Did you know that 1 in 4 reported scams involve scammers taking money through gift cards?
How the scam works
Scammers start out by getting the victim to feel like they’re in a high-pressure situation where they owe money to someone. They’ll often start the call pretending to be a government agency or a well-known company such as Amazon or Apple.
Next, they’ll instruct the individual to travel to a specific store to purchase a specific type of gift card. This is the main red flag that you should look out for in this scam.
The FTC Consumer Sentinel Network Data Report for 2021 reported that the top gift cards that scammers will have you purchase are Target, Google Pay, Apple, eBay and Walmart, in that order.
Once you’ve purchased the card, the scammer will often explain a complex and confusing reason as to why they need the victim to then give them the gift card numbers so that they can proceed to extract the money from the card.
This sounds too silly to actually work…
It does.
The main reason it’s so effective is that scammers are very good at getting a person to feel extremely emotional to where they feel responsible for doing exactly what they are told or else they will face serious consequences. In the moment, they aren’t thinking about whether they’re being scammed, but simply that they need to fix the situation by doing what they’re asked.
The most alarming thing of all is that despite this scam going around for several years now, it’s only becoming more popular and effective. Last year alone there was over $200 Million lost through gift card scams.
Red flags to look for with this scam
1. Phone calls from individuals claiming to be from the IRS, Social Security, other government agencies, reputable companies (like Amazon and Apple), tech support for a product you use, etc.
2. The person on the phone is aggressive and insists it’s very urgent
3. You are asked to go somewhere (a big red flag with most scams)
4. You are asked to purchase gift cards (gift cards are for giving, never will anyone ask for payment using a gift card)
5. If you make it this far (Hopefully you’ve hung up and reported the scam by this point already): They ask you to give them the pin and card number to a gift card.
6. A general sign of a scam: You are coached on how to do something. (Example: You are told not to call or talk to your bank, family, or police. Or they instruct you on exactly what to say to someone at the bank or store).
What do I do if I find out a loved one has fallen victim to this scam?
The first thing you should do is contact the company of the card that was used to scam your loved one (Target, Google Play, Apple, etc.). If caught quickly enough, they may be able to disable the card and prevent the scammer from stealing your loved one’s money.
For links to gift card companies’ customer service centers see this link: https://consumer.ftc.gov/articles/gift-card-scams
If it’s too late to disable the cards, unfortunately, the only thing you can do at that point is to file a report for fraud to the FTC. It may not get your loved one’s money back, but it will go a long way in helping bring the FTC’s attention to the particular scam they fell victim to and help to shut it down.
Scams are awful. They prey on vulnerable individuals by putting extreme pressure on them, tricking them into giving away money. If you or a loved one have ever felt vulnerable to scams, be sure to check out WiseWatch, a service designed to prevent scams before they even happen.
