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Gift cards become favorite payment for scammers

Published: Mar. 11, 2021 at 10:12 PM CST
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AUBURN, Kan. (KWCH) - “Anyone that demands payment by gift cards is always a scammer.” That’s the warning coming from the Federal Trade Commission in response to a large uptick in the number of scams involving store bought gift cards.

Gift cards are the most popular gift purchased for the last 14 years in a row, and they’ve quickly become one of the preferred payment methods for scammers. It happened to Kansas resident Linda Wescott, who said the scammers were convincing enough to coerce her into spending thousands of dollars before she realized it was too late.

“They wanted $500 gift cards. And mostly from Target, and Best Buy,” Linda said.

In the midst of dealing with some serious health issues with her husband, Linda said she wasn’t thinking straight when she received an email. It appeared to be from Amazon alerting her to purchases she’d supposedly made. She knew she hadn’t actually made those purchases, so she called the number provided in the email.

“The person on the phone, said that they would correct it, and everything but they needed gift cards to cover the expense and that they would reimburse me,” she told Factfinder 12.

That person on the other end of the phone instructed Linda to drive to various stores and purchase several gift cards. Throughout the entire time it took to drive and buy the cards, the scammer stayed on the phone. Finally, at a Target store in Topeka, a person working the checkout warned Linda something seemed fishy.

“She just said, you know you’re being scammed,” Linda said.

Now suspicious, Linda hung up the phone but not before spending more than $4,000 that disappeared seconds after it was loaded onto the cards.

A nationwide Better Business Bureau study found losses from gift card scams nearly tripled between 2017 and 2020. The FTC reports that, during that time, losses neared $245 million in the U.S. alone. Denise Groene, with the Better Business Bureau, said the study revealed how widespread the problem is and why scammers are turning to gift cards at an increasing rate.

“Once you divulge that gift card number they can immediately wipe off the funds, and there is no recourse in order to get your money back,” Groene said. “In 2020, the average loss for payment by a gift card was $700. So, these scammers are using this tactic as another way to take advantage of consumers.”

So, what do you need to know so you don’t fall victim? The BBB said scammers are good at what they do and come up with plausible excuses to explain to their victims why gift cards are to be used as payment. Bottom line, no matter how good the excuse is, if someone says you have to pay with a gift card...It’s a scam. Hang up the phone. It’s something Linda Wescott said she wishes she’d done sooner, and she’ll now know to do from now on.

“I chalked it up to experience and saying that, okay for next time I better talk to the Lord first,” she said.

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