Christmas is almost here, are you ready? If you're like me, you are scrambling to find just the right gift for that person on your shopping list who seems to have everything. Don't worry though, there's always the gift card to fall back on.
Even though that might not seem like a personal enough gift for Christmas, they are in high demand. This holiday season, retailers will sell an estimated $27 billion worth of gift cards. Before you run out and buy one, you have to know about this new scam making the rounds.
We've warned you about these types of scams before, telling you four sure signs of a gift card scam. This new one though is even more devious.
New gift card scam details
In the past, these scams involved a criminal sending random people emails or texts offering deeply discounted gift cards. What they were really doing was trying to get the victim's credit card information. There never actually was a gift card. That's just one example of these attacks.
What's happening now is, the criminal goes to a retail store and writes the gift card number down while it's still for sale. They then scratch off the strip covering the security code on the back of the card. After they write down the security code, they use a replacement strip to cover it and walk out of the store. Scandalous!
Once you purchase the card and load it with money, the scammer receives notification that funds are available. They get these notifications from software that frequently checks card balances online.
To stay ahead of authorities, the thief can then begin a form of money laundering. One popular way is to sell an item they don't own yet on sites like Craigslist or eBay. The scammer can then buy that item online with the stolen gift card, have it shipped directly to the purchaser and receive clean money from the sale.
How to avoid this racket
Staying ahead of criminals can be a difficult task. Here are a few suggestions on how to avoid this type of scam:
- Be cautious when buying gift cards - If you go to a retail location to purchase a gift card, make sure they are stored behind the counter. If the store has them out on a rack, make sure they are in a sealed package that won't allow someone to access the security code. Then, make sure to thoroughly inspect the package for tampering. If it seems like someone has messed with it, do not buy it.
- Change the PIN ASAP- If it's possible, change the PIN as soon as you can. Register the card immediately and then change it. Make sure to tell the recipient what the new PIN is and why you changed it. Also, tell them they should use the card ASAP.
- Buy online - It's best to purchase the gift card directly from the retailer on its website. The scammer won't be able to get their hands on those cards.
- Protect your gadget - To prevent hackers from accessing your gift card numbers on your gadget, you should have it protected with strong security software.
This isn't the first scam and it definitely won't be the last. Criminals are always finding new ways to rip us off. Keep checking in with our Happening Now section and we'll let you know about all of the newest scams.