North Dakota AG: Gift card scams on the increase

(Bismarck, ND) -- As the holidays approach, Attorney General Wayne Stenehjem reminds North Dakotans that gift cards are for gifts.

“Only buy gift cards if you are giving them as gifts to family or friends, because gift cards are a favorite tool used by scam artists,” cautioned Stenehjem.

According to the Federal Trade Commission, many gift card scams start with a phone call from someone impersonating a government agency. Scammers may claim that they will freeze your accounts or threaten to arrest you, unless you make an immediate payment. The scammers will even stay on the phone with their victims while they go to the store to purchase specific gift cards or a prepaid card. Once the victim has purchased the gift cards, the scam artist asks them for the numbers on the back of the cards. Those numbers are all anyone needs to go online from anywhere in the world and transfer the balance of the gift card into their own account.

“No government agency ever accepts gift cards to pay a debt,” Stenehjem warned.

The Attorney General’s Consumer Protection division reports that in the last two weeks, they have received nine reports from victims of gift card scams, with losses totaling $45,000. The victims, who range in age from 26 to 75, reportedly fell for different versions of the scam, including:

• telephone calls from fake government officials threatening the victim would lose their benefits;
• phony sweepstakes officials pretending the victim had won a prize but needed to make an upfront payment;
• fake online job listings; and
• false account payment error emails supposedly from Amazon and other well-known businesses.

“The one thing all these scams had in common is that the victim was told to purchase prepaid cards and gift cards,” said Parrell Grossman, director of the Consumer Protection division. “The government and legitimate companies do not demand that you make payments using gift cards. If that is what you are told, it is guaranteed to be a scam,” he continued.