Monday, May 3, 2021

MI Attorney General: Don't Fall Victim to Gift Card Scams

Have you ever been asked to make a payment using a gift card? If so, consider that request to be an immediate red flag.

While gift cards can be a popular and convenient way to give a gift, they’re the leading payment method requested for in most consumer scams.

The Federal Trade Commission (FTC) reported consumers across the country lost $79.9 million in gift card scams in the first three quarters of 2020 alone. Bad actors focus on requesting gift cards from a variety of merchants to ensure consumers do not notice a pattern. Gift cards from Amazon, PayPal, Green Dot, eBay, Google Play, Best Buy, Home Depot and even iTunes are known to be requested by scammers, but consumers should be on high alert regardless of the merchant name.

HOW GIFT CARD SCAMS WORK

Each gift card is like digital cash: they are anonymous and basically untraceable with no permanently linked account information that could tie it to any one person. This allows scammers to get creative with these schemes.

Regardless of the type of gift card scam, they always have one thing in common: a sense of urgency. Bad actors will demand that you go to the store – or even multiple stores – right away to obtain gift cards. These scammers may even stay on the phone with you the entire time. Victims of these scams are usually told to provide the gift card numbers and corresponding pin numbers via phone. Once that happens, the thieves are able to get the money loaded onto the card and most of the time, the funds cannot be traced back.

The Consumer Protection Team within the Michigan Department of Attorney General has received a number of complaints related to the following gift card scams. They can sound very convincing, but it’s important to never provide your personal information or provide payment to anyone via these methods:

  • Law Enforcement Imposter Scams – caller poses as a law enforcement official demanding that a fine must be paid to avoid arrest or legal action.
  • Tech Support Scams – you will receive a call or email informing you that there is an issue with your computer, and you must provide payment to fix it. Remember, troubleshooting or tech support should be initiated by you. A scammer does not know what your computer type or serial number is. They’re simply hoping that you fall for it.
  • Family Emergency or Grandparent Scams – You will receive a call demanding bail money or ransom for a family member in trouble. Immediately hang up if you receive this call and if you’re worried, you can reach out to that family member via the contact information you know to be correct.
  • Charity Imposter Scams – Requests from a fake charity requesting a financial donation. Verify a charity's registration status on the charitable trust's website.
  • Utility Imposter Scams - Demands that payment via gift card is required right away to avoid shut off for an unpaid or late utility bill. Your utility providers will never request payment by gift card.
  • Debt Collection Scams – Debt collector calls may be legitimate, but not when they insist that you pay off a balance with a gift card to avoid credit issues.
  • Sweepstake, Lottery Winnings, or Inheritance Scams – A request for up-front fees to be paid via gift card before any winnings can be collected.
  • Social Security Benefit or IRS Tax Scams – Demands that a fine must be paid before any benefits can be paid out.
  • Vaccine and Virus Treatment Scams – An offer to sell treatments for COVID-19 or other viruses to you if you pay them with a gift card of their choice. Remember, Michigan residents can always get up-to-date information on the state’s coronavirus webpage.

Once money is loaded onto a gift card and the numbers are provided to the requestor, these transactions cannot be reversed.

Always remember: Anyone who demands payment by gift card is a scammer, period. No reputable company or government agency will ever demand payment via gift card.

The FTC recommends that if you paid a scammer with a gift card, do the following:

  • When you contact the company, tell them the gift card was used in a scam. Ask them if money is still on the card, and if they can refund your money.
  • If you act quickly enough, the company might be able to get your money back, but be aware that that some companies will not return any money—even if the gift card hasn't been used.
  • Keep the physical gift card and the receipt. Notify the store you purchased the gift card from right away.

The FTC also provides a list of common merchants used for these types of scams. The list is updated periodically. If you fell victim to a gift card scam and the merchant is not listed on the list below, search for contact information on the card itself, or search for their actual website.

Amazon

eBay

Google Play

iTunes

Green Dot MoneyPak

REPORT FRAUD

To report fraud or if you have a general consumer complaint, contact the Attorney General's Consumer Protection team at:

Consumer Protection
P.O. Box 30213
Lansing, MI 48909
517-335-7599
Fax: 517-241-3771
Toll free: 877-765-8388
Online complaint form
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