According to an AARP survey, an alarming one in three adults has experienced or knows someone who has been tricked into purchasing gift cards under false pretenses. Additionally, one in four, or roughly 13 million people, have indeed purchased these cards. Here are five prevalent gift card scams to watch out for in 2023:
Table of Contents:
- What Are Gift Card Scams?
- How Do Gift Card Scams Work?
- What Should I Do If I Fall Victim to a Gift Card Scam?
- 2023 Top 5 Gift Card Scams
What Are Gift Card Scams?
Gift card scams are deceptive schemes where fraudsters trick individuals into buying gift cards and sharing the card details, which they exploit for their benefit.
A new Federal Trade Commission data spotlight shows that in the first nine months of 2021, consumers reported losing $148 million in scams where gift cards were used as a form of payment.
That amount is more than was reported in all of 2020.
Nearly 40,000 consumers reported using gift cards to pay a scammer in that time frame.
Most often, consumers reported paying scammers who were impersonating large companies or government agencies.
How Do Gift Card Scams Work?
Scammers often impersonate authority figures or loved ones, demanding urgent payment via gift cards.
After obtaining card details, they quickly drain the funds, leaving victims empty-handed.
What Are the Warning Signs of a Gift Card Scam?
Red flags include urgent demands for gift card payment, unsolicited requests from supposed authorities, requests for card details, and vague explanations for the required payment.
Signs to watch for
1. You’re directed to buy one or more gift cards — often referred to as “electronic vouchers” — as a quick means of making payment.
2. You’re told to share the numbers on the back of the gift cards, by reading them off or sending a picture.
3. The request comes from someone you wouldn’t expect to ask for money this way:
- A Social Security warning of a problem with your account
- A utility company warning of an imminent shutoff
- A lottery company promising a big prize — once you pay some fees upfront
- A grandchild needing bail or facing another financial emergency.
Is it possible to recover funds if you fall for a gift card scam?
In the event of a gift card scam, inform the issuing company immediately.
Clearly explain that the card was utilized in a scam, inquire if funds remain on it, and request a refund.
Swift action may allow the company to help recoup your lost money.
How Can I Avoid Falling for a Gift Card Scam?
To avoid scams, only use gift cards as intended (giving as gifts, not for payments), never share card details, and always verify unsolicited payment requests independently.
What Should I Do If I Fall Victim to a Gift Card Scam?
- Report it to the FTC at ReportFraud.ftc.gov. Report it even if you didn’t pay. Your report helps law enforcement stop scams.
- Report it to your state attorney general.
- If you lost money, also report it to local law enforcement. A police report may help when you deal with the card issuer.
Unfortunately, retrieving lost money is rarely possible.
2023 Top 5 Gift Card Scams
Here are the top 5 scams of 2023 to watch out for:
1. Untraceable Payments
Gift cards, once likened to cash are being exploited by scammers.
They are luring unsuspecting victims into purchasing gift cards for payments to government agencies under false pretenses.
Remember, no legitimate business or government agency will ask you to pay with a gift card.
If you are unsure, confirm directly with the person or agency you are paying if they requested a gift card from you.
2. Prepaid Gift Card Scams
Scammers have evolved their methods, now targeting prepaid gift cards like Visa’s Vanilla Gift Card.
Fraudsters physically record the activation details from cards on display in stores, and once the card is activated by an unsuspecting buyer, the scammers drain the funds.
Always inspect your card before buying and choose those that aren’t easily accessible on the rack.
3. Massive Financial Losses:
Gift card scams are not just minor annoyances. They can lead to severe financial losses, as an unfortunate senior discovered after losing nearly $70,000 in a complex gift card scam.
The scammer impersonated Apple Tech Support and convinced the victim to buy 140 gift cards, costing $500 each.
Be wary of anyone insisting on unusual or complex transactions involving gift cards.
4. Tech Support Scams:
Scammers often pose as computer tech support or government officials, urging you to buy gift cards for urgent matters such as fixing a supposed computer virus or paying a utility bill.
If someone claims to be from tech support and asks for gift cards, be skeptical and hang up.
5. Gas Station Scams:
Recently, there’s been a surge in scams at gas stations, where a scammer offers a cheap fill-up using a stolen gift card or credit card.
The best rule of thumb here is, if it sounds too good to be true, it probably is.
2023 Gift Card Scams Summary
In conclusion, while gift cards can be an excellent gift option, they are also susceptible to exploitation by scammers.
Protect yourself by buying from trusted sources, conducting a thorough check before purchasing, and always scrutinizing requests for payment via gift cards.
Be vigilant and stay safe from these emerging scams.
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