Gift Cards As Scam Payment Method – According To The FTC, $148 Million Reported Lost In First Nine Months Of 2021, More Than All Of 2020
Kehoe Law Firm, P.C. is making consumers aware that a Federal Trade Commission data spotlight shows that in the first nine months of 2021, consumers reported losing $148 million in scams where gift cards were used as the form of payment, an amount more than was reported in all of 2020.
Nearly 40,000 consumers reported using gift cards to pay a scammer in that time period. Most often, according to the FTC, consumers reported paying scammers who were impersonating large companies or government agencies.
One new development noted in the FTC’s data spotlight is the emergence of Target gift cards 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 brand of card, with nearly a third reporting losses of $5,000 or more.
Scammers also instructed consumers to purchase gift cards, regardless of the brand of card, from a Target store more often than any other location, according to the spotlight.
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. The spotlight also notes that consumers’ median reported loss to scammers when they pay with gift cards has increased from $700 to $1000.
The FTC has resources for consumers, including information on how to contact gift card companies to try to stop payments to scammers at ftc.gov/giftcards. The agency also has information for gift card retailers, including materials that can be posted in stores and used to train employees at ftc.gov/StopGiftCardScams.