Show Me the Money: Gift Cards and Scams
(WHTM) — Since the start of the pandemic, there has been an upsurge in scams. The Federal Trade Commission says that in Pennsylvania alone there were 70,000 scam reports in 2020.
That’s a 101% increase from 2019.
“What they report is exactly what ultimately gets reported to them, and we know scams are vastly under-reported, so the issue is much bigger than that,” said Kathy Stokes, Chief Prevention Officer of fraud for AARP.
Stokes says these scams have cost people more than $37 million. Topping the list are scams involving gift cards.
“It could be someone pretending to be a government agency like the Social Security Administration or the Internal Revenue Service. It could be someone pretending to be a loved one in need. Especially with the elderly, it’s the grandchild who is in big trouble and needs the money right away,” Stokes said.
The bad guy then tells the person to go to a store and put that money on a gift card right away. Often these people do not even know that they are victims.
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“The scammers are able to do this, they put us in a heightened state of emotion and when we’re there, just about anything seems plausible,” Stokes said.
Scammers love gift cards because they can get the money fast and move on to their next target.
“It’s also something that keeps scammers out of the banking system where red flags can appear if there’s a large amount of money moving. They can move small amounts of money into gift cards,” Stokes said.
“Do reputable organizations call you and ask for gift card payments? Absolutely not. In 100% of cases when someone asks you to pay a bond with a gift card, it’s a complete scam “, she explained.
Another scam to watch out for is online romance.
“Someone starts a conversation and before you know it it becomes an online romance. He’s a scammer and pretty soon that scammer is going to be asking for money, quite often via a gift card” , Stokes said.
People may think these warning signs are obvious, but older people in particular are fooled. That’s why it’s so important to talk to them before it happens.
“If you know about a specific scam, you are 80% less likely to engage in it, and if you engage in it, you are 40% less likely to lose money. “What does that tell us? Education is key, knowledge is power,” Stokes said.
Stokes said if you can spot a scam, you can stop a scam. So be sure to talk about it with the older people in your life.
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