Friday, September 30, 2022

How Do Scammers Use Gift Cards

Gift Card Scams Are Growing And We’re All Paying The Price

Report Gift Cards Used in a Scam | Federal Trade Commission

Every year, scammers trick Americans into handing over millions of dollars in gift card payments. Retailers aren’t doing much about it.

Gift cards have become a popular way for scammers to launder money.

The scams start out innocently enough.

Maybe a phone call from someone who says he works for Amazon, claiming he noticed someone hacked into your account. Maybe someone who says she works for Microsoft, offering a refund for a computer security service you bought a few years ago that stopped working.

Lisa Hernandez was trying to reach, the dating site, to cancel her account when it happened to her. The 50-year-old single mother of four had signed up for the service but decided she didn’t want to stay with it.

She searched on Google for a customer service number to call. What she found instead was a fake website, built to look legitimate but with a phone number that connected her to a scammer posing as Match customer service. Kevin, the man on the other end of the line, said he could help. First, though, he told her she needed to install a program called TeamViewer, which allowed him remote control of her computer.

“If someone coerces you, then you’re out of luck,” said Kathy Stokes, director of fraud prevention programs at AARP.

“This is only the tip of the iceberg,” said John Breyault, vice president for public policy, telecommunications and fraud at the National Consumers League.

Why Do Romance Scammers Ask For Bitcoin And Gift Cards

Romance scammers come up with lies and excuses as to why they need their victims money. They will claim that their life is in danger or that their job is on the line if they dont get the money they need as soon as possible. While there are some scammers that get paid via wire transfer or through their bank, other scammers demand that they receive gift cards or Bitcoin. This is due to the fact that Bitcoin and gift cards are untraceable methods of payment.

This means that if a victim were to report their scam to law enforcement, they wouldnt be able to trace their payment back to the gift card. Therefore, it would make it really hard for them to get their money back. If a victim were to call the gift card company or Bitcoin, there is still not much they can do if the scammer already cashed in this method of payment. Scammers also know that they can remain anonymous if they receive a gift card payment or Bitcoin and want to hide their identity so that law enforcement cant catch them.

Common Gift Card Scams And How To Spot Them

It often pays to look a gift horse in the mouth recognizing these types of gift card fraud will go a long way toward helping you stay safe from this growing threat not just this holiday season

Its that time of the year again, when were all online looking for presents to give and receive. Gift cards are an increasingly popular choice, which means you might well be buying or receiving them during the festive period. In fact, theyve become a huge global market projected to grow at a rapid clip over the coming years to reach a staggering US$2 trillion by 2027. Needless to say, the popularity of gift cards hasnt escaped the notice of cybercriminals and online fraudsters, whove developed a whole underground industry focused around gift cards.

Some scams will use the cards themselves as a lure to trick you into handing over sensitive personal and financial information. In other cases, the fraudsters will impersonate officials, demanding payment via gift cards. Whatever the scam, get familiar with these tactics to stay safe online this holiday season.

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Scam : The Online Auction Scam

You might be tempted to buy gift cards at online auction sites. Dont. Scammers often sell gift cards that havent been activated at these sites. You pay for the cards thinking youre getting a bargain because youre paying less than the cards face value only to find that the gift card doesnt work.

Other scammers lie about the value of the gift cards they are selling online. They might claim that the gift card is for $50. You pay for the card, receive it, and find out that it only has $5 left in its balance.

Avoiding this scam is simple: Never buy gift cards from an online auction site. If you do want to buy gift cards online, buy them directly from the retailer offering them.

If You Have Been A Victim Of A Voucher / Gift Card Scam

Free Gift Card Scam (2021)
  • Report it to Action Fraud, the UKs national fraud reporting centre by calling 0300 123 20 40 or by visiting If you are in Scotland, contact Police Scotland on 101.
  • Report it to your relevant bank or payment card provider immediately. You will find out how to do so by looking on their websites.

If youve experienced cybercrime, you can contact the charity Victim Support for free and confidential support and information.

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What Are Romance Scams

A romance scammer is someone who creates a fake profile on a dating app or a social media website and tries to start fake relationships with random people. They sweep their victims off their feet by saying how gorgeous they are and how they want to get to know them better. They keep talking to the victim on a daily basis until they fall in love with them.

Once the scammer gains their victims trust, the scammer starts coming up with excuses as to why they need money. They usually start off with something small, such as money for food or other small expenses. Then, they create a more serious excuse and usually claim that their life or job is on the line if they dont receive a large sum of money. Romance scammers continuously ask their victims for money until they drain their bank account.

How To Avoid Becoming A Victim Of A Scam

There are several things you can do to prevent yourself from becoming the next victim from a scammer.

You need to be very suspicious when reading email.

If you believe an e-mail to be legitimate, call the sender on the telephone to get their verbal agreement. Dont call the number in the e-mail, call the number you already have in your phone, or in the business phone directory. If you cant speak to them in person or on the phone, then delete and ignore the e-mail. Dont reply, just delete it.

When my Dad taught me how to drive a car, I distinctly remember him saying, You have to drive as though everyone out on the road is trying to hit you. He was trying to instill a defensive driving mindset in me. This is true with e-mail as well. Unfortunately, in todays world, you need to be very cautious when reading EVERY e-mail that you receive.

If you receive an e-mail from someone who you know and it sounds out-of-place, or off, call the sender of the e-mail directly and ask them directly if they sent you the e-mail. If you dont know the sender, DELETE the email.

If you dont recognize the sender, delete it.

