Scam Alert: Fraudsters stealing gift card balances!

Here’s how the scam works: The fraudster scoops a handful of cards from the display rack — they’re worthless until a customer puts money on them — and takes them out of the store. They then record or photograph the card’s ID number, peeling or scratching off the cover that blocks some or all of the number. The number is re-covered with a new sticker or scratch strip (which can be bought online) and returned to the store.

The fraudster then waits for a customer to buy the compromised card, repeatedly checking online to see if and when a card has been loaded with cash.

Ottawa police have heard of the scam, but in most cases the retailers reimburse the losses so police reports aren’t filed, said Staff Sgt. James Ritchie of the Fraud Unit.
“It’s not something we’ve seen a lot of, but it’s definitely happening,” he said. “It’s particularly common over Christmas because they know nothing is going to get spent before the 25th. They begin checking on the 24th and start unloading them as fast as they can.”

Different cards have different security measures. Most are glued to cardboard or protected with stickers or scratch off coverings. Some prepaid credit cards come in foil pouches, but a determined thief can get around those safety measures, sometimes opening and re-sealing the pouches, Ritchie said.

“The stores could eliminate this easily if they just kept them behind the counter, but of course they want them out where people can touch them, you know, get them in people’s faces,” he said.

“If I was buying a gift card, I’d choose one from the very back. If someone’s tampering with them, they’d put them at the very front so they’ll get picked. Even better, choose a gift card that is stored behind the counter.”

Be alert when buying gift cards. Look for tampering or smudging or for a card that doesn’t quite match the others and then avoid it, he said. And be sure to keep the receipt, so you can prove the card was bought legitimately.

Theft of money off a gift card isn’t covered by the Canadian Consumer Protection Act, but anyone who has been ripped off should report it to police or the Canadian Anti-Fraud Centre at 1-888-495-8501

The scam joins a long list of crimes involving gift cards, among them telephone fraudsters who convince their victims that some debt — back taxes, a grandchild’s bail bond, the administration fee for a lottery win — must be paid with a gift card. Dishonest online vendors sometimes ask for payment in gift cards, which police point out, is just like mailing an envelope of cash to someone.