Did you know that gift card scams are among the most popular cyber threats?
The same things that make gift cards popular with consumers—convenience and ease of use—also make them attractive to scammers as a vehicle for fraud.
Gift cards, also known as gift certificates or vouchers, have topped the list of reported fraud payment methods every year since 2018, according to the Federal Trade Commission (FTC). The FTC reports that roughly one in four people who lost money to a fraud scheme paid scammers with a gift card.
To prepare for the holiday season, here are some of the most common forms of gift card scams and how to avoid them with simple tips.
What is a gift card scam?
At their most basic, gift card scams usually start when someone asks you to buy gift cards to make a purchase. Once you have the gift cards, fraudsters will ask you to give them the card identification number. Once they have that number, scammers can redeem the card for its total value.
No legitimate business or government agency will ever ask you to pay a balance using gift cards. Anyone who does is trying to scam you.
Common gift card scams to watch out for
Gift card scams have a lot in common with garden-variety phishing attacks that leverage deceptive phone calls, emails, websites, or text messages to steal your valuable information and defraud your money. These attacks play on fear, uncertainty, and doubt to trick you into following through.
Some common types of gift card scams include:
Gift card payment demand
This form of gift card scam may start with a phone call or a text message demanding that you call a government department or law enforcement agency to pay taxes or fines and threatening jail time if you don’t comply.
Once they have you on the line, the scammer will demand you pay in gift cards, often asking for common brands like Apple, Amazon, or Google Play. The scammer may insist on staying on the phone while you go to the store to buy cards or purchase them online.
Once you’ve bought the cards, the fraudster will ask for the gift card numbers and codes, at which point your money is as good as gone.
Stolen codes
Some scammers may go into stores and write down the codes from physical gift cards, waiting for an unsuspecting customer to purchase and activate them. Once activated, scammers can use the stolen gift card codes to buy goods online.
Fake gift cards
Some scammers may offer you gift cards with less value than what you paid. Such cards are either entirely fake or have been stolen. Remember: if a deal is too good to be true, it probably is.
Gift card generators
Offered as a website or sometimes as downloadable apps, online gift card “generators” claim to allow you to generate codes redeemable at major online retailers and department stores.
Sometimes, these downloads will reveal (just before you try to use them) that they only generate random codes “for educational purposes”—but only after they have already collected your personal information and credit card number to be used later in fraudulent purchases.
Even worse? One of these generator downloads could introduce malware to your system, leaving you vulnerable to crypto mining, ransomware, and other malicious behavior.
Why do scammers like gift cards?
Tracing or canceling purchases made with gift certificates is difficult, at times almost impossible. Gift cards are essentially as anonymous as cash as they aren’t traceable to any individual’s bank account, so pinpointing the source of the fraud is challenging.
Gift cards are an easy way for scammers to access funds as they are available in most stores, and just about anyone can buy one. And unlike wire transfers, using or buying gift cards won’t raise any red flags.
Particularly around the holiday shopping season, it’s not unusual for someone to buy multiple gift cards at a time. As a result, credit card companies and banks are unlikely to flag or halt a purchase on suspicion of fraud.
Defend yourself against gift card scams
As a consumer, vigilance is the key to protecting yourself against online scam attempts. To avoid falling victim to these frauds, Terranova Security recommends that you:
1. Never provide personal information to unsolicited messages or calls
Reputable companies won't request personal data like your name, address, or credit card information for no reason. They won't demand you pay for things in gift cards, so don't provide any personal information to unsolicited communications.
2. Avoid engaging with unsolicited fraudster callers
Many scammers prefer to interact with victims over the phone because, once a rapport is built, they can easily insert high-pressure tactics into the conversation to extract information. If you’re on the receiving end of this type of call, don't hesitate to hang up if someone unfamiliar starts making aggressive demands.
3. Never click on suspicious email links or attachments
Email links and file attachments are the most common ways cyber criminals transmit malware, so don't click on email links from unknown senders. Hover your cursor over any links to see where the link will take you, and never click if you doubt the email's legitimacy.
4. Watch out for spelling mistakes
Scam emails may look convincing at first glance, but a closer inspection often reveals spelling or grammatical errors. If you see sloppy mistakes, unnatural phrasing, or misspelled words, there's a good chance that the message you're reading is fraudulent.
5. Verify the URLs you're using
Only shop from trusted online retail websites, and always confirm you're using the correct URL. It's easy to miss the extra 'n' in "amazonn.com," especially if the website is spoofed to look like the legitimate version of the website.
6. Look for HTTPS:// or the lock icon
Know and understand what secure vs. non-secure websites look like. Always look for HTTPS:// and the lock icon to confirm a site is safe and double-check that the shopping cart checkout process is also encrypted.
7. Check for tampering
Always check the gift card packaging before purchase to see if it has been tampered with. If fraudsters tampered with the packaging, it's likely that they also stole the code. Inform the store's staff and choose another card.
8. Use your best judgment
Cyber criminals use social engineering techniques to capitalize on our desire to get a "good deal." Remember, Cyber Monday or not, if a deal seems too good to be true, it probably is.
Stay aware and spot scams right away
Gift cards make good presents, but, unfortunately, they also make for good scam fuel. Fraudsters love gift cards because of their ease of use and lack of traceability as a payment method.
Understanding gift card scams and how they can unfold is valuable knowledge that can help protect you and your loved ones from more serious cyber threats.
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