Attorney General Brian L. Schwalb issued a consumer alert warning District residents about a growing wave of gift card scams targeting holiday shoppers, describing schemes that allow thieves to drain cards of their value without ever contacting the buyer or accessing personal information.
The alert outlines how so-called gift card “draining” scams work, what consumers should look for at stores, and how victims can report suspected fraud to District authorities.
“This holiday season, District residents should watch out for sophisticated gift card ‘draining’ scams that prey on shoppers who like to give gift cards as holiday presents,” Schwalb said. “Unlike traditional scams that focus on manipulating victims into revealing personal information, these scams involve draining the gift cards of the funds loaded on to them without the scammers even having to contact their victims.”
Schwalb urged anyone who believes they have been targeted to act quickly and notify authorities.
“Anyone who believes they have been scammed should immediately reach out to local law enforcement,” he said.
According to the Office of the Attorney General, gift card draining scams often begin before a card is ever purchased. In some cases, thieves remove unpurchased cards from store racks, scratch off the protective covering on the back to expose the PIN, record the information, and then reseal the card. Once a consumer buys and activates the card, the scammer monitors the balance online and empties it within minutes.
Other schemes involve replacing a card’s barcode with one that has already been activated. When the unsuspecting customer loads money onto the card, the funds are diverted to the scammer’s account. In still other cases, scammers scan card numbers while the cards remain on display and wait for them to be activated.
District officials warn that even cards that appear untouched may be compromised.
“Gift cards may seem like a safe and simple solution to gift giving, but scammers are finding new ways to drain their value before they’re even used,” said Karima Woods, commissioner of the Department of Insurance, Securities and Banking. “We urge District residents to inspect cards carefully and report suspicious activity to DISB or the OAG.”
Consumer protection officials recommend buying gift cards only from retailers that keep them secured, such as behind the register or in locked displays. Some stores reduce risk by displaying cards without barcodes and adding them only at the point of sale.
Paying by credit card can also provide an added layer of protection, since card issuers may be able to investigate and reverse fraudulent charges. Residents are also encouraged to register gift cards with the retailer when possible, keep receipts, and check balances directly through the business’s official website or in person.
District residents who believe they have fallen victim to a gift card draining scam are advised to retain the card and any purchase receipts and report the incident to the Department of Insurance, Securities and Banking at 202-727-8000 and the Office of the Attorney General’s Consumer Protection Office at 202-442-9828 or through oag.dc.gov.
“Scammers are adapting quickly, and consumers must do the same by staying alert and taking precautions before purchasing gift cards,” Woods said.
This scam isnt new and the local authorities know all about it and the worse part is when reported, authorities will tell you they can’t do anything. Hold a poll on those having been affected and having reported it to authorities and see what they were told.