Unwitting Victims Can Bring Gift Card Fraud on Themselves

Knowing about the scams is your first step toward avoiding them.

Date:Nov. 22, 2019

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Getting scammed really hurts. Not only is the realization humiliating, it can sometimes deliver a damaging blow to your finances. If that isn’t painful enough, imagine finding out that you enabled the scam to happen to you. Double ouch!

 

When a person is deceived into giving their own money or financial access to a criminal, it is called victim-assisted fraud. Unfortunately, this type of scam happens too often these days, and the crooks will sometimes use gift cards to commit their crimes. Victim-assisted fraud tends to target the elderly and financially desperate people, but anyone is capable of being duped into participating in victim-assisted fraud. 

 

Because the victim helps facilitate these scams, they can be very difficult to stop. Here are several examples of victim-assisted fraud using gift cards: 

 

  • An elderly person is instructed by phone to use a gift card to help a loved one in an emergency situation.
     
  • An unemployed individual receives an email saying they’ve won an overseas lottery. To collect, all they need to do is to remit a $300 gift card to cover the taxes.
     
  • An unsuspecting young adult receives a call from the IRS or a collection agency saying they must pay unpaid taxes or bills – in gift cards – or they will be put in jail.
     

 

In each of these instances, the victims have been contacted by an opportunistic fraudster. After demanding that the victim put the funds on a gift card, they direct the person to reveal the card number. This is like handing a car thief your car keys. Once the fraudsters have the card number, they are free to empty out the funds loaded on the gift card and spend the funds themselves. And the victim is out the money.

 

Victim-assisted fraud is an extremely difficult crime to prosecute. After all, gift cards are an anonymous way to pay. This anonymity works in the crooks’ favor, as the stolen funds, once transferred from the gift cards, cannot be traced. In some cases, the scammers are located outside the United States, effectively taking the crime beyond jurisdiction. There's no real way of identifying the scammers in foreign countries – and no hope of getting the stolen money back.

 

Being aware of such scams will go a long way in helping you avoid them. Keep these tips in mind in case you are confronted: 

 

  • Be extremely wary of anyone asking you to make a payment with a gift card. It is important to know that no real business or government agency will ever ask you to pay them with a gift card. 
     
  • Disregard any request to send money on a gift card in order to get money back. 
     
  • Do not to give out the card number on your gift card to any person or business you do not know. 

 

Most people do not admit to getting scammed. Fraudsters are keenly aware of this and use it to their advantage. When their gift card scam goes unreported due to the victim’s embarrassment, the perpetrators can continue scamming unsuspecting people, totally unopposed. Don’t give the bad guys a free pass. If you or someone you know has been victimized by a victim-assisted fraud, it is imperative that you notify the proper authorities as soon as possible to prevent others from getting scammed. In addition to contacting your local law enforcement, you should also file a complaint with these organizations:
 

  • Federal Trade Commission (FTC); go online or call 877-FTC-HELP. The FTC will use your information to create public warning campaigns about gift card fraud.
     
  • Your State Attorney’s Office (SAO); which can be found via the U.S. Department of Justice website. Your SAO monitors reported scams in your state and will also use your complaint to create public warning campaigns.
     
  • If the fraudster used a legitimate business or government agency as a cover to con you, you should contact them as well. These entities would be grateful to learn that their names are being used to perpetrate gift card scams – so that they can take steps to stop their names from being used in this manner.

 

As long as there are unwitting victims out there, there will be victim-assisted fraud. But consumers have the power to stop it. The best advice is to be extra vigilant. And be willing to adjust your defenses, as fraudsters can and will devise new gift card scams. Most of all, trust your instincts. If the offer or demand seems dubious, it’s not worth your time. 

 

FTC Complaint Assistant