There is one thing you can do to prevent yourself from becoming a victim of these scammers. You can use an app available for IOS and Android, called PrivacyStar. When a call comes in, it will tell you the name of the caller, and why they are calling before you even answer the phone. has no affiliation with this company, however, you can if you like.

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How To Stay Safe From Gift Card Scams

Raising and maintaining user awareness is a large part of the battle against gift card scams. The following tips will go a long way towards helping you stay safe online:

  • Buy only from retailers that store gift cards in locked cases
  • If you buy online, purchase directly from the retailer rather than discount stores
  • Only buy gift cards that feature PINs
  • Be sceptical if an offer looks too good to be true, it usually is
  • Be aware that no business or government official will ask to be paid in gift cards
  • Never enter personal and financial details after unsolicited contact online
  • Use cards as soon as you can
  • Double check the card balance as soon as you get the card

Remember, the bad guys are constantly thinking of new ways to monetize stolen data. The above is, therefore, by no means an exhaustive list. But it should be a good place to start.

Further reading:

Scam : The Shady Cashier

How gift card scams work.

Sometimes a store’s cashier is in on the scam. Say you purchase a gift card at a department store. The cashier might activate that gift card but instead of handing it back to you, switches the card with one that hasn’t been activated. The cashier then keeps the activated card and gives you a card that doesn’t work. The cashier can then use the activated card that you bought to make purchases.

The best way to avoid this scam? Watch cashiers as they check you out. Make sure they hand the gift cards back to you as soon as they activate the card.

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A Threatening Official Demands Payment

Here, the scammers masquerade as a legitimate official from the government, a utility provider, or another organization. Theyll typically threaten their victims, perhaps by claiming theyre owed unpaid taxes or outstanding bill payment and stress the urgency of payment. This is classic social engineering designed to force the victims into hurrying their decision making.

The scam could arrive in the form of a phishing email, or text, or even a phone call . Payment is required by gift card, with the scammers usually specifying the type of card they want to be used for the payment. All of these should be red flags. As the FTC says, no real business or government will require payment via gift card.

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.

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Gift Card Scam Emails

You receive an email about a gift card youve received as an online gift. You go to the linked website to verify your information, but all you end up doing is downloading malware and exposing yourself to identity theft.

Dont trust email links and always look at the hyperlink and reply to email sender. If an email offer sounds too good to be true, it probably is.

Another scam, of this variety, is when someone receives an email from their boss, asking them to purchase gift cards on their behalf. Instead, they end up buying the gift cards for a scammer who will immediately drain them!

How Big Of A Problem Is This Type Of Fraud

Free Amazon Gift Card Scams (Fraud) and How do Scammers ...

Gift card scams cost trusting consumers so much money that the Federal Trade Commission,, and the Internet Crime Complaint Center have sounded the alarm.

The subtext of their warnings?

If you dont want to be scammed, educate yourself, stay aware, and use the tools available to you if you are scammed.

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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.

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.

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Common Gift Card Scams

There are a variety of scams that ask people to make payments by email, phone, or text for items or services. Fraudsters use many methods to conduct scams, including requesting gift cards from well-known brands. We want to ensure that our customers are aware of scams that may request payment using Gift Cards.

Have you fallen victim to or been exposed to a scam?

No legitimate sale or transaction requires you to pay specifically with gift cards.

Never use Gift Cards to make a payment outside of Amazon or its affiliated properties and never use gift cards for other retailers and brands other than the intended brand. Gift Cards can only be used on after you’ve redeemed them to your own Amazon account. Don’t use Gift Cards to make payments to other businesses or individuals.

Only use gift cards for other retailers and brands on their respective locations. You can use gift cards that include a card network brand at merchants that accept these card brands. However, don’t give them directly to an individual for payment.

Don’t provide any gift card details to someone you don’t know and trust. Always verify the identity of anyone asking you to provide gift card details.

What Gift Card Scams Looks Like

Why Do Scammers Want Gift Cards?

Gift cards are for gifts, not for payments. But theyre popular with scammers because theyre easy for people to find and buy, and they have fewer protections for buyers compared to some other payment options. Theyre more like cash: once you use the card, the money on it is gone. Scammers like this.

If someone calls you and demands that you pay them with gift cards, you can bet that a scammer is behind that call. Once they have the gift card number and the PIN, they have your money. Scammers may tell you many stories to get you to pay them with gift cards, but this is what usually happens:

  • The caller says its urgent. The scammer says you have to pay right away or something terrible will happen. But you dont, and it wont.
  • The caller usually tells you which gift card to buy. They might say to put money on an eBay, Google Play, Target, or iTunes gift card. They might send you to a specific store often Walmart, Target, CVS, or Walgreens. Sometimes they say to buy cards at several stores, so cashiers wont get suspicious. And, the caller might stay on the phone with you while you go to the store and load money onto the card. These are all signs of a scam.
  • The caller asks you for the gift card number and PIN. The card number and PIN on the back of the card let the scammer get the money you loaded onto the card. And the scammer gets it right away.
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    Gift Card Scammers Targeting Worshipers

    The FTC has reported a rise in worshiper scams. These occur when someone receives a communication from a supposed pastor, rabbi, priest, imam, bishop or other clergy members. These scammers have defrauded worshipers out of nearly $2 million since 2014, roughly half of which were fraudulently obtained during the first six months of 2019.

    The email is actually from a scammer whose goal is money for themselves, but you wont know that yet. Their message and email may appear genuine upon the first read, but a legitimate charity will never ask for a gift card or gift card number.

    Look at the actual email address, not just the name or title listed. It wont be an email from a real church and may also contain typos or spelling mistakes indicative of a foreign scammers message. Follow the FTCs guide on reviewing legitimate charities.

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