Gift card scam losses tripled since 2017, BBB study finds | #scams | #elderlyscams
An in-depth investigative study by Better Business Bureau finds an increase in reports of scams involving gift cards, with hundreds of millions of dollars in losses over the last few years.
Gift Card Payment Scams: BBB Reveals Why Scammers Love Gift Cards looks at the scope of fraud involving gift cards as a payment method, the way various cards work, the scammers who exploit them and the steps that the industry can take to further tackle this scourge.
According to the study, payment by gift card is a common thread among many scams that have been the subject of previous BBB studies, including government impersonators, business email compromise frauds, tech support frauds, romance scams, fake check scams, prize/sweepstakes scams, and online sales of nonexistent vehicles.
Suzanne in Minneapolis filed a complaint with the BBB when she says her elderly mother purchased $2,000 Nike gift cards as instructed by scammers who were impersonating the FBI. Suzanne says only after the gift card numbers were shared with the scammers and used, Nike noticed suspicious activity and stopped purchases and deliveries of their products.
Available data suggests that gift card payment scams are growing fast. The losses reported to BBB Scam Tracker for this payment type nearly tripled between 2017 and 2020, with a median loss of $700 in 2020.
Gift cards cannot be tracked easily and do not carry the same legal protections as credit or debit cards, making them an attractive option for scammers.
Government agencies requesting payment. No government agency requests money through gift cards.
Claims that paying with gift cards is a safe way to make a payment. Providing the numbers for a gift card is like sending cash, and the money is rarely recoverable. Gift card payment requests are a big red flag for a scam.
Keep the receipt when buying a gift card. Keep the physical card as well. These may help prove that the card was paid for and activated if problems arise later.
Victims should immediately notify the issuer of the card as soon as they realize they bought gift cards and provided the numbers to scammers, or have purchased gift cards with no balance on them. There is typically a customer service number on the back of the card.
Better Business Bureau — file a complaint with the local BBB if you lost money or report a scam online at BBB.org/scamtracker.
Federal Trade Commission — file a complaint online at reportfraud.ftc.gov or call 877-FTC-Help.
Internet Crime Complaint — file a complaint online at ic3.gov/complaint.
Consumer Financial Protection Agency — file a complaint online at consumerfinance.gov/complaint or call 855-411-2372.