AARP Hearing Center
Gift-card fraud losses reached a “staggering” $148 million in the first nine months of 2021, when nearly 40,000 victims bought cards for criminals, federal officials warned on Dec. 8.
The Federal Trade Commission (FTC) alert, issued during the busiest shopping season of the year, states that gift-card fraud losses from January through September surpassed those for all of 2020. The agency’s warning highlights how Target has become the most popular destination for fraudsters.
- Target-branded gift cards represented $35 million of all reported gift-card frauds, the most of any single brand. Losses resulting from card purchases at Target were much higher than for other brands popular with crooks: Google Play, Apple, eBay and Walmart.
- Target was most often identified as the retail outlet swindlers instructed victims to buy gift cards from, regardless of whether the card being purchased was a Target card or another brand. Fraud victims also commonly were told to buy gift cards at Walmart, Best Buy, CVS and Walgreens, the warning states.
“Whenever someone demands to be paid with a gift card, that’s a scam. It’s just that simple,” Emma Fletcher, an FTC program analyst, cautions in a blog post. “Gift cards are for gifts, not for payments.”
Scammers favor gift cards “because they are easy for people to find and buy,” she adds. “Scammers can get quick cash, the transaction is largely irreversible, and they can remain anonymous.”
Criminals don’t need the physical card to gain access to its funds, just the numbers on the card. Typically, the funds are depleted quickly, leaving victims empty-handed.
The new FTC data is worrisome because the “vast majority of frauds” are not reported to the government, so the data reflects “only a fraction of the harm these scandals cause,” Fletcher writes.
