DA Rice: Gift Card Scams Now Swindle of Choice

Nassau County District Attorney Kathleen Rice said today that gift card scams are fast becoming one of the top "swindles of choice" by con artists as the DA's Economic Crimes Bureau sees an increase in the number of cases from the same time period last year.

In 2009, there were 50 cases of gift card-related scams in Nassau County. Just three months into 2010, that number is already at 25.

"We have seen an alarming number of gift card-related scams recently, and it is essential that people educate themselves and become aware of how some of these scam artists operate," Rice said. "Consumers have to stay one step ahead of the thieves who pull off these crimes."

Five common gift card-related scams encountered by the DA's Office are:   

• Real gift cards purchased with stolen credit card/debit card numbers. These cards are then sold on the street and online for pennies on the dollar. Victims think they are getting a great deal on a legit gift card, but once the fraud is discovered, stores will take action to recoup their losses. This can include sending repo men to reclaim merchandise bought with the card or demand payment.

• Gift cards that are re-encoded with a stolen credit card/debit card number on the magnetic stripe. Using a magnetic card encoder that is available online, scammers can put your credit card or debit card number on their card and use your card's account to shop. These cards are also sold on the street and online.

• Counterfeit or empty gift cards that are sold online or on the street, yet are actually worthless. Victims think they're getting a great deal, but by the time they realize their new gift card is worthless, the seller is long gone and so is the victim's money.

• Scammers also target gift cards that are still on the rack at stores. The thief copies down or scans the serial numbers on the back of the card, and puts it back on the rack. He then tracks the card online to determine when it is purchased by a victim and activated. Once it's activated, the scammer quickly uses the card number to make purchases online before the victim can use it.

• Unscrupulous cashiers can play a role in gift card scams as well, most commonly by having a gift card of their own behind the register. When a victim pays for a gift card, the cashier will swipe their own card instead of the victim's. The victim thinks the money they just handed the cashier has been put on the card, when in reality, their card is worthless.

Rice said that consumers must take necessary steps to protect themselves, their assets and their possessions.

• Only buy gift cards from the actual retailer or a reputable Web site. Always call the toll free phone number on the back of the card to check the balance after you purchase it and before you give it away as a gift. Always keep the receipt.

• Make sure nothing on the gift card is scratched off, such as serial numbers or pin numbers.

• Register your card with the company, if possible. Some companies will give you recourse if the card is lost or stolen.

• If it seems too good to be true, it probably is.

"Scammers have advanced their trade, and are more adept than ever at stealing your money," Rice said. "It is essential that everyone protect their assets, use their common sense and contact law enforcement if they think they've been a victim. Trust your instincts and protect yourself."

If you think you have been a victim of any type of scam, please contact the DA's Complaints Bureau at 516-571-3505.