Tis the season……for fraud! Unfortunately, the closer to Christmas we get the more scam activity seems to escalate. Fraudsters come up with all sorts of ways to part innocent people from their hard-earned money. Today, let’s focus on Gift Card Draining Scams and how to protect yourself from becoming a victim.
❄️Gift cards have increasingly become one of the most popular Christmas gifts. What do you get that person who has everything?? Why a gift card of course! Unfortunately, scammers have found a way to target gift cards even before you get a chance to give them. Gift card draining scams involve a fraudster stealing or copying the card’s information either before or after purchase and then emptying the balance before the recipient has time to use it. Sounds a little far-fetched but it happens every day. Here are common methods used in this scam.
🎄Stolen numbers: Scammers take gift cards off the shelf and steal the card information. They either take pictures or recordings of the number and PIN and place the card back on the shelf. An unsuspecting customer buys the card and as soon as it is activated the scammer drains the balance.
🎄Counterfeit swaps: Sometimes instead of stealing the numbers, scammers will simply swap out the real gift card with a counterfeit one. Again, consumers make purchases of these fake cards unknowingly and the scammer gets the balance.
🎄Waiting for Activation: Fraudsters monitor the card online or use bots to check balances once the card is bought and activated.
🎄Draining funds: As soon as they see an available balance, the scammer goes to work. The money gets transferred to other accounts or used in digital marketplaces. And by the time the gift is presented, that money is long gone.
🎄Phishing and Vishing: Savvy scammers are also able to drain gift card balances by tricking the card’s owner into giving away sensitive information through emails or phone calls. This is performed in many different ways, usually a scammer contacts their victim through a romance or grandparent scam. The victim is instructed to buy gift cards and read the information off to the scammer who then drains the card balance.
❄️Retailers are working to make gift card racks more secure. In the meantime, we must do what we can to protect ourselves from becoming a victim. Here are some things to keep in mind when purchasing gift cards this Holiday season and beyond:
🎁Examine the gift card and packaging. Look for signs of tampering such as peeling stickers, scratched off PIN codes, or signs the card has been opened and resealed. Check for tears or cuts around the borders where a knife could possibly cut through.
🎁Choose cards from behind the counter. Cards kept behind the register or handed to you directly by a store employee are less likely to have been tampered with.
🎁When you have the option, choose digital gift cards. Buying directly from a store website significantly reduces tampering risk. However, NEVER give the digital card information to anyone over the phone, email, or any other form of communication.
🎁Use the card quickly. Once you give the card, it is a good idea for the recipient to spend it quickly. This will help prevent a scammer from finding out the balance and draining it.
🎁Always save the receipt and monitor balances. By keeping the receipt as proof of purchase and encouraging the recipient to check the balance online until it is totally spent, you can catch any fraud or draining that might occur. It can also aid in reimbursement if fraud occurs in some cases.
Tis the season…..to be fraud aware! Gift card draining is not a present anyone wants, well, unless you are a scammer. By taking the time to inspect the card before purchasing and then closely monitoring the balance after, you can help to ensure the gifts you give are used by the person intended and not a thief.
Merry Christmas! Wishing everyone a safe, happy, fraud free holiday!
Tara Montgomery
Exchange Bank of Alabama
Fraud Specialist
(256) 691-0328
