Shoppers Alerted to Increased Incidents of Gift Card Fraud

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(Columbus) – With holiday spending in Ohio expected to top $32 billion this year according to a recent forecast from the Ohio Council of Retail Merchants, the Ohio Department of Commerce’s Division of Financial Institutions is encouraging shoppers to stay alert to the growing threat of gift card scams and other holiday-related cons. 

Recent data from the FBI showed Ohio was one of the top 10 states for fraud complaints last year, with over $278 million in reported losses. As consumers rush to purchase last-minute gifts, fraudsters exploit the convenience of gift cards through various schemes. These may include tricking individuals into purchasing cards for fictitious reasons, such as fake delivery fees or phony fines, or stealing funds directly from legitimately purchased cards.

“The holiday season brings a rush of excitement as we buy gifts for everyone on our lists. Unfortunately, there are individuals out there always looking for quick and easy ways to scam you out of your money,” said Division Superintendent Kevin Allard. “Fortunately, there are simple and easy steps you can take to avoid these scams and have a happy and enjoyable holiday season with your family and friends.”

To ensure financial safety during the shopping season, the Division recommends that consumers stay alert to warning signs. These may include requests for payment via gift card for any services or fines, as well as unsolicited messages offering free or discounted cards. Ohioans can also protect themselves by following the below guidelines:

• Inspect the packaging: Before purchasing a gift card in a store, check to make sure the packaging hasn’t been tampered with. Run a finger over the back to ensure no stickers have been placed over the barcode and verify that the PIN remains covered.
• Purchase directly: Buy gift cards from trusted retailers or directly from the merchant’s official website rather than third-party sites.
• Pay with caution: Legitimate businesses and government agencies will never ask for payment via gift card. If you do receive such a request, it is a scam.
• Register your card: If the retailer offers the option, register the gift card immediately to protect the balance in the event the card is lost or stolen.
• Avoid balance-check websites: Be wary of third-party websites that offer to check gift card balances. These are often used to steal card information – along with the funds contained on them.

Holiday scams come in many forms, and gift card fraud is just one of several tactics scammers may attempt to use this time of year. The Ohio Department of Commerce urges consumers to be on guard for some additional red flags that often signal a scam:

• Urgency and intimidation: Scammers often claim there is an emergency, such as a family member who is in trouble or an overdue bill that requires immediate payment in order to avoid arrest or service shutoff. If it feels rushed, it’s probably wrong.
• Unusual payment requests: Be skeptical of anyone claiming to be from a government agency, utility company, or tech support service who demands payment specifically via gift card, cryptocurrency, or wire transfer. Legitimate entities will not ask for payment via those methods.
• Too-good-to-be-true deals: We’re all looking for great deals during the holidays, but treat unsolicited emails and text messages offering high-value gift cards for free or at a discount with a high level of skepticism. These are often phishing attempts designed to steal your personal data.
• Secrecy instructions: Fraudsters frequently instruct victims to keep the transaction a secret or coach them on what to tell store clerks when purchasing high-value cards. If you receive such instructions, be on alert. 

If you believe you’ve been the victim of gift card fraud, be sure to report it immediately to the gift card company and ask if a refund can be issued. Victims should also report gift card fraud to the Federal Trade Commission at ReportFraud.ftc.gov.

For additional information on how to stay safe this holiday season, Ohio consumers are encouraged to access a wide range of resources available from the Ohio DFI Office of Consumer Affairs.