BBB Investigation: New research shows gift card scam reports rose by 50% over last year
Published 9:37 am Thursday, November 16, 2023
The following is from the Better Business Bureau:
Today’s scammers want gift cards as payment, leaving those unaware of this tactic vulnerable to schemes designed to commit fraud. Better Business Bureau (BBB) research shows fraud reports to BBB Scam Tracker involving gift cards as a form of payment spiked in the first three quarters of 2023, up 50% from the same period the year prior. Scammers have doubled down on gift cards as a method to steal money from consumers – especially online shoppers – leading retailers to implement new
fraud prevention solutions in response.
A new BBB study update, “Growth of gift card scams causes retailers to innovate solutions,” examines patterns of reports, dives deep into court documents, reviews financial losses, and highlights interviews with affected consumers. The goal is to educate everyone on the tactics scammers use with gift cards.
● Technology, like algorithms meant to detect fraudulent behavior, helps retailers stop scammers in their tracks and sometimes return money to customers.
● Fraudsters leverage international networks to convince consumers to hand over gift cards.
● Advance fee loans, government impersonation, phishing and lottery/sweepstakes top the list of scam types used most often to obtain gift cards.
● Scammers frequently seek gift cards from big-box, technology and online stores.
Key statistics reported to BBB and Federal Trade Commission (FTC) since 2020 about gift card payment scams:
● 3,918 BBB Scam Tracker reports; and
● 177,074 reports to the Federal Trade Commission’s Consumer Sentinel Network with $690 million in losses.
In 2021, BBB’s International Investigations Initiative examined gift card payment scams in an in-depth study, “Gift card payment scams: BBB reveals why scammers love gift cards.” Since then, retailers have identified several methods to protect consumers, but warn that it is impossible to stop all scams as fraudsters continue to find ways around safeguards.
BBB tips to spot a gift card scam
● Be wary of anyone asking for payment with a gift card, including “government” agencies. No legitimate government organization will ask you to pay with a gift card.
● If you suspect a scam, contact the gift card seller, the actual business or government organization supposedly asking for money, and BBB to ask if you are dealing with a scammer. To find contact information, go directly to the organization’s website rather than search for their customer service number, which can be spoofed by scammers.
● Keep all information related to your purchase if you are scammed, because some retailers may require that information for refunds.
● If you suspect fraud, act immediately, contact the gift card seller or the number on the back of the card to report it.
● Follow advice and report suspected scams to BBB Scam Tracker and the Federal Trade Commission.