DATA DOCTORS

Why scammers love using gift cards to steal money

Feb 11, 2023, 6:30 AM
(Pexels Photo)...
(Pexels Photo)
(Pexels Photo)

Q: How and why are gift cards used by scammers to steal money?

A: The use of gift cards is a favorite vehicle to extract money from victims for a variety of reasons: They are available everywhere, easy to buy, easy to use and generally impossible to trace.

The lack of recourse for victims is also attractive to scammers.

The common thread in these scams is to create fear and/or urgency in the victim so they are so worried that they aren’t thinking clearly when asked to buy the gift cards.

Usually, it’s presented as a way to pay a late fee or overdue bill to avoid repossession, legal action or the termination of critical services, such as power or water.

Social engineering tactics

The sophistication of predators’ psychological manipulation or “social engineering” has been honed over many years and is constantly tweaked to ensure higher levels of success.

Posing as someone from a utility company, the IRS or other government agencies they will demand immediate payment to avoid dire outcomes convincing their victims that they can avoid further issues if they pay via a gift card and will often stay on the phone with them while the victim drives to a local retailer.

They will also pose as a friend or relative that is having an emergency medical issue or has been arrested and needs financial help.

In all cases, once the gift card has been activated by the retailer, the scammers will ask the victim for the gift card number and any associated PIN if there is one.

Once that information has been given out, the scammers are off to the races to spend your money before you realize what has happened.

Closed vs. open-loop gift cards

Any gift card that can only be used at a specific retailer is known as a closed-loop card and many don’t use a PIN to secure them.

This is the preferred type of card for scammers, which is why they will often demand that a specific brand of gift card be purchased.

Open-loop gift cards are often bank issued and can be used to make purchases anywhere and they have added layers of security such as a PIN to protect users. They can also be frozen or tracked by the bank, which is why scammers like to avoid them.

GiftGhostBot

Gift cards that don’t need a PIN can be compromised without anyone ever contacting the victim.

A well-known online attack on retailers coined the GiftGhostBot uses an automated process to determine valid gift card numbers that have an open balance on them.

The automated bot randomly submits tens of thousands of card numbers per minute at websites that allow gift card holders to check their balances.

Once the bot confirms a gift card number with a balance that doesn’t require a PIN, it’s like giving the scammers cash.

That’s why it’s important for anyone with a legitimate gift card to consider using it quickly to avoid this type of loss.

Data Doctors

(Pexels Photo)...
Data Doctors

Tips for buying, setting up do-it-yourself security cameras

Options for security cameras that are easy to install and monitor via your smartphone can get overwhelming for even the tech-savvy consumer.
1 day ago
(Pexels Photo)...
Data Doctors

Here’s what we know about Facebook’s potential new monthly charge

It was easy to tell anyone that anything claiming Facebook would start charging users was a hoax, but all that changed last month.
8 days ago
(Photo by Phil Barker/Future Publishing via Getty Images)...
Data Doctors

A brief explainer on signs your computer could be infected

If you own a computer, here's a list of signs that could help you determine if your device has been infected.
15 days ago
(Pexels Photo)...
Data Doctors

Understanding email subscription notifications spamming

What you experience is "subscription bombing" used for reasons that can range from being a nuisance to distracting you from other activities.
22 days ago
(Mesa Police Department Photo)...
KTAR.com

Mesa police seeking 27-year-old woman wanted in murder case

Mesa police are searching for a 27-year-old woman wanted in a murder case after a man was found dead inside a bedroom in early February.
26 days ago
(Pexels Photo)...
Data Doctors

Benefits and concerns with using 3rd-party authentication apps

An alternative to setting up the text messaging-based authentication is by installing an app that provides the authentication codes.
29 days ago

Sponsored Articles

(Photo by Michael Matthey/picture alliance via Getty Images)...
Cox Communications

Valley Boys & Girls Club uses esports to help kids make healthy choices

KTAR’s Community Spotlight focuses on the Boys & Girls Club of the Valley and the work to incorporate esports into children's lives.
...
Fiesta Bowl Foundation

Celebrate 50 years of Vrbo Fiesta Bowl Parade magic!

Since its first production in the early 1970s, the Vrbo Fiesta Bowl Parade presented by Lerner & Rowe has been a staple of Valley traditions, bringing family fun and excitement to downtown Phoenix.
(Desert Institute for Spine Care photo)...
DESERT INSTITUTE FOR SPINE CARE

Why DISC is world renowned for back and neck pain treatments

Fifty percent of Americans and 90% of people at least 50 years old have some level of degenerative disc disease.
Why scammers love using gift cards to steal money