According to the Federal Trade Commission, fraud using gift cards has increased by 270% since 2015. Scammers are using techniques that fool even well-educated people with fraud knowledge. Today, we are going to share how this scam has repeatedly affected us at Chosen Payments and despite our vast knowledge of fraud, we took the bait.
Our Marketing Manager, Jim Luff was having lunch when he checked his email and found an email that seemed to originate from our CEO, Jeff Brodsly. The email address was very similar to the real email address used by our CEO. It was so close that Jim opened it, read it and saw a message that said Jeff was in a meeting and wanted to give 10 people in the meeting an iTunes gift card valued at $100 each. Jim was instructed to rush to the nearest Target, Walmart or Walgreens and buy the gift cards. He promptly complied and purchased $1000 worth of gift cards. He replied to the email again to let Jeff know the cards were in his possession. The next email Jim received advised him to scratch off the strip covering the codes on the back of each card and provide the code for each card. Once this step was completed by email, Jim took the extra step of sending Jeff a text message to let him know the codes were sitting in “his” mailbox since “Jeff” seemed convey urgency. This is when things began to unravel as the real Jeff Brodsly had no idea what Jim was talking about. We’ll spare you the details – Target and Apple worked with Jim and a refund was issued and the codes were voided by Apple.
The same scam has been attempted with three other Chosen Payments staffers. One was not as lucky as Jim and sustained a loss. Recently, two brand new employees of Chosen Payments were targeted. You can imagine that as new employees, they were eager to please our CEO. They were thrilled that he had selected them to carry out a personal mission for “him”. Fortunately, we were able to thwart their purchases before they happened. That made us realize how important it is to get this message out to you. These thieves are smart and obviously use intel to manipulate their victims. As an example, we all know that Jeff is a very generous man. Giving away $100 to everyone in a meeting would not be out of character for Jeff at all. Giving the task to Jim would also be totally normal. In other words, thieves are preying on vulnerability. Who would not want to help their CEO when asked for a favor? Watch those email addresses on these types of requests. Make sure your staff knows about this scam.
If someone calls or emails with urgent news or a convincing story and pressures you to pay them or obtain a gift card, like an iTunes or Google Play card, and then give them the codes on the back of the card – STOP! It is likely a scam. Gift cards are the number one payment method imposters demand. They pose as IRS officials and say you’re in trouble for not paying taxes. They say they are helping your family member with an urgent situation such as paying a public utility company threatening to shut off services. In another variation of the scam they say you’ve won a contest or a prize. But, to get it, you need to pay some fees with a gift card. Scammers will say anything to get your money. They know how to play into fear, hope and sympathy. Once they’ve got the code on the back of the card, the money is gone and virtually impossible to trace. Knowing how these scams work can help you avoid them, and you can help even more by passing this information on to people you know. Always be sure to check the email address very closely of any incoming emails asking you to purchase gift cards on behalf of someone else. A single added or missing character can easily fool you into believing the request is authentic request.
If you or one of your employees falls for the scam you should report it to the gift card issuer as soon as possible. Here are some helpful numbers for the gift card issuers frequently used by thieves:
- Call 1 (888) 280-4331
- Learn about Amazon gift card scams here.
- Call 1 (855) 466-4438
- Report gift card scams online here.
- Learn about Google Play gift card scams here.
- Call 1 (800) 275-2273 then press “6” for other, then say “operator” to be connected to a live representative.
- Learn about iTunes gift card scams and how to report them here
In addition to calling the gift card issuer, you should also report it to the FTC by filing a complaint: ftc.gov/complaint. Your report might help law enforcement agencies launch investigations that could stop fraudsters.