Gift Cards Remain Scammers’ Favorite Way To Extract Money From Consumers

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The Federal Trade Commission (FTC) recently released its analysis showing that the number one way scammers have extracted money from defrauded consumers is through gift cards.  In its press release, found here, the FTC stated that that consumers have spent almost $245 million since 2018 on gift cards that went to scammers.  The FTC’s data analysis is located here. Scammers will convince consumers that they need to pay the scammer (for example, by claiming to be a government agency that needs to be paid off to avoid penalties, or by claiming to be a business offering special promotional pricing for a service) and that the payment needs to be made in gift cards.  They will then have the consumer go to an outlet to purchase a gift card and provide the scammer with the PIN on the cards.  Reports to the FTC indicate that eBay is the gift card of choice for scammers.

To try to combat this, the FTC has rolled out new materials that retailers can place at their front counters, which can be found here.  The FTC’s advice to consumers, though, is straightforward: “Whenever someone demands to be paid with a gift card, that’s a scam. Gift cards are for gifts, not for payment. If you paid someone with a gift card by giving them the numbers on the card, keep the card and your receipt, and report it to the card issuer immediately.”

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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