BBB study shows gift card use, scams growing

Investigations

KNOXVILLE, Tenn. (WATE) — Gift cards continue to grow in popularity. However, scammers are taking advantage of their widespread use.

Today, a Better Business Bureau study shows gift card payment scams are growing fast.

Credit and debit cards come with a number of safety measures including suspicious activity alerts, passwords, and pin numbers to protect your account. But with gift cards, there are no security measures, especially if you provide the numbers on the back of the card to someone who is trying to steal from you.

We reported last year how Gail Madden, a severe diabetic and double amputee, believed she had qualified for free money from the Community Development Block Grant being offered to her because of her disability.

The sum was $200,000, but there were fees she had to pay.

Gail borrowed $2,200 to purchase gift cards.

“They’re asking for $250 more before they send me my package of money,” Madden said. “This was the first one I sent, it was for $500.”

Tony Binkley is president of the East Tennessee Better Business Bureau. He says a BBB report shows gift cards are increasingly becoming the common thread among many scams including government grants or phony sweepstakes, romance scams, and online sales of nonexistent vehicles.

“It’s almost like cash,” Binkley said. “When you give someone a gift card or give them the numbers off the back of a gift card, or take a picture and send it to them, that money is untraceable, un-trackable and it’s gone.

“Sometimes scammers will give you an excuse of why a gift is the best method. Maybe they’ll say this keeps me from knowing your personal information, know your credit card information, or knowing your banking information. So they try to tell you it is a real secure form of payment when in reality it is the most insecure form of payment you can make.”

In November 2019, we reported how Patsy, a former seamstress keeps herself busy quilting, after losing a lot of money. A widow since 2010, she admitted to being vulnerable to a man living overseas wooing her in a romance scam.

In 2017, she started sending him gift cards so he could come home.

“I spent a lot of money on him,” Patsy said. “Right now it’s close to $42,000. Ripped off for being stupid.”

New data from the BBB shows the most vulnerable to gift card scams are people over 65.
And the latest records show the number of people who have fallen victim tripled between 2017 and 2020.

“Now it’s just easier to go to the neighborhood store and buy a gift card,” Binkley said. “You can buy them literally everywhere you go. Scammers know they are easy to access and they’re easy to get to. So, they make it easy for you.

“The thing to remember, if somebody asks you to pay something with a gift card, it is most likely a scam. Period.”

Some of the red flags to know and avoid include no government agency will request money through gift cards. Don’t let anyone try to convince you over the phone or by text message that gift cards are a safe way to make a payment.

Also, keep the receipt when buying a gift card. If problems arise later your receipt proves the card was paid for and activated.

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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