‘Gift card draining’ scam on the rise heading into the holidays
(KSTP) – A gift card scam known as ‘card draining’ is skyrocketing in the homestretch to the holidays.
The Federal Bureau of Investigation is warning that gift cards could activate with a $0 balance due to this rising scam.
Priskila Basnet of Woodbury said she recently received a $50 gift card but when she went to use it, found out it had been compromised.
“It kept on saying it’s ‘invalid’ and the gift card is associated with a different account so, you know, I thought it was a mistake,” Basnet said.
The Better Business Bureau serving Minnesota and North Dakota told 5 EYEWITNESS NEWS ‘card draining’ can happen in two different ways.
One involves a thief going into a store and writing down the numbers associated with a gift card, including the 16-digit code and activation PIN.
“So they have that information and then they’re waiting for someone to activate that card. The moment they do, the sophistication around it, the scammers are alerted that it’s been activated and they will instantly drain that card,” explained Bao Vang, vice president of communications for the regional BBB.
Another ‘card draining’ method involves covering the barcode with a sticker that is associated with a different card.
“So then the clerk will scan that barcode to add the funds but those funds, instead of on your new gift card, it’s going to be placed right on the scammer’s account and you have no idea,” Vang said.
Vang noted that BBB’s online Scam Tracker is receiving a growing number of reports about card draining right now.
“There has never been a larger time in our history where gift cards are being purchased for the holiday season,” Vang said. “So the scammers are increasing their targets, their tactics and strategies.”
The BBB recommends inspecting a gift card closely before you buy it to check for any signs of tampering and look for extra stickers that seem out of place.
Basnet said that, in her case, the retailer was able to refund her friend who had purchased the gift card.
“It’s really sad and disheartening that people can do things like this,” Basnet said. “I want people to know that that this happens. And the scam overall needs to be stopped.”
To learn more about ‘card draining’ and how to protect yourself, the BBB created this list of tips.