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Action Fraud warns shoppers to stay tuned to fraud as £6.5 million is lost to gift card fraud

Action Fraud is warning the public to #StayTunedToFraud as fraudsters are contacting victims, claiming to be from well-known organisations including Her Majesty’s Revenue and Customs (HMRC). Fraudsters are then tricking victims into making payments using iTunes gift cards.

  • Action Fraud is launching an awareness campaign with support from retailers to combat gift card fraud.
  • Between 1 April 2015 and 31 March 2018, 11,329 reports of fraud involving iTunes gift cards were made to Action Fraud.
  • In the same period, £6,561,380 was lost to this type of fraud, with the average person losing £579

A not so wonderful gift to receive

Action Fraud is warning the public to #StayTunedToFraud as fraudsters are contacting victims, claiming to be from well-known organisations including Her Majesty’s Revenue and Customs (HMRC). Fraudsters are then tricking victims into making payments using iTunes gift cards. 

Fraudsters are using online store gift cards to collect money from victims because they can be easily redeemed and sold on. The fraudsters don’t need the physical card to redeem the value and will instead use tactics to persuade victims to purchase gift cards in large amounts and read out the serial code on the back over the phone.

This problem is not just linked to iTunes gift cards and more recently, Action Fraud has seen a spike in fraudsters requesting Steam Cards as a way to gain upfront fees from unsuspecting victims.

In some cases fraudsters may refer to gift cards, including App Store and iTunes gift cards as ‘payment cards’ as a way to explain or legitimise this payment method.

A report by the National Fraud Intelligence Bureau (NFIB) shows that of the thousands of reports made to Action Fraud, in 32% of cases, the victims were aged between 60 and 74. The report also shows that between 1 April 2015 and 31 March 2018, victims reported losing a total of £6,561,380 to this fraud, with an average of £579 per person. 

Fighting fraud

Action Fraud is now working with retailers including Argos to help raise the profile of this fraud type with the general public. Argos has now put a £200 limit on the amount of iTunes vouchers one person can buy at a time. Staff in stores have also received education on how to spot the signs of this fraud to prevent customers from falling victim and posters bearing protect advice have been placed in stores to warn customers to spot the signs. 

Companies and campaign groups including Apple have also been working with retailers and HMRC to display guidance and signage in selected stores which mirrors the advice on their support page

How to protect yourself from gift card fraudsters:

  • Gift cards, including App Store and iTunes gift cards can only be used to purchase goods and services from the retailer named on the card. Never provide the numbers on the back of iTunes Gift Cards to someone you don't know.
  • No genuine organisation will ask you to pay taxes, bills or fees using iTunes Gift Cards, or any other type of voucher. If you’re contacted by anyone that asks you to do this, you’re very likely the target of a scam.
  • Always question unsolicited requests for your personal or financial information in case it’s a scam. Even if someone knows your basic details (such as your name and address), it doesn’t mean they are genuine.
  • Genuine banks or other trusted organisations won't pressure you to make a financial transaction on the spot. If something feels wrong then it’s usually right to question it.  
  • If you think you have been a victim of fraud, report it to Action Fraud online or by calling 0300 123 2040.

City of London Police’s National Coordinator for Economic Crime, Commander Karen Baxter, said:

“The cost of gift card fraud is high, both financially and emotionally. 

“Cruel fraudsters will prey on some of the most vulnerable members of society for their own personal gain, using every trick in the book to exploit money out of their victims.

“We are working closely with retailers to stop these fraudsters in their tracks and to raise awareness of this type of fraud.

“We urge people to #StayTunedToFraud to spot the signs of these scams in order to protect themselves.”

HMRC’s Director General of Customer Service, Angela MacDonald, said:

“These scammers are very confident, convincing, and utterly ruthless. We don’t want to see anyone fall victim to this, that’s why HMRC is working closely with crime fighters and retailers to help protect the public. Supermarket staff are often the last line of defence against these fraudsters however raising public awareness is the best safeguard against this vicious scam.”

Managing Director of Economic Crime at UK Finance, Katy Worobec, said:

“Criminals will do all they can to sound authentic, but if anyone asks you to pay a bill with a gift card then you can be sure they are a fake. Follow the advice of our Take Five campaign and always question any call, texts or emails in case they are a scam. Instead, contact the company directly using a known email or phone number.”

Case study, Margaret Smith, 69:

Margaret received a phone call last October, from a male who asked, ‘Is this Mrs Smith?’ She said yes and he continued to tell her that she owed money to HMRC for an unpaid tax bill, despite the fact that Margaret has been retired from her career in the NHS for some years. His tone was very convincing, and he explained that Margaret had ignored a letter from them which was sent in July. The sum of the unpaid tax was to the value of £1,287. He explained that if Margaret did not make her way to her nearest supermarket immediately to purchase this amount in ‘iTunes payment cards’ that she would be arrested. 

Margaret remained on the phone as she walked to her nearest supermarket, passing neighbours and even a police car on the way. Due to feeling intimidated and threatened by the man on the phone, she told no one what was going on. 

The man on the phone told Margaret not tell anyone what the vouchers were for as it was against HMRC’s rules and so Margaret commented to the cashier that these were for presents in the run up to Christmas. 

Margaret was instructed to scratch the numbers off as soon as she left the store. It was dark by this point, so she did this under streetlights. As she didn’t have her glasses, she gave some of the numbers incorrectly, which angered the caller. Margaret then explained that she normally calls her children as she always did around that time, much to the annoyance of the caller. 

Through confusion, Margaret placed the suspect on hold as she realised her son was trying to call her. She explained to him what had happened and he immediately told her that this was a fraud and to hang up.

The man then attempted to call back, however Margaret’s son, who was with her at this point, took over the call and told the caller not to call back. 

Following this, Margaret described herself as feeling confused and embarrassed. She said:

“I feel silly for falling for this scam, so much so that I haven’t even been able to tell some of my closest family members. 

“For a time afterwards, I was left feeling scared and vulnerable and it has made me very cautious and aware of these scams in the future. 

“The support I have received from Action Fraud and the ECVCU has been invaluable. They have given me advice on how not to fall victim to this again and have helped me to understand that this can happen to anyone, no matter what walk of life they are from.”

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