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Beware of Fake Gift Cards Scams

posted by: FraudWatch International date: Mar 23, 2016 category: All, Social Media comments: 0

We’ve all seen them being shared on Facebook or have received them as emails. You are given the chance to “Win a $500 Gift Card!” from a prominent Australian retailer. All you have to do is “call” a particular phone number or “share” the link on Facebook.

These fake gift cards do not usually contain viruses or malicious links, but they are spam which is distributed in order to make the creators a lot of money in an underhanded way.

So how do these scammers get away with it? Below is a sample scenario of a gift card scam:

  1. A consumer is sent an email which offers them a chance to win a gift card from an Australian retailer.
  2. The consumer is told to visit a particular URL, where they are asked to enter their name and phone number and click Continue.
  3. They are then sent through to another page, where they are asked to call a 1900 number (which is charged at $3.96 per min) to receive a unique PIN code. The website tells them to stay on the line until the process is complete.
  4. During the phone call, they are told to enter the PIN into the website field and then answer a few questions, using their telephone keypad.
  5. Once answers are provided, the consumer is told that they are in the draw for the gift card.
    Note: It doesn’t matter what you answer, you will still be told you are in the draw.

Once a consumer’s details are collected, they are sold to marketing companies and the spam cycle continues.

Methods used to trick consumers

There are a number of methods that are used to trick consumers into thinking that the offer or competition is coming from a legitimate Australian retailer.

  • The original spam email might mention a legitimate retailer by name, therefore for the rest of the process, the consumer thinks it is legitimate, even if the retailer is never mentioned again on any websites.
  • The fake gift cards or websites often use the same (or very similar) colour schemes as legitimate Australian retail brands. We instantly associate the offer with the relevant brand, even if no actual business names are used.
  • A lot of the important information about the competition – such as: how much the call will cost; how long the average call will take (up to 30 mins for some competitions) ; or who your information will be passed onto – is hidden in the fine print or Terms & Conditions, which people rarely read. There are often several disclaimers on the website which state that the major retailer is not affiliated with the promotion.

Can this type of scam be stopped?

The short answer is “No”.

Unfortunately, because there is no copyright/trademark misuse, and the sites are not directly impersonating the retailers, it is virtually impossible to pursue the criminals, as there are no grounds for legal action. The criminals are becoming very savvy and are running their scams in a way that ensures they are not technically breaking any laws.

This is causing irreparable brand damage for retailers, as consumers are being spammed with emails & text messages for competitions which they believe are being run by the legitimate retailer.

Once the email goes out, if only one person wins a gift card, the competition is legitimate. However, in the process of trying to win, the competition creators have made a huge amount of money from the phone calls made by all the unsuccessful customers. Consumers are spending up to $100 trying to win these gift cards and this is causing a great deal of angst against the legitimate retailers, who are innocent bystanders.

The bottom line is, don’t fall for these gift card scams. Major retailers will never use email or social media as a method for winning gift cards. They will usually put competitions on their own websites or social media profiles.

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