Gift Card Fraud: The Latest Consumer Fraud Threat

Impostors Use Deceptive Claims to Swindle Consumers

Every day, criminals find new ways to scam people out of their money. For example, one of the latest-developing attack methods relies on convincing cardholders to buy gift cards, then turn the gift card number over to the fraudster.

Why would people do this? Because the fraudster convinces them it’s their only hope of avoiding a lengthy jail sentence.

IRS Phone Scam Bilks Consumers

As part of this most recent form of gift card fraud, a cardholder receives a call purportedly from the IRS. The caller informs the victim that they owe unpaid taxes, and tries to intimidate the victim by threatening lawsuits or even arrest, criminal charges and deportation.

The caller informs the victim that in order to avoid serious consequences, they must pay immediately in the form of prepaid cards—these include everything from Visa gift cards to iTunes cards. By the time the individual realizes they’ve been scammed, the cards balances are empty and the money is long gone.

This is a modern variation on a classic scam, with other versions involving wiring money to a designated account or sending funds via PayPal.

How Can I Avoid Gift Card Fraud?

If you’re faced with a phone call from any individual claiming to represent the IRS or any other official agency, keep these tips in mind:

  • The IRS will never call and demand instant payment for any reason. You will always receive written communication informing you of any amount owed.
  • The IRS will not demand that you pay a bill in a particular manner, such as a prepaid gift card or prepaid debit card.
  • Gift card fraud preys on the victim’s fears and anxiety. Don’t be afraid to request information in writing or to ask for contact information to verify the claim, as any legitimate situation will be backed up by documentation.
  • The IRS will not make use of scare tactics, such as threatening to contact the police if an individual fails to pay immediately. This is a clear sign that the caller is a fraudster.

If you receive any calls bearing the signs of gift card fraud, hang up immediately, and do not respond to, or engage the fraudster. If you are unsure whether a caller claiming to represent the IRS is legitimate, you should request the employee’s name badge number and phone number before taking any action. You can then contact the IRS at 1-800-366-4484 to determine if the caller is actually an IRS employee.
Also, remember that the IRS will never initiate contact with individuals via email, text, social media or any other method.

What If I’ve Been Victimized?

If you come to believe that a particular call may be fraudulent, but have already sent money as the fraudster requested, contact the police.

Scam artists constantly leverage new technologies and techniques in the struggle to steal money from unsuspecting consumers. Going forward, you will want to stay up-to-date on all developing fraud threats, and view any supposedly “official” communications with a skeptic eye in order to protect your identity and your wallet.

Did you buy a gift card to pay off a ‘debt’ before realizing it was a scam? Contact ECS – we can help you get a refund for your unused gift card quickly and easily.