Gift Card Scams: Why Scammers Always Want Gift Cards
What is this scam?
Gift card scams are a prevalent form of fraud where scammers trick victims into purchasing and handing over gift cards, thereby transferring money directly to them. According to the Federal Trade Commission (FTC), consumers reported losing nearly $200 million in such scams between January 2020 and September 2021. These scams are particularly dangerous because once a gift card is redeemed, there's no way to reverse the transaction or get your money back. Scammers often use fear tactics, urgency, and impersonation of legitimate organizations like government agencies, law enforcement, or utility companies to convince their targets.
How the scam works
Real examples
Mary received a call from someone claiming to be an IRS agent who said she owed back taxes. To avoid arrest, she was told to buy several Walmart gift cards and read off the codes over the phone.
John got an email from what appeared to be his power company stating that he had missed payments and if he didn’t resolve it immediately by purchasing iTunes gift cards, his electricity would be disconnected.
Red flags to watch for
- A caller requests immediate payment using a gift card or demands you purchase specific types of gift cards.
- The caller threatens arrest or legal action if the requested payment is not made immediately.
- You are told to keep your interaction with the sender secret from family, friends, or financial advisors.
- They pressure you to act quickly without time for research or consulting others.
- You notice misspellings or grammatical errors in emails that claim to be from official organizations.
Victim recovery plan
- 🚨 Contact the gift card companies immediately and report the cards as stolen or compromised.
- 🚨 Save all receipts, emails, and text messages related to the scam for future reference.
- 🚨 Notify your bank about the situation in case any funds were transferred directly from your accounts.
- 🚨 Change passwords on all online accounts where you used similar credentials.
- 📝 Report to FTC at reportfraud.ftc.gov to help track and combat scammers.
- 📝 File with FBI IC3 at ic3.gov providing details of the scam including gift card numbers if applicable.
- 📝 Contact local police for a report number, which can be useful for insurance claims or other legal actions.
- 📝 File with your state Attorney General's office as they often have resources to help victims.
- 💳 Dispute charges on any gift cards you purchased by contacting the card issuer directly; provide them with proof of purchase and report.
- 💳 Freeze credit at all 3 bureaus (Equifax: equifax.com/personal/credit-report-services, Experian: experian.com/freeze, TransUnion: transunion.com/credit-freeze) to prevent identity theft.
- 💳 Consider signing up for a credit monitoring service through your bank or financial institution.
- 🔒 Review all accounts that may have been compromised and secure them by changing passwords and enabling two-factor authentication where possible.
- 🔒 Watch for unusual activity in your credit reports or on banking statements, indicating potential identity theft.
- 💛 These scammers are professionals who manipulate thousands of people; you were targeted because of their tactics.
- 💛 Talk to someone you trust about what happened and how it makes you feel, sharing can be a relief.
- 💛 Contact the AARP Fraud Watch helpline at 877-908-3360 for free support from trained professionals.
- 📋 Monitor credit reports weekly at annualcreditreport.com to watch for any unauthorized activity.
- 📋 Watch for follow-up scams targeting previous victims, staying vigilant can prevent further losses.
- 📋 Regularly update your security measures such as software updates and antivirus protection on all devices.
How scammers find you
- Phone calls from unknown numbers
- Text messages or emails impersonating official entities
- Social media platforms like Facebook Messenger
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