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New Research Shows Prevalence of Gift Card Use as Payment in Scams

By April 23, 2021April 30th, 2021No Comments

Ron Mori

Nearly one in three adults say they or someone they know has been asked to purchase a gift card to pay a bill or some other obligation, according to the Gift Card Payment Scams report released by the AARP Fraud Watch Network.

The research is a component of a three-year effort launched in early April to raise awareness around gift card use as payment in scams, a common method employed by criminals to steal money.

“With the number of reported scams on the rise, criminals are increasingly turning to gift cards as an untraceable way to take money as a part of their schemes,” said Kathy Stokes, director of fraud prevention programs at AARP. “Unfortunately, once a person gives a criminal the gift card number and PIN, the money is virtually impossible to recover. Our three-year initiative will let consumers know that it is never legitimate when someone asks you to pay for some obligation with a gift card.”

The report found an alarming one-in-10 respondents acknowledge they bought a gift card after being asked by someone to pay a bill, another financial obligation or a fee to win a prize.

The AARP Fraud Watch Network is a free resource that equips consumers with up-to-date knowledge to spot and avoid scams. (Photo: AARP)

Gift cards as a form of payment are common across a wide range of impostor scams, but a quarter of U.S. adults report having paid by gift card to claim a large prize, sweepstakes or lottery. Scammers also coerced adults to buy gift cards to settle an issue with their Social Security account, pay upfront for a service or product, fix a computer or pay a utility bill.

“There are no two ways about it, asking to be paid by gift card is a scam 100 percent of the time,” said Stokes. “Yet, nearly a quarter of U.S. adults don’t know or are unsure whether or not payment by gift card equals a scam.”

Other survey findings:

  • Adults younger than 50 are more likely than adults over 50 to say they or someone they know have been directed to pay for an obligation using gift cards.
  • Most respondents who bought gift cards as requested said they purchased them at big-box retailers like Walmart or Target and at pharmacy chain stores like CVS or Walgreens.

An additional reminder: Beware of Internal Revenue Service imposters and scams. It’s crunch time for filing your taxes, so don’t fall for scams with criminals impersonating agents of the IRS. These con artists telephone people and tell them that they are in serious trouble for nonpayment of back taxes.

The Fraud Watch Network is advising consumers that legitimate IRS representatives do not:

  • Call you to demand immediate payment.
  • Call you about taxes owed without first having contacted you by mail.
  • Require you to use a specific payment method for your taxes, such as a prepaid debit card; or ask for credit or debit card numbers over the phone.
  • Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying.

For more information about the IRS scam and other tax-related frauds, visit Consumers who think that they are being targeted by a scammer can call the FWN helpline at (877) 908-3360 and speak with a trained counselor.

The AARP Fraud Watch Network is a free resource for all that equips consumers with up-to-date knowledge to spot and avoid scams, as well as connects those targeted by scams with our fraud helpline specialists, who provide support and guidance on what to do next. The Fraud Watch Network also advocates at the federal, state and local levels to enact policy changes that protect consumers and enforce laws.

Ron Mori is a member of the Washington, D.C., JACL chapter and manager of community, states and national affairs — multicultural leadership for AARP.