Michigan Attorney General Dana Nessel is re-issuing her consumer alert, Paying with a Gift Card, as part of her Holiday Scams Campaign to urge consumers to be cautious of gift card scams, a growing form of fraud that preys on unsuspecting individuals. A Federal Trade Commission (FTC) report revealed that in 2023 alone, $217 million in gift card-related fraud was reported by consumers.

“Gift cards are a convenient and popular gift option, but they’ve also become a favorite tool for scammers,” said Nessel. “Education and vigilance are key to combatting gift card fraud. Stay informed and report suspicious activity to help protect yourself and your loved ones from these schemes.”

Gift card scams often follow a predictable pattern. Victims receive a call, email, or text message from someone claiming to represent a government agency, utility company, or tech support, or even posing as a friend or family member in need. The message is urgent and convincing. The sender or caller demands immediate payment using a gift card. Once the scammer obtains the gift card number and PIN, the funds are nearly impossible to recover.

Scammers using this method may claim to be from:

– Government Agencies: Fraudsters impersonate officials from the IRS or Social Security Administration, demanding payment for back taxes or fines. Fact: No legitimate government agency will demand immediate payment, especially via gift cards.

– Tech Support: Scammers pose as representatives from Apple or Microsoft, alleging issues with your computer. They request payment via gift card and may attempt to gain remote access to your device.

– Family or Friends in Emergencies: Using AI or voice cloning, scammers can impersonate loved ones, claiming they are in urgent need of help. Verify such claims independently.

– Sweepstakes or Prizes: Fraudsters say you’ve won a prize but must pay fees with a gift card to claim it. Ask yourself: Did you even enter the contest?

– Utility Companies: Imposters threaten to shut off your power or water unless you pay with a gift card. Legitimate utility companies don’t accept gift cards as payment.

– Romantic Scams: Scammers on dating websites may appeal to emotions, convincing victims to send gift cards as a form of financial assistance.

– Fake Overpayments: Scammers send counterfeit checks for more than the agreed amount, asking victims to use gift cards to refund the difference.

If you’ve purchased a gift card and have shared the card number and PIN with a scammer, follow these steps:

– Report the Scam to the Gift Card Issuer: Contact the company immediately. Some issuers, such as Amazon and Walmart, have programs to help recover funds.

– Request a Refund: Explain the situation to the card issuer. While refunds aren’t guaranteed, companies are increasing efforts to combat fraud.

– Report the Scam to Authorities: File a report with the FTC and the Attorney General’s Consumer Protection Team. These reports help law enforcement identify patterns and stop scammers.

To avoid falling victim to gift card scams:

– Never use gift cards to pay debts. Gift cards are intended for gifting–not for paying bills or fines.

– Be skeptical of urgent payment requests. Legitimate organizations will not pressure you to act immediately.

– Verify claims independently. Contact the company or individual directly using verified contact information.

– Be cautious with online and phone interactions. Don’t share gift card details unless you are sure of the recipient’s legitimacy.

To report fraud or if you have a general consumer complaint, you may contact the Attorney General’s Consumer Protection Team at:

Consumer Protection Team

P.O. Box 30213

Lansing, MI 48909

517-335-7599

Fax: 517-241-3771

Toll-free: 877-765-8388