Far beyond their usefulness as last-minute Christmas presents, gift cards now often serve a more sinister purpose: enabling scammers to steal money from consumers – to the tune of $74 million during the first nine months of 2019 alone, according to the Federal Trade Commission [FTC].
Because the money loaded on gift cards is as untraceable as cash, criminals are using them to trick people – often unsuspecting older Americans – into buying gift cards and providing the PIN numbers over the phone to pay nonexistent back taxes, send money to “grandchildren” in trouble, or purchase “tech support” for fake computer problems.
This year, The FTC has also reported a dramatic increase in reports of scammers pretending to be from the Social Security Administration. These scammers tell consumers their Social Security numbers are connected to a crime, and their bank accounts are about to be frozen or seized.
The callers then direct people to “protect” their accounts by withdrawing the money and putting it on gift cards, and ask for the gift card PIN numbers for “safekeeping.” The callers also try to get victims to reveal their Social Security numbers by falsely claiming they have been suspended.
These criminals are very persuasive, and attempt to keep their victims on the phone to prevent them from talking to anyone else before making the purchases. Some even convince victims that they are about to be arrested, and direct them to exactly which cards to buy – usually iTunes, Google Play, Amazon or Steam gift cards.
The FTC has advised that in every case, these calls are scams, and offers the following advice to consumers:
• If a family member, religious organization or anyone claiming to know you calls to ask for money, hang up and call them back to verify their identity.
• Legitimate businesses and government agencies will never demand payment in gift cards, and will never ask you to reveal personal information over the phone.
• Use gift cards only as gifts for people you know … never for payments.