How to protect your gift cards from fraud – NBC 5 Dallas-Fort Worth

Right now some of you are working to spend the gift cards you received during the holidays. A North Texas consumer said his brand new gift cards were unusable.

Read on to find out what consumers should look out for when redeeming or buying gift cards.

FRAUD ALERT ON NEW GIFT CARDS

With two new prepaid Visa gift cards in hand, Chris Siconolfi said he saw a warning while trying to register the cards.

“I hadn’t even opened the package and there are like big exclamation marks, fraudulent, call the number,” recalls Siconolfi.

He said he learned the $300 he loaded on each card was safe, but he couldn’t use the cards.

Siconolfi said he took them back to the Kroger store where he bought them. A manager exchanged them for new gift cards.

“These cards, when I signed up from his office, same thing,” Siconolfi said.

Kroger said it could not confirm whether the new cards were unusable. In an email to NBC 5 Responds, Kroger wrote, among other things, “We are currently working closely with US Bank; research the issue rigorously to fully understand the point of compromise.

Kroger refunded Siconolfi’s money and shared a link with tips to help consumers avoid and report suspected fraud.

US Bank, which issued the cards purchased by Siconolfi, told NBC 5 Responds: “Unfortunately, fraud can occur on any type of payment card, including gift cards. If a customer experiences any issues with their prepaid gift card, they are encouraged to call the number on the back of the card to speak to our prepaid customer support team.

We also checked with Visa, who authorized the cards. He said consumers should always contact the card issuer or program manager using the number on the back of the gift card.

Visa also wrote, in part, “Visa offers Visa Zero Liability protection to cardholders if the card is registered, but the cardholder must still go through their issuer/program manager to handle this dispute.”

HOW SCAMS WORK

“What appears to have happened in this case is somewhere in the chain between when the card was created and when this gentleman loaded funds onto the card, the number on the back of the card was compromise,” said John Breyault, vice-president. Chairman of Public Policy, Telecommunications and Fraud at the National Consumers League and Director of Fraud.org.

Breyault said the trade-off can be made through a number of low- or high-tech methods.

“Regardless of how the number is compromised, what tends to happen is that scammers maintain a list of compromised numbers and monitor them,” Breyault explained.

They wait for the money to be loaded onto the cards. Breyault said if the cards purchased by Siconolfi received a lot of balance checks, it could have triggered the fraud message.

“The gift card company probably noticed a lot of pings on that card number,” Breyault said.

TIPS TO PROTECT YOUR MONEY

  • Before purchasing a gift card, check the packaging for tears, scratches or signs of tampering. They can be subtle.
  • Make sure the card number on the receipt matches the actual card.
  • Keep this receipt.
  • If you notice a problem, immediately call the number on the back of the card.
  • For the gift cards you receive, use them. Don’t let them sit in your wallet.

“It just gives scammers who may have compromised the number more time to drain the funds from the card,” Breyault explained.

You can learn more about buying and using gift cards from the Federal Trade Commission here.

Report suspected scams to the FTC at ReportFraud.ftc.gov and the Texas Attorney General’s Office here.

If you have lost money, the FTC recommends filing a report with your local police department. A police report can help you when reporting a disputed transaction to the card issuer.

NBC 5 Responds is committed to finding your concerns and getting your money back. Our goal is to provide you with answers and, where possible, solutions and resolution. Call us at 844-5RESPND (844-573-7763) or fill out our customer complaint form.

Michael N. Clark