It doesn’t matter what the occasion is, gift cards are a popular gift. However, if you are giving them, or getting them, you could be part of a scam. There are more variations of a gift card scam out there than you might think, and it includes both digital and physical cards.
It doesn’t matter where you get the card, here are two ways that scammers use them to make money:
The “Assistant Gift Card Scam”
Small businesses are often the target of the assistant gift card scam. We see this a lot in the financial services industry, or really any other industry where you have a service professional who has assistant that manages administrative tasks.
The scam works like this: the scammer scopes out the service professionals website, he might make a phone call or send an email seeking out a secretary or assistant, and then reaches out to that assistant usually via email or even text, spoofing the communication medium and posing as the service professional.
In that communication, the criminal posing as the service professional requests the administrator go out and buy five gift cards for clients and to send pictures of the gift cards with the activation codes on the back scratched off.
Once the criminal receives the photos with the codes, he immediately cashes them in.
The best way to prevent this, is always by getting on the telephone and calling your boss to make sure that the request for gift cards is a legitimate one.
Using a Gift Card to Transform it to Cash
If you get a $200 gift card to a store, and then it’s stolen, it’s like you have lost money. It’s essentially the same as if someone stole $200 from your pocket. You might be wondering how a scammer can turn a gift card into cash. Here’s how it works:
- The thief takes a gift card out of your gym locker.
- Instead of using it it at the store, he puts an ad online offering it at a $50 discount saying he’s in a rough spot and needs cash.
- Someone takes him up on the offer and sends him $150 via Venmo.
- The thief then goes and uses the gift card at the store. He takes the item he bought and sells it on eBay….and never ships the card to the person who bought it.
- So now, he has the $150 plus the cash he got from selling the item he bought.
Infiltrating Gift Card Accounts Online
Another way that a thief can scam people by using gift cards is by taking advantage of software. They use a botnet which is also a robot network of computers design to hack, to gain access to an online gift card account. Here’s how it works:
- You log into your gift card account.
- The botnet also tries to log into your account. They randomly keep trying until they guess the password/code.
- Though it’s not guaranteed, the botnet could guess the password/code for your gift card, and if it does, you can say goodbye to the balance.
Protecting Yourself from Gift Card Scams
- Don’t believe everything you read online. If a deal is too good to be true, it probably is.
- Anytime a service professional requests a straighter buy a bunch of gift cards, get on the phone and talk to that person directly to confirm the legitimacy of the request.
- Buy a gift card straight from the source, not from a random Facebook ad.
- Don’t buy any gift cards at a high traffic location as it’s easy for scammers to hide their scam.
- Change the security code of the card if you can.
- If you have access to an online account, change your password and username.
- As soon as you suspect something fraudulent is going on, report it.
- Spend the money on the card as quickly as possible.
Written by Robert Siciliano, CEO of Credit Parent, Head of Training & Security Awareness Expert at Protect Now, #1 Best Selling Amazon author, Media Personality & Architect of CSI Protection Certification.