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What are gift card scams?

On Behalf of | Jan 10, 2019 | Consumer Protection

Gift cards are a convenient way to show someone you care. However, many scammers also use gift cards as a means of taking money from you, which is sometimes impossible to get back. In this case, the Federal Trade Commission offers the following information on common gift card scams and how to avoid them.

In many cases, a scam artist will contact you and claim to be an authorized entity. This includes the IRS, your utility company, or even a family member. The next step often involves putting money onto a gift card, which is then transferred to the person. You’ll be asked to provide the number on the front of the gift card as well as the PIN. From here, the scammer has access to the funds you supplied.

Other scams are even more nefarious. In some cases, the person will claim to be a member of the military and ask for a gift card as a means of supporting himself. The caller may also claim that you won a prize and to claim it you must pay a processing fee via gift cards. It’s crucial that you’re able to identify these scams, no matter what form they take. Also, be aware that any unsolicited demands for money are almost fraudulent. If you haven’t entered a contest it’s impossible to win one, and most authorized agencies don’t demand payment over the phone.

Fortunately, there are other steps you can take to protect yourself. When purchasing a gift card always keep the receipt. Also, make sure you fully understand the terms and conditions before using. Never purchase gift cards from an authorized seller, only purchase them from retail spaces. Visually inspect the card before you buy it to ensure the PIN isn’t visible, which indicates it’s been used. 

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