How to Spot and Avoid Check Scams

According to data from the FTC, gift card scams result in hundreds of millions of dollars in losses every year and remain one of the most prevalent types of fraud. These scams are challenging to track, and once money is spent, recovering it is nearly impossible.

In Hawaii, residents are particularly vulnerable to these scams, which can come through phone calls, emails, text messages, or other channels.  In this article, we’ll explain how gift card scams work, how people fall victim to them, how to avoid them and what actions to take if you do become a victim. Read on for more information or contact HFS FCU for assistance..

What Is a Gift Card Scam?

Gift card scams are simple, effective, and nearly irreversible, which is why they are so common today. Scammers typically pressure victims—often by impersonating someone familiar—to buy gift cards and then share the card number and PIN. Once this information is provided to the scammer, the funds are transferred immediately and cannot be retrieved.  These scams are also very difficult to trace.

The bottom line is that any urgent request for a gift card, no matter who is asking, is likely a scam. Legitimate organizations will never ask you to pay fees, taxes, or make an immediate payment using a gift card.

How Do Gift Card Scams Work? A Step-by-Step Breakdown

Here’s a look at how gift card scams typically work:

• You’re contacted via text message, email, phone spoof or direct message on social media by a scammer posing as a person you know, such as an employer, family member, or government official.
• While impersonating someone familiar, the scammer urges you to purchase a specific number of gift cards quickly. They often mention an urgent consequence if you do not act promptly.
• If you fall for the scam, you will be instructed to send the card number and PIN to the scammer after purchasing the gift card.
• Once they receive this information, the fraudsters can drain the gift card balance immediately.

Common Types of Gift Card Scams

Here are some of the most prevalent types of gift card scams affecting residents of Hawaii:

Government Impersonation Scams

Scammers frequently impersonate IRS agents or Social Security representatives, demanding payment via gift cards to avoid arrest, account suspension, or tax issues. Military personnel may also be targeted with fake threats of VA account suspensions. These scams usually occur through phone calls or email.

Please note that no legitimate government agency will ever request gift cards as payment.

Tech Support Scams

One prevalent scheme involves scammers impersonating tech companies like Apple, Microsoft, or Google. They claim that a device is compromised and that the only way to fix it is to make a payment using gift cards. These scammers often make direct phone calls to execute their scams, attempting to keep victims on the line from the initial threat until they secure the victim’s gift card information. 

The scams are often coordinated with other cyberattacks.

Apple Gift Card Scams

Apple gift cards are among the most commonly requested gift cards in scams due to their widespread availability. Common scams involving Apple gift cards include tech support scams, prize-winning claims, and romance scams. It’s important to note that Apple never asks customers to make payments using gift cards. Consumers should be informed on how to protect their information effectively.

Amazon Gift Card Scams

Scammers also frequently impersonate Amazon, sending fake order confirmations via email or posing as customer service agents to request gift cards to process refunds. These scams mainly target frequent online shoppers and leverage Amazon’s branding to deceive consumers. 

A legitimate Amazon representative will never request payment with a gift card to resolve delivery issues, cancel orders, or issue refunds. Be especially cautious during the holiday season when higher order volumes can make fake shipping notices and purchase alerts appear more convincing.

Online Marketplace Scams

Online marketplaces like Facebook Marketplace and Craigslist are hotspots for scammers. Fraudsters typically create fake accounts and insist on completing transactions using gift cards instead of traditional payment methods. These scams are particularly common in areas like Hawaii due to the prevalence of buy-sell-trade groups online.

Romance and Military Impersonation Scams

Another common scam involves romance and military impersonation. In these schemes, fraudsters pose as deployed service members or make connections on dating apps or social media to build trust with their victims. After establishing a relationship, they request payment via gift cards.

These types of social engineering scams can be challenging to identify, as the context of military deployment can lend credibility, while romance scams aim to create emotional connections.

How to Identify Common Gift Card Scams

If you think you might be at risk of a gift card scam, look for these warning signs:  

• Unsolicited contact asking for a gift card payment.
• A sense of urgency or pressure to comply with a gift card request.
• A phone call where someone requests gift cards and tries to keep you on the line throughout the purchase process.

How to Avoid Gift Card Scams

The best way to avoid gift card scams is to be aware of common scams and the red flags to look out for. If you receive an unsolicited request to purchase gift cards, hang up the phone or report the email as spam. To verify if a request is legitimate, contact the official number of the person or organization that supposedly contacted you. Additionally, you can set up account alerts through HFS FCU to quickly catch any unauthorized activity. Education is crucial, so we encourage our members to share this knowledge with family and friends to raise awareness in the community.

What to Do If You’ve Been Targeted or Victimized

Unfortunately, gift card scams are challenging to reverse. However, even if you cannot recover your funds, you can report the incident to help prevent it from happening to someone else. Here’s what to do if you become a victim of gift card fraud:  

• Contact the card issuer’s fraud line and see if they can freeze the funds on the card. This can only be done if funds haven’t been spent.
• Contact the FTC or visit reportfraud.ftc.gov to report the scam. You can also file a report with local law enforcement and the Hawaii Department of Commerce and Consumer Affairs.
• Contact HFS FCU, especially if you think any account activity may be tied to the scam.

Don’t Let Scammers Win: HFS FCU Has Your Back

As a member-first credit union, we go the extra mile to ensure your account information remains safe, and we stay vigilant about emerging threats. We take pride in our local knowledge and personalized support for members, providing access to fraud monitoring tools to assist them both before and after incidents occur.  

Interested in joining HFS FCU? Contact us today to learn more about our membership requirements or schedule an appointment.

FAQs

How do gift card scams work, and why are they so hard to reverse?

Gift card scams deceive individuals into purchasing gift cards and sharing their PINs. These scams are challenging to reverse because gift cards function like cash and do not offer the same protections as credit cards. Additionally, there is no identity verification required for spending the cards.

What should I do immediately if I have already sent a gift card code to a scammer?

If you’ve sent a gift card code to a scammer, contact the gift card issuer right away to report the scam. In some cases, they may be able to freeze the funds or even issue a replacement gift card. You should also report the fraud to the Federal Trade Commission (FTC) or your local authorities.

Are Apple gift card scams and Amazon gift card scams more common than other types?

Yes, Apple and Amazon gift cards are among the most frequently targeted by scammers.

How can I tell the difference between a real emergency and a gift card scam targeting a family member?

Always verify the claimed emergency. This is a common tactic used in scams. Typically, family members or legitimate organizations will not ask you to send funds via prepaid or gift cards.

Why do scammers specifically ask for gift cards instead of bank transfers or cash?

Scammers often choose gift cards because they are easily accessible, difficult to trace, and transactions are irreversible.

What red flags should I look for if I receive an unexpected call or message asking me to buy gift cards?

Be wary of any request to pay a fine, bill, or fee with a gift card, as this is a major red flag. Most legitimate companies will never accept payment in this manner.

Are military members and veterans more likely to be targeted by gift card scams?

Yes, it is common for scammers to exploit the steady income and frequent relocations of military members.

Can HFS FCU help me if I suspect my account was affected by a gift card scam?

Absolutely. As a member-focused credit union, we have a variety of resources available to help keep your account safe and secure, whether it involves a gift card scam or any other issue.