Payment by gift card? It’s a scam!
Gift cards are popular and convenient … and not just for gifts. Con artists have latched onto gift cards as a convenient form of payment in their scams. In a 2021 AARP survey, nearly 1 in 3 adults said they or someone they know had been asked at some point to purchase a gift card to pay a bill, fee or some other debt or obligation or to claim a prize.
Signs to watch for:
- You’re directed to buy one or more gift cards — often referred to as “electronic vouchers” — as a quick means of making payment.
- You’re told to share the numbers on the back of the gift cards, by reading them off or sending a picture.
- The request comes from someone you wouldn’t expect to ask for money this way:
- A Social Security Warning of a Problem with Your Account
Social Security numbers are the skeleton key to identity theft. And what better way to get someone’s Social Security number than by pretending to be from Social Security?
It's a lesson fraudsters have learned well. Social Security scams are a common form of government impostor scam, in which crooks pose as government officials to get you to send money or give up personal and financial data for use in identity theft. Nearly half of Americans were targeted by a Social Security scam in the three months prior to November 2020, according to a survey by SimplyWise, a company that provides tech tools for retirement planning.
One common tactic involves fake Social Security Administration (SSA) employees calling people with warnings that their Social Security numbers have been linked to criminal activity and suspended. The scammers ask you to confirm your number so they can reactivate it or issue you a new one, for a fee. This is no emergency but a ploy to get money and personal data: Social Security does not block or suspend numbers, ever.
This con is sometimes executed via robocall — the recording provides a number for you to call to remedy the problem. In another version, the caller says your bank account is at risk due to the illicit activity and offers to help you keep it safe.
- A Utility Company Warning of An Imminent Shutoff
Utility shutoff scams are a type of phishing scam in which hackers pose as representatives of a company you do business with to get money from you.
This scam can take several forms. Sometimes, you get an email that looks like it’s from the utility company, claiming they will, for example, shut off your power because you haven’t paid your electric bill. In other cases, you get a phone call with the same information, or a person may even show up at your door.
However, the next part of the scam is always the same: The fraudsters say you must pay your bill immediately to avoid disconnection. They may request your bank or credit card information. They may also ask for payment in a form that’s harder to trace, such as a wire transfer, a prepaid debit card, a gift card, or even cryptocurrency. Scammers who come to your door may even ask you to pay in cash on the spot.
- A Lottery Company Promising a Big Prize — Once You Pay Some Fees Upfront
Who wouldn’t want to win thousands or even millions of dollars, or the chance to go on a luxury vacation? There are many legitimate sweepstakes and contests out there, and the idea of winning some fabulous prize can be mighty alluring. Con artists get that, and they exploit your eagerness to score that big check or dream trip.
The initial contact in a sweepstakes scam is often a call, an email, a social media notification or a piece of direct mail offering congratulations for winning some big contest. But there’s a catch: You’ll be asked to pay a fee, taxes, or customs duties to claim your prize. The scammers may request bank account information, urge you to send money via a wire transfer, or suggest you purchase gift cards and give them the card numbers.
Older people are popular targets: According to an August 2020 Better Business Bureau study, 80 percent of the money lost to sweepstakes scammers comes from people over age 65.
- A Grandchild Needing Bail or Facing Another Financial Emergency
Scam artists will use any leverage they can get to separate you from your money. Sadly, that includes exploiting grandparents’ love and concern for their grandchildren, giving rise to a breed of impostor fraud specifically targeting older Americans.
Grandparent scams typically work something like this: The victim gets a call from someone posing as his or her grandchild. This person explains, in a frantic-sounding voice, that he or she is in trouble: There’s been an accident, or an arrest, or a robbery. To up the drama and urgency, the caller might claim to be hospitalized or stuck in a foreign country; to make the impersonation more convincing, he or she will throw in a few family particulars, gleaned from the actual grandchild’s social media activity.
The impostor offers just enough detail about where and how the emergency happened to make it seem plausible and perhaps turns the phone over to another scammer who pretends to be a doctor, police officer or lawyer and backs up the story. The “grandchild” implores the target to wire money immediately, adding an anxious plea: “Don’t tell Mom and Dad!”
Fraudsters have also been known to ply this trick by email, text message and social media. Amid the coronavirus pandemic, the Federal Trade Commission (FTC) and the FBI have warned of an uptick in grandparent scams as crooks play on emotional vulnerability and heightened fear about loved ones falling ill.
Grandparent scams and related cons are common — from 2015 through the first quarter of 2020, the FTC logged more than 91,000 reports of crooks posing as a relative or friend of the victim. And they can be lucrative: A New York City man was charged in May 2020 in an alleged scam spree that bilked five-figure sums from grandparents across New Jersey, according to state and federal investigators.