Over the last several weeks, there has been a number of stories about gift card fraud, including this one from Missouri and this story from New Jersey. These stories have one thing in common: Stolen credit cards being used to buy gift cards, which are sometimes resold online for cash (a form of money laundry). In some cases, like the Missouri story above, the credit cards are stolen from another state and used to buy merchandise, which are then shipped to the home state of the perpertrators. This is all done to make tracing the transactions more difficult for law enforcement.
Some retailers are beggining to educate their employees on how to spot and report these unusual gift card purchases. That is how a recent fraud case was thwarted at a K-Mart in Brantree, MA where a store employee noticed unusual gift card activity and reported the issue to a supervisor which led to the arrest of the perpertrators. In another recent case in Colorado Springs, the cooperation of Walgreens and K-Mart led to the diactivation of $200 worth of gift cards purchased with a stolen credit card.
If you find yourself a victim of credit card theft, in addition to calling the credit card company to diactivate the card, review your card transactions to see if the card has been used. If the card has been used to purchase gift cards, contact the merchant or store where the gift cards were purchased and find out what their process is for deactivating gift cards purchased with stolen credit cards. You may have to get law enforcement involved but it is important that you act fast before the gift cards are used, which brings me to my next point: How do you avoid being at the recieving end of stolen gift cards? Stay tuned for the next post which will address this issue.