You can only use Google Play gift cards to make purchases, like apps and music, on Google Play.

    To avoid this scam:

    • Only use Google Play gift cards to pay for items on your own Google Play account. Do not use them to pay for anything outside of Google Play.
    • Never share the code on the back of your gift card. If someone asks you for that code, assume that you are dealing with a scam artist and block them or contact Google Play at 1-855-466-4438, or contact them online.
    • Using a Google Play gift card as payment for something else violates the Terms of Service.
    • Scammers will usually ask you to share your card number and code. Other times, they will ask you to mail them a physical card. Beware of both.

    Fake Gift Card Activation

    HOW THE SCAM WORKS: When you receive a gift card that needs to be activated, there is generally an activation website address and telephone number listed on the back of the card and possibly on a sticker across the front as well. Before you can use the gift card, you have to go to the activation website and enter the gift card number, expiration date, and card verification code . Gift card scammers create fake websites with similar web addresses in hopes that victims will land on these fraud sites instead of the real activation site. In addition to catching people who simply mistype the web address, they lure others to the fraud sites by bidding on the activation site keywords to ensure the fraud websites appear at the top of search engine results.

    When someone enters their card information into the fake website, scammers take the card information, activate it themselves on the correct website and drain the value of the gift cards.

    RED FLAG: While it may be difficult to detect a fraudulent activation site simply by looking at it, most do have a less professional appearance than the real site. Additionally, you may find misspellings and references to legitimate gift card issuers, but the most telling clue is that the website address at the top of the page does not match the address listed on the card.

    Read this blog post if you have a gift card from the REAL MyPrepaidCenter.com.

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    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.

    Why Do Hackers Ask For Gift Cards

    Steam gift card scam – How it works and how to not fall for it?

    As you might have guessed, the scammers aren’t trying to collect gift cards to send on Mother’s Day. Instead, they’re asking for gift cards because it’s the quickest and easiest way for them to steal money from you.

    It may seem strange at first: after all, why don’t the scammers ask you to wire money to them? Let’s take some time to break down what happens when you wire money.

    To receive wired money, a scammer needs a legitimate financial account for you to pay into. Fortunately, it can be tough to set up an account these days without entering your personal information. If a scammer did do this, it wouldn’t take long until their scams bring the police right to their front door.

    Not only that, but it can be a little tricky to send money over.

    Let’s say a scammer wants to take money from someone through a phone scam. The hacker will need to tell the victim their account numbers and sort codes, and have them enter the details on their side. If the victim encounters issues or doesn’t know how to wire money, it can delay the scammer from getting paid.

    Now, let’s compare this to gift cards. Do gift cards need a secure financial account to redeem? No, you just need to make an account with the website and redeem the code.

    Also, getting the victim to send the gift card over the phone is easy. Instead of relaying banking codes and setting up a transfer, the victim just needs to scratch off the silver protector and tell the scammer the gift card’s code over the phone.

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    What Instructions Do Gift Card Scammers Give Victims On How To Buy Gift Cards

    Scammers typically ask victims to drive to familiar local retailers to buy gift cards, and tell them what kind of gift cards to buy. The scammers frequently stay on the phone with the victims during the entire process, which may take hours and visits to several locations. And they mainly want victims to buy the cards with cash instead of a debit or credit card, which may require an initial stop at the victims bank.

    Fraudsters typically create a sense of urgency that encourages victims to comply with instructions and act quickly. Often victims are scared because they have been threatened with arrest and told that it is illegal to tell anyone else about the situation. Others believe they have won a major prize in a lottery, but they will not receive the money unless they take immediate action.

    Victims may be instructed by scammers about how to respond if a teller or cashier asks victims why they are making the purchase. Cashiers at retail locations may want to pay special attention to customers who are continuously on the telephone during the checkout process. That could be a sign that they are receiving instructions from scammers.

    It is a good idea for anyone who buys a gift card to keep the receipt. Sometimes the clerk may fail to activate the card correctly. And if a scam is involved, some companies request proof that the victim they are talking with actually purchased the card.

    Threatening Phone Calls Requesting Payments With Gift Cards

    Phone scammers are demanding gift cards and threatening people with:

    • arrest over unpaid tax debts,
    • deportation, or
    • seeking payment of fees to access a government grant.

    Gift cards such as those for iTunes, Google Play, Steam and others are being increasingly demanded by scammers as the preferred payment method, with victims being tricked into making purchases worth thousands of dollars.

    The victims are usually caught up in telco or tax phone scams where they have to pay a certain amount to supposedly help catch someone who has hacked into their computer and accessed their bank account or pay a bogus tax debt urgently.

