Gift card scams increasing, with some using AI, authorities warn
- Better Business Bureau reports a 50% increase in scams involving gift cards
- One popular scam has people cutting the security codes off the cards
- People can report instances of gift card scams to the FTC
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(NewsNation) — Gift cards are popular presents during the holidays. They’re more personal than cash but still give the recipient the freedom to purchase what they want.
But buying them does carry some risks. Federal agencies say gift card scams have gone through the roof this year.
Scammers are also getting more savvy, with some using artificial intelligence to clone a voice and pretending to be someone’s family member requesting money, often in the form of a gift card. Others coerce victims to put funds on gift cards that don’t exist.
The Better Business Bureau reports a 50% increase in scams involving gift cards this year. From January to September 2023, there were 29,000 cases totaling $147 million in losses.
Gift cards are fairly easy to access as they’re not always behind a store’s counter, allowing scammers to tamper with them.
A police sergeant in California gave an example of one scam his department was called about in a video on Facebook. Officers had been tracking this trick on social media for a while, Sgt. Barry Duggan of the Pinole Police Department said.
Duggan said in this case, someone took a gift card being sold at a store and cut the security code from the top of it.
This code gives the person who has it access to the money on the card, Duggan said.
“(Scammers) take the bottom half of the card, which really means nothing now, put it back into the envelope, re-glue it shut, and just like that, you have a brand new gift card that you think that you’re getting for your person for Christmas,” Duggan said.
Businesses are looking at ways to protect customers, but authorities say public education is the best defense.
Gift cards don’t have the same protections credit or debit cards do. Most of the time, once the money on the card is spent, it’s gone, although the Federal Trade Commission says people can ask for their money back from the company who sold it. If the money was frozen or not downloaded by the scammer, the company may give the money back.
People can also report the crime to the FTC at ReportFraud.ftc.gov.
