New list shows who to contact for a possible gift card scam refund: Internet Scambusters #1,088
Gift card fraudsters have stolen billions of dollars from American consumers over the past few years - $225 million last year alone.
That's despite repeated warnings that anyone seeking payment using gift cards is almost certainly a crook. Legit organizations just don't work that way.
But the card issuers and consumer organizations are fighting back, and they may even be prepared to refund losses to victims, as we explain in this week's issue.
Let's get started…
Can You Get Your Money Back From A Gift Card Scam?
Americans were swindled out of $228 million in gift card scams last year. But the card companies and consumer organizations are fighting back.
Some will now consider refunding money to victims. And in an updated report, the US Federal Trade Commission (FTC) says you should always contact the relevant card company and ask for your money back.
"Some gift card companies are flagging fraudulent transactions and freezing stolen gift card money so that scammers can't get it. And those gift card companies want to give that money back," the Commission says.
In a big step to support consumers, the FTC has now published a list of contact details, including phone numbers, of some of the big gift card companies, along with guidance on how to launch a claim. At the very least, they say, it's worth asking. And the quicker you do it, the better your chances.
You can find the list at Avoiding and Reporting Gift Card Scams.
The bottom line, they say, is that anyone asking for a payment using gift cards is probably a scammer.
"Only scammers will tell you to buy a gift card, like a Google Play or Apple Card, and give them the numbers off the back of the card. No matter what they say, that's a scam.
"No real business or government agency will ever tell you to buy a gift card to pay them."
Online retailing giant Amazon has recently taken to warning each customer about the scam risks every time they buy a card.
(The firm actually mistakenly sent the warning to all its US customers earlier this month, thanking them for buying a card. This set alarm bells ringing among those who hadn't bought one and Amazon issued an apology!)
Despite all these warnings, 65,000 American consumers fell for a gift card scam during 2022, with losses having almost doubled during the prior year.
And there's no sign of things slowing down. For example, scammers cashing in on the Maui wildfire are currently soliciting donations via gift cards. Some even suggest these cards are the fastest way of getting help to the fire victims.
As we've previously reported, the most common frauds come from crooks demanding a gift card payment to settle a bill. They tell victims to buy a card from one of those big display stands you see in brick-and-mortar retail stores, rub off the security strip and pass the card number to them via phone, text, or email.
But that's not all. As we also explained a few months ago, the crooks have even been tampering with those scratch-off strips in stores, then re-covering the code so innocent shoppers can't tell.
They're also using stolen credit card numbers to buy gift cards, both physically and online, and draining them before the card theft victim discovers their trick. And they can even buy stolen gift card numbers on the dark web.
But the card companies are fighting back.
Leading gift card processor Blackhawk Network recently launched several new security features, including additional scratch-off PINs to verify legitimate gift card possession. They also use complex computer algorithms to analyze redemption data and stop fraudulent transactions faster.
Some issuers are also adopting EMV chip technology - the same chips used on credit cards - for their physical gift cards. This makes it much harder for scammers to clone or counterfeit gift cards.
Here are 7 tips for staying secure when buying and using gift cards:
- Purchase online gift cards directly from the retailer or restaurant's website when possible. Avoid buying gift cards off third party websites, as the card numbers may have been compromised.
- For physical gift cards, examine the card carefully before buying. Look for signs of tampering like an exposed PIN number or damaged packaging. Only buy cards that appear to be untampered.
- Register your gift card with the issuer if that option is available. This creates a record of the card number and protects any remaining balance if the card is lost or stolen.
- Keep your gift card receipt and gift card number in a safe place in case you need to report it lost or stolen.
- Redeem cards soon after purchasing. Don't buy cards far in advance of when you plan to use them.
- For e-gift cards, make sure the link you receive is from the legitimate retailer's website. Watch for scammer imitation sites.
- Do not share pictures of gift card PINs or codes online or over text.
Always report lost or stolen cards and any suspicion you've been scammed immediately so the funds can be frozen. Report it to the FTC, law enforcement, the place where you bought it and, if you have access to it, the card company itself (via a phone number you'll usually find on the back).
Most importantly, think of gift cards as being like cash. If someone asks you to pay with them, it's likely a scam. No genuine business or government department will demand payment in this way. None.
This Week's Alerts
PayPal safeguards: Money transfer giant PayPal has announced a new fraud detection service. It will immediately notify customers with a real-time alert on their PayPal smartphone app if any cards linked to an account are compromised, often before any transactions take place.
Covid watch: As we head toward winter, global health experts are reporting a new surge in Covid outbreaks. That likely means a surge in scams from crooks and dubious health product makers claiming they have a cure for the virus. Not true. There is no cure, although appropriate treatment can reduce the symptoms and speed up recovery. Four members of a Florida family were recently jailed for selling a fake cure through an online church, taking in more than $1 million.
Art donations: The IRS just issued a warning to taxpayers, especially wealthy ones, about art donation tax scams. High-pressure salespeople have been persuading victims to buy art works from them and then donate the works for a tax benefit. They use phony appraisers to tell victims that the value of their purchases is way higher than they're paying for them, enabling them to take a higher deduction. It's a lie.
That's it for today - we hope you enjoy your week!