Warning from Federal Trade Commission: more people are losing money in gift card scams

Consumer Report

SAVANNAH, Ga. (WSAV) – It might be the season for giving but also taking in terms of gift card scams.

“Scammers can get the money almost like getting cash,” said Emma Fletcher, an analyst with the Federal Trade Commission.

Fletcher says in the first nine months of this year, nearly 40,000 people were scamed out of $148 million dollars.

“One in four scams now involve a gift card,” she said”Scammers have come up with some very elaborate stories to convince people to do this.”

The scam starts with a text or email, often with the claim the communciation is from a government agency and you need to pay a fine or your social security number has been compromised and you need to take immediate action to protect your account. Whatever the pitch, the answer quickly becomes that you need to go to various stores and get gift cards to pay a fine or even to help secure your accounts from hackers. It quickly evolves into getting the gift cards and reading the number on the back fo the card to the scammer who is on the phone.

“The numbers on the back are not good for anything but taking the money off the card. And if someone is insisting that you pay with a gift card that’s a big red flag that it’s a scam,” said Fletcher.

Fletcher says schemes are getting more elaborate such as being told accounts have been hacked. So reading the card number to the stranger on the telephone is supposed to help you.

“The consuemr is told that the numbers on the back of the gift cards are going to block the hackers or that they are a way to sort of way store their money to keep it safe,” said Fletcher.

She says people often react with fear and want to take action.

“I can assure you that when people are in that moment with that person in their ear you know, barking out orders to them, sending them from store to store when they’ve become extremely concerned that there’s fraud on their account or that they’re in serious legal trouble that’s how it works and it can really happen to anyone,” says Fletcher.

Once money form a gift card is taken it normally is gone, accordign to Fletcher although she encourages consumers to contact the company that issued the card and seek help. She also says always report fraud to the FTC. Finally, she says despite whatever is said to you and despite any fear it causes, think before you act.

“Gift cards are for gifts, not for payments,” said Fletcher. “If someone’s demanding numbers on the back of the card, you can bet it’s a scam.”

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