    So far for 2020, WA ScamNet has received 161 reports of tax phone scams with 26 victims in WA reporting losses totalling $259,000. The highest loss amount by one victim was $60,000. This compares with 2019 figures when $100,450 was lost between 22 victims and a total of 51 reports.

    The scam first came to WA ScamNets attention in 2016 and over time scammers have continued to use gift cards as a form of payment. As a rise in gift cards bought by victims was recorded, Consumer Protection worked with retailers to disseminate scam warning information with some implementing processes for limiting gift card transactions. Scammers have wised to this and have been asking victims to lie when questioned in store or have asked them to make multiple trips to various outlets.

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    How To Spot Gift Card Scams When Searching For Online Loans

    When you think about gift cards, what is the first thought that comes to mind? Maybe you received one from a close friend on your birthday and it gave you the option to buy anything you want from your favorite store. Or maybe, you gave a gift card to a loved one recently to help them celebrate a milestone in their life.

    Whatever it may be, we can certainly agree that gift cards can be exchanged as presents to commemorate special events or to let our family or friends know how much they mean to us, no matter the occasion.

    But what happens if theyre misused? Unfortunately, it has become more and more common for scammers to use gift cards to their advantage.

    Gift card scams may occur more frequently than you would think. Since they work just like cash, they hold a lot of value that can easily be accessed and used. One reason scammers prefer to leverage gift cards is because the cards are hard to trace so its unlikely you will be able to recover any money you lose through fraud on a gift card. Once the value of the gift cards are transferred, its most likely your money is gone forever.

    Fortunately, there are some steps that you can take to avoid getting caught up in a situation like this. Lets focus on some common methods a scammer might use to try to take money from you. Well highlight some important things to keep in mind to help you be on the alert and keep your finances safe.

    Itunes Gift Card Scams

    Scam alert: How criminals can steal money off your gift ...

    iTunes wins as the favorite requested gift card of scammers, with 23.7% of gift card scams involving iTunes cards. According to iTunes, some common scams are, as follows:

    We have seen increasing reports of scammers contacting their victims over the phone and coercing them to purchase Steam Wallet Gift Cards to cover payment for taxes, bail, debts, or delivery of money won in sweepstakes. The scammers often pose as agents of official agencies, such as the I.R.S., to convince their victims to comply.The victim receives a call instilling panic and urgency to make a payment by purchasing 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.

    To avoid this scam:

    • Unless youre purchasing an item from Apple, do not pay with your App Store and iTunes Gift Card or Apple Store gift card.
    • Never give the gift cards numbers to anyone.
    • To contact Apple about a gift card scam, Apple suggests the following:
    • If you believe youre the victim of a scam involving App Store & iTunes Gift Cards or Apple Store Gift Cards, you can call Apple at 800-275-2273 and say gift cards when prompted.

    Also Check: Transfer Itunes Balance

    How To Get Money Back From A Gift Card Scam

    It can be very difficult to get money back from a gift card scam, and in many cases, it may even be impossible. Contact the store from which you purchased the card right away, but also contact the company that issued the card to see if they can do anything about your issue. Some companies will not return gift card money no matter what, but others may be more open to your plight.

    One thing that will help you get money back from a gift card scam is keeping your receipt from the original purchase of the card and keeping the card itself as evidence. Receipts are important to keep and check for debt card information violations as well.

    Tips For Protecting Yourself From Any Gift Card Scam:

    There are plenty of things that you can do to protect yourself from gift card scams. And the best part is that none of these things will take more than a few minutes.

    Just follow these eight simple tips to make shopping for gift cards safer:

  • Don’t buy gift cards from online auction sites. Since this is a large source of gift card fraud, these cheap gift cards may well be worthless to you. Sure, some of these cards are real, but many are stolen, counterfeit or used. It’s not worth the risk.
  • Only buy gift cards directly from the store issuing the gift card or from a secure retailer’s website — no matter how much cheaper they may be somewhere else. If you do buy a gift card online, make sure you buy it from the place that you plan to use it.
  • Don’t buy gift cards off of publicly displayed racks in retail stores. In addition, don’t assume that because gift cards are inaccessible to the public, they are safe. After all, store employees can participate in gift card scams too.
  • Always carefully examine both the front and back of a gift card before you buy it. If you can see a PIN number, put the card back and get a different one. If a gift card looks like it could have been tampered with, don’t buy that gift card.
  • If possible, register your gift card at the store’s website. Although not all stores offer this option, you can uncover any misuse of your gift card sooner and report it more quickly.
  • And that’s it.

    Time to close — we’re off to take a walk. See you next week.

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