It’s that time of year – tis the season for gift card scammers. Whilst gift card scammers are present all year round, at the holidays they tend to become even more prevalent. Any kind of scam that targets someone or something that is intending to be generous seems to be particularly ill-natured. That’s why in this blog, we’ll explore the most common type of gift card scams and the steps you can take to protect yourself.
Gift card scams come in many forms, but arguably the most common is impersonation. A victim may receive a phone call, an email, or message on social media from someone impersonating a company or government agency advising of an amount they have to pay.
Common examples of this are:
Impersonators of a government agency advise that you have overdue tax debts and in order to pay them you need to provide the details of a gift card over the phone
- The organisers of a (fake) lottery advise you have won a prize but you will first need to pay a redemption fee – by gift card
- A scammer claiming to be from a utility provider advises that you have overdue bills and if you don’t pay using a gift card your power/water/gas will be turned off
Whilst these may seem like fairly obvious fraudulent communications – in many cases, victims are caught off guard and choose to just pay rather than take the risk of a worse outcome. It’s important to remember that no legitimate company, government organisation or lottery is going to request you make payments using a gift card. Your best bet is to hang up and call the company directly to confirm the caller’s legitimacy.
The Automated Scammer
A more sophisticated type of gift card scam is the use of hacking software that targets a company’s gift card balance checking system. Once the software locates a gift card that’s been activated and has a remaining balance – the details are stolen and the scammers either use the gift card themselves or sell it for cold hard cash.
It may be surprising, but phishing websites are even useful to gift card scammers – many cards have the added element of needing to be activated online. Some cyber criminals may construct a website very similar to a company’s legitimate web page, in the hopes that customers may accidentally end up there by mistake and enter all the details on their gift card.
Very similar to how some thieves steal credit card information, gift card scammers are now getting in on the action by using magstripe readers. By simply entering a store and approaching the gift card rack, they can steal the codes held in the magstripe on some gift cards. Then all it takes is a call to the company or a check of the balance online to see when a card has been activated and the remaining balance is free for them to use.
How to Avoid Being Scammed
If you receive a phone call from someone impersonating a company and requesting payment by gift card, simply hang up. Remember that no legitimate company will be asking you to pay over the phone by gift card. You can then report this fraudulent behaviour to the company directly and to your government’s fraud department. For example, in Australia you can report this through the ACCC’s ScamWatch website.
To avoid the more sophisticated, automated scammers – the best actions to take are to not purchase gift cards off a store’s publicly accessible rack and to also double check the legitimacy of any websites you access.
Whilst these are the actions individuals can take to protect themselves, it’s also important that businesses do their part. In part to protect their brand’s reputation but also to do right by their customers.
FraudWatch employs a dedicated team of analysts working 24x7x365 to protect businesses from phishing attacks and much more. With the fastest takedown times and financially backed SLAs, we’ll ensure your business remains secure from these scams.