A new report from the Federal Trade Commission (FTC) says that fraudsters are increasingly requesting to be paid with gift cards, with some even asking for certain brands such as Google Play and iTunes gift cards.
The FTC examined fraud reported directly to the agency and excluded reports about shop-at-home purchases, finding that from January through September of this year, gift cards and reload cards were reported as a payment method in 26 percent of the fraud reports, up from just 7 percent in 2015 — a 270 percent increase.
Fraudsters prefer these cards because they enable them to receive cash quickly, the transaction is usually irreversible, and they can remain anonymous. People report that they are typically directed to buy or reload cards at well-known stores like Walmart, Target, Walgreens, and CVS — and iTunes cards have been the top card brand by a wide margin since 2016. Google Play cards were not reported in significant numbers until this year.
In addition, losses due to this type of fraud reached $40 million in 2017, an increase from $20 million in 2015 and $27 million in 2016. In fact, through September of this year, losses have already reached $53 million.
The report adds that the gift cards aren’t just requested during tech support scams. Instead, gift cards and reloadable cards are the number one reported method of payment for impostor scams, where con artists pose as well-known businesses, family members, friends, or government agencies and deploy various tactics to compel people to pay.
“They may pretend to be the IRS and tell people they cannot use other payment methods because of their delinquent tax status,” according to the FTC. “They may even call iTunes cards ‘payment vouchers.’ To avoid alerting store personnel, they often direct people to buy cards from several different stores, and they tell people not to talk to anyone about why they are buying the cards.”