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Don’t fall prey to the latest consumer scam

September 2018 | Beth M. Moretti, Esq.
Many of us likely remember the prominent telephone scam a few years back where the scammer would leave a message claiming the potential victim owed money to the U.S. federal government – usually for back taxes, penalties or late charges overdue to the IRS.

The calls would often be accompanied by a “friendly warning” that the individual would be arrested if payment was not made immediately. In some cases, the warning would go a step further and claim, “The IRS takes these matters very seriously. Our agents may already be on the way to your home. You must respond with payment immediately in order to avoid going to jail.”

Once this scam and many other similar ones became so prevalent, credit card companies further enhanced their fraud detection systems to protect consumers. In a world where crime never takes a break, the scammers quickly formulated yet another devious scam that involved gift cards.

A typical scenario the scammers use is to claim your family members are in danger or will be harmed unless you respond immediately with payment. With the advanced technology of today, the voice on the phone may even be computer generated in an effort to avoid any chance of detection.

Another scheme that has come about is one where the consumer receives an email or message stating their “cloud has been severely compromised and the individual is in danger of losing everything,” such as a work presentation, family photos, a manuscript or any other important document. The possibility of harm to either our loved ones or the contents of our ever-growing clouds strikes fear in the hearts of many, and can put us into a state of fear where we will do almost anything to prevent it.

Criminals prey on two important factors with such scams: fear and urgency. Fear instilled in the target causes that individual to act emotionally and not thoroughly consider their decision to pay the scammers; meanwhile, the urgent plea that the target must pay “immediately” robs the consumer of the time needed to make a smart decision.

The most recent scam perpetuated by criminals involves gift cards, with the reason being these are untraceable form of currency and as good as cash. Since the fraud departments of credit card companies have become more sophisticated in recent years, such a transaction by the consumer is not considered fraudulent in their eyes as there was quid pro quo (money for a gift card). What the consumer does with that gift card after the purchase has nothing to do with the credit card used to purchase it. Most fraud departments will deny a dispute filed by the consumer and deem this scenario a “clean transaction.”

Newsday reported back in late May 2018 that the New York State Attorney General’s Office has launched an investigation into such gift card schemes. New York State Police apprehended a number of scam artists who were allegedly involved in what the AG’s office deemed a “shameful scheme to terrorize and rob New Yorkers.”

New York State authorities warn consumers never to give out personal information to a stranger or wire money to a stranger; consumers should also never pay a stranger in the form of gift cards or buy gift cards for the purpose of providing gift card numbers to someone else. The state’s investigation is still ongoing. If you or someone you know has innocently gotten caught up in a gift card scam, you should notify the authorities immediately.

If you have any questions about the matters discussed in this article, please contact your Legal Service Plan’s National Legal Office at 800-292-8063 or 631-231-1450.