Fraudsters Increasingly Turn to Mobile Payments Technology, Specifically Gift Cards
Fraud is an increasingly prevalent issue for mobile payments, thanks to the growing number of avenues that fraudsters have to pursue. In fact, new word in from the Federal Trade Commission (FTC) says that fraud is increasingly preferring one particular avenue, and it’s one we’re all familiar with. No, it’s not bitcoin or Chinese yuan…it’s the Walmart gift card.
That’s right; as the FTC notes, the gift card is taking on a whole new life as the favored platform for fraud. Fraudsters love gift cards, often for the same reasons we do—they’re convenient, widely-accepted, and usable most anywhere—but for others as well.
Gift cards allow for ultimate anonymity; it’s largely impossible to tell who bought them and who used them. As little more than a temporary store of value with a store-facing interface, there’s next to no identifying information connected to them. Reversing the transaction is also nearly impossible.
The FTC report also noted that iTunes cards were the leading favorite with fraudsters, and have been by a substantial margin dating back to 2016. Major chain stores like Walmart, as well as Target and CVS, were also significant presences.
The market for fraud is massive; in 2017, losses due to gift card-related fraud hit $40 million. That’s up in a big way; in 2016, it was $26 million, and in 2015, it was $20 million. The amount has effectively doubled in just two years.
Gift cards are a great way to get someone a gift without having to know a whole lot about the person, or worse, directly interrogating the person for specific items. Yet as we see here, even gift cards have their downside. The standard protection measures seem to apply, though; don’t take anybody’s word for anything over the phone, and don’t send payment. The IRS generally doesn’t call people at their homes, at last report, and the more potential tricks we know about, the fewer the fraudsters have to work with.
With the holiday shopping season coming up, our spending on gift cards is likely to increase as well. Let’s all understand just what the stakes are here, and as we’re picking up an iTunes card for friends and family, let’s work to not get any for those random fraud cases.