GIFT CARD SCAMS

As the Holiday season approaches, so do the scams. A popular type of scam is called the “Gift Card Scam”. There are several types of scams involving gift cards that you, the consumer, should be alert to. Below, we will talk about some of the most common gift card scams of 2018, and ways to avoid being scammed. eBay/Craigslist Gift Card Selling Scam: This is a newer scam, and can be done on either eBay or Craigslist. Craigslist is a more common target due to their not having any policies protecting sellers from chargebacks and scams. The scam mainly targets people selling gift cards on Craigslist. A scammer will contact you and ask for you to sell them the gift card without meeting them in person. The scammer will then send you a payment, usually with PayPal in an attempt to show they are willing to pay for the card. Next, the scammer will cancel the payment and drain the funds from the gift card immediately. This can be done by use of hacked PayPal accounts making the scammer untraceable. You will end up with a reversed or canceled payment and a drained gift card. It is best to avoid, if possible, selling gift cards on eBay or Craigslist. Police Impersonation Scam: In this scam, the criminal (scammer) uses Caller ID “Spoofing” to impersonate a police department. This would allow the scammer to make up a fake caller ID making the call to you appear to be from your local police agency, even though the caller could be thousands of miles away. There are different ways these scammers try to scam you. One of the most used ways is to tell you a relative of yours has been arrested and needs to post a bond or bail. The scammer would typically tell you this is out of state or nowhere near your location to make it harder for you to verify the authenticity of a non-local agency. The scammer will then ask you to give them a certain amount of money in iTunes gift cards. If you refuse they may threaten you or tell you your loved one is in serious trouble. They will often stay on the line with you until you complete the purchase and give them the gift card numbers. They will hang up and you will never hear from them again. “Instant Loan” Scam: This particular scam is usually done to people who have quite a bit of debt, or targets older folks who may be in need of some extra money. A person who is supposed to represent a loan company calls with a “great deal” on an instant loan, often at 0% interest. The scammer will tell you that you are pre-qualified for it-and that you only need to pay the processing fees along with some other fees with gift cards. To most people this scam is obvious. To those who are desperate or not familiar with lending practices, it may not be so clear-and you could end up losing quite a bit of money. Phone “Refund” Scam: This scam is somewhat similar to the “Instant Loan” scam. Consumers may be contacted by someone who claims to represent their phone, cable or utility company. The “representative” on the other line will tell you that you are eligible for thousands of dollars due to overpaying for your service, or even that a class action lawsuit has resulted in the award of damages. Once again, there is a catch. The scammers will want you to pay a processing fee and ask for it in gift cards. You may be promised a deposit of the cash after the cards have been received. You will give the gift cards to the scammer and receive nothing in return. “Jury Duty Warrant” Scam: Also similar to the police impersonation scams mentioned above, but with a different twist. The scammer may try to impersonate the police or a judicial branch of government. They will call you, at times threatening or intimidating. The scammers will claim that you have a warrant out for your arrest because you failed to show up or file an exception for jury duty. Because this is a very realistic and scary scenario this scam if very effective. Often the scammer may say that the Sheriff’s Office or local Police Department are on the way to your residence to arrest you. They will tell you the only way to avoid going to jail is to give them gift cards as payment. Of course, there are no police coming to your home at all, you are being scammed. There are several ways to check and see if you are involved in a potential scam. One is the Internal Revenue Service (IRS) Consumer Alerts and also the Federal Trade Commission. Lastly, never be afraid or embarrassed. Scammers are hoping to make you feel this way so you will not ask other people for help. Don’t fall for it. These people are very good at what they do, but there are many more good people in the world who are willing and wanting to help. Some ways to avoid being scammed: * Stay level headed and think through the situation * Don’t give away any personal information * Don’t panic if the caller has information about you * If it sounds too good to be true, it is * Know that authorities will never ask for gift cards Clay Perry Security/Fraud Manager Texas First Bank