Home Home Tech Scammers fleece unsuspecting gift card users of $5 million: report
Scammers fleece unsuspecting gift card users of $5 million: report Featured

More than $5 million was lost to scams in 2018 involving gift cards — a 38% increase compared to 2017 — with iTunes cards accounting for $3.1 million in losses, according to Scamwatch, the competition watchdog ACCC’s scam warning service.

Losses on iTunes gift cards in 2018 represented a 156% increase from the $1.23 million reported in 2017 – and Scamwatch also says it has seen an increase in reports involving other gift cards such as Google Play, Amazon, and Steam cards, and Australia Post Load & Go pre-paid debit cards.

And losses to scams where non-iTunes gift cards were used as payment increased by 530% in 2018 to about $1 million.

“Scammers like to get gift cards as payment as it’s easy for them to quickly sell them on secondary markets and pocket the cash,” ACCC deputy chair Delia Rickard said.

“It’s concerning that the scammers are now demanding payment in other forms of gift cards. This is likely in response to scam warnings about using iTunes cards for paying scammers that are in stores like supermarkets and on the cards themselves.

“It’s clear the scammers are diversifying their payments to try get around these warnings, so it’s vital people are aware that no legitimate company or government agency will ever ask you to make a payment with any sort of gift card.” 

Scamwatch lists several common types of scams involving gift cards such as:

ATO impersonation scams

  • The scammer pretends to be from the Australian Taxation Office and claims there is a warrant for their victim’s arrest. The scammer asks the victim to pay an immediate ‘fine’ using gift cards or bitcoin, and claims police will come and arrest them if not.

Catch-a-hacker scam

  • The scammer calls and pretends to be from a law-enforcement agency or internet provider and convinces the victim they are trying to trace the location of a hacker who has compromised the victim’s computer. They claim they can do this by sending money from the victim’s bank account or via gift card serial numbers.

Scamwatch warns that victims are also tricked into giving up personal details with the promise of gift cards.

According to Scamwatch, scammers entice victims to participate in surveys by promising gift cards as a prize but says, however, that the surveys extract personal information such as your name, date of birth, address details and even financial details like your credit card or bank numbers.

“If anyone asks for payment using a gift card, it is a scam, simple as that,” Rickard said.

“If you paid a scammer with a gift card, report it as soon as possible. Call the company that issued the gift card and tell them the gift card was used in a scam. It’s very difficult to get your money back but the sooner you report it, the better your chances.”

Scamwatch says businesses that sell iTunes, Google Wallet and similar gift cards are encouraged to inform their staff about these scams so that they can help warn customers.

“If staff are informed they can identify the warning signs of a scam when they notice a customer spending large amounts of money on gift cards,” Rickard said.

To make a report on the Scamwatch website, or find more information about where to get help, click here.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

 

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