Gift card scams are on the rise

SCAM ALERT

The Seal Beach Police Department cautions LW residents not to send money, checks, gift cards or give personal information via text or over the phone. Gift card scams, especially, are on the rise, according to the Federal Trade Commission. About one in four people who report losing money to fraud say it happened when a scammer tricked them into divulging the numbers on the back of a gift card.

If someone asks you to pay someone using a gift card, stop. It’s a scam. Gift cards are for gifts, not payments. People can report gift card scams at reportfraud.ftc.gov.

These scams are far more frequently reported than any other payment methods for fraud, and numbers have reached staggering new highs compared to past years.

In the first nine months of 2021 alone, nearly 40,000 people reported $148 million stolen using gift cards. And because the vast majority of frauds are not reported to the government, this reflects only a fraction of the harm these scams cause.

Scammers, who direct people to go to a specific store and buy a specific gift card, favor gift cards because they are easy for people to find and buy and they have fewer protections for buyers compared to some other payment options.

Scammers can get quick cash, the transaction is largely irreversible, and they can remain anonymous.

According to reports received by the FTC, scams demanding gift cards most often start with a phone call from someone impersonating a well-known business or government authority.

Many people report that a scammer posing as Amazon or Apple told them to send pictures of the numbers on gift cards to fix a supposed security problem with their account.

Other people report that a scammer claiming to be the Social Security Administration said their bank accounts would be frozen as part of an investigation. They’re told to buy gift cards to avoid arrest or to secure access to their money. Reports also show that scammers asking for gift cards pretend to be a love interest, employer, sweepstakes or lottery company, or relative in trouble.

In the first nine months of 2021, people who reported losing money buying gift cards mentioned Target stores more than other retailers. Reports suggest that Walmart, Best Buy, CVS and Walgreens stores are also popular with scammers.

Both the number of reported gift card scams and total losses have increased every year since 2018, according to the FTC. Individuals also report that they’re losing a lot more money, with median reported losses up from $700 to $1,000.

Whenever someone demands to be paid with a gift card, it’s a scam. If someone convinced you to give them the numbers on a gift card or send them a photo of the card, save the card and your receipt, and immediately report it to the card issuer. Contact information for some major gift cards is available at ftc.gov/giftcards. Then report the scam to the FTC at ReportFraud.ftc.gov.