The holiday season is around the corner, and cybercriminals are already targeting users with fake shopping deals and scams. A report from the U.S. Federal Trade Commission (FTC) revealed that Americans lost $148 million to gift card scams during the first nine months of 2021, which is an increase compared to last year.
The report stated that over 40,000 consumers used gift cards to pay a scammer in that time frame. Most consumers also paid fraudsters impersonating large companies or government agencies.
“Since 2018, both the numbers of consumers filing reports in which gift cards were the form of payment to scammers and the amount they have reported lost have increased steadily. Scammers favor gift cards because they are easy for people to find and buy, and they have fewer protections for buyers than some other payment options. Scammers can get quick cash, the transaction is largely irreversible, and they can remain anonymous,” the report said.
Top Gift Card Brands Impersonated by Hackers include:
- Target – reported a loss of $35 million
- Google Play- $17 million loss
- Apple – $16 million loss
- eBay – $10 Million
- Walmart – $6 million
Also Read: 3 Common Online Frauds to Watch Out in 2022
Other Key Findings
- Target gift cards emerged as the most popular choice for scammers in the reports received by the FTC. Target gift cards accounted for about $35 million in payments to scammers, more than twice as much as any other brand of gift cards.
- The median amount lost when consumers paid with Target gift cards, $2,500, was higher than any other card brand, with nearly a third reporting losses of $5,000 or more.
- One in four people who report losing money to fraud says it happened when a scammer tricked them into giving the numbers on the back of a gift card.
- Scams demanding gift cards often start with a phone call from someone impersonating a well-known business or government authority.
- Many people report that a scammer posing as Amazon or Apple told them to send pictures of the numbers on gift cards to fix a supposed security problem with their account.
“Gift cards are far more frequently reported than any other payment method for fraud, and the numbers have reached staggering new highs compared to past years. Scammers favor gift cards because they are easy for people to find and buy, and they have fewer protections for buyers than some other payment options. Scammers can get quick cash, the transaction is largely irreversible, and they can remain anonymous,” the report added.