There are many new gift cards in recent years, which means it is likely you will be buying or receiving them for the holidays. This has become a huge global market projected to grow at an increasing rate over time, reaching 2 trillion by 2027. Needless to say, cybercriminals and online fraudsters haven’t missed out on this trend as they’ve developed their own underground industry focused on gift cards. Scams are constantly evolving, and the holiday season is no exception. This year, criminal fraudsters will use gift cards to trick you into handing over sensitive personal and financial information in order to make a profit. Make sure that you become aware of these tricks so that your online experience festive times remains safe. Continue reading to learn about common gift card scams to be aware of and how to prevent becoming a victim.
The bad guys will sometimes go straight to the source and probe for your gift card balance by using a bot to pull information from back-end IT systems at retailers and other organizations. With this information, they can use the card as if they were the official holder of said credit or charge account. This is an area that’s ripe for exploitation, considering Americans alone are sitting on $15 billion in unused gift cards and credits.
This category of scams uses the lure of a promised prize in order to trick users into paying money. The fraudster will contact you and tell you that they have won something big, but need some small sum of money to claim it- say, for example, a car or holiday. Needless to say, there is no prize at all, just another scam!
These cards can be the perfect way to trick someone into giving up their personal information. This is similar to a classic phishing attack, where the recipient is approached via email, text, or social media with an offer for a large gift card balance. In order to claim it, they need to fill in some personal and possibly financial details which will then be sold on the dark web or used themselves for identity fraud.
Scamming doesn’t just happen online. Sometimes, a scammer will buy gift cards in bulk with stolen credit card numbers and PINs at stores or find out the secret number and PIN when they come up for sale near them. They might go to extreme lengths to disguise their actions like using stickers that recover your pin number on the back of gift cards. Depending on what kind of card it is, they may even use it themselves before you know about it, or make duplicates that can be used both in-store and online.
Scammers often use social engineering to force victims into a false sense of urgency. The scammer will typically claim that the victim owes unpaid taxes or an outstanding bill and threaten them, but it is only classic social engineering designed to force those affected into hurrying their decision-making process. The scam could arrive in the form of a phishing email, text message (also known as “vishing”), or phone call; they may even specify which type of card they want you to use for payment. All these should be red flags. As the FTC says, no real business or government will require payment via gift card.
Keeping user awareness levels high is such a large part of the battle against gift card scams. If you follow these tips, you will be able to stay safe online:
- Only buy from stores that have gift cards protected behind cases
- Don’t buy gift cards from discount sites, stick with purchasing them directly from the original source
- Buy gift cards that require you to create a PIN
- If there’s an offer that looks and sounds too good to be true, most likely, it is
- Check the balance as soon as you activate the card and use it as soon as possible
- Never give your personal details away online without being sure it’s a reputable service or company
- Understand that an official or government worker will never unsolicitedly call you asking for your financial details