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

WASHINGTON, April 6, 2021 /PRNewswire/ -- 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 today to raise awareness around gift card use as payment in scams, a common tool used 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.

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, to fix a computer, or to 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.

The AARP Fraud Watch Network is a free resource for all that equips consumers with up-to-date knowledge to spot and avoid scams, and 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.

About AARP
AARP is the nation's largest nonprofit, nonpartisan organization dedicated to empowering people 50 and older to choose how they live as they age. With a nationwide presence and nearly 38 million members, AARP strengthens communities and advocates for what matters most to families: health security, financial stability and personal fulfillment. AARP also produces the nation's largest circulation publications: AARP The Magazine and AARP Bulletin. To learn more, visit www.aarp.org, www.aarp.org/espanol or follow @AARP, @AARPenEspanol and @AARPadvocates, @AliadosAdelante on social media.

SOURCE AARP

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