The IRS is warning everyone about an increase in gift card scams. In these scams, people pretend to be a government agent or a bill collector and tell you to pay for a fake charge using a gift card. Always remember: if someone insists that you pay with a gift card, they are trying to scam you.
How the gift card scam works
Scammers often pretend to be from the IRS and will ask for gift cards over the phone. The FTC warns about other ways scammers might trick you into giving them gift cards:
- They might call pretending to be from a utility company, threatening to turn off your power or water if you don’t pay a bill. They’ll ask you to pay with a gift card.
- They could be sellers on online auction sites who ask for gift cards to “buy” big items like cars, motorcycles, boats, RVs, tractors, and electronics.
- They might pose as a service member who needs to sell something quickly before deployment, trying to get your sympathy.
- They could call claiming you’ve won a prize but need to pay administrative fees or some other charge with a gift card.
- They might buy something from you online, send a check for more than the item’s price, and ask you to return the difference with a gift card. Later, you find out the check was fake.
Always be careful and remember that any request to pay by gift card is likely a scam.
Scammers can reach you through text messages, emails, or social media. Sometimes, they might even hack into the email of someone you know, like a family member, and use that person’s information to trick you into sending them gift cards.
No matter the situation, the scammer will tell you to buy gift cards from popular stores like Walmart, Target, Walgreens, or CVS. Then, they will ask you for the gift card numbers and PINs.
These scammers are usually very pushy and will try to make you act quickly by giving false reasons for needing the gift cards urgently. Always be cautious and think twice before acting.
Why do scammers use gift cards?
Gift cards are hard to trace and can be sold for cash. Once a scammer has your gift card number and PIN, they can get the money on the card.
What to do if you paid a scammer with a gift card:
If you think you’ve paid a scammer with a gift card, contact the company that issued the card right away. Tell them what happened and ask if they can refund your money or replace the gift card. You need to do this quickly. It might not always work, but it’s worth trying.
Also, report the scam to the FTC at their website or by calling 1-877-FTC-HELP. You should report it to your state’s Attorney General too. You can find contact information for them at naag.org.