Vouchers and gift cards you can buy at the counter at high street stores such as M&S and Boots are being viciously targeted by fraudsters in two new scams.
One could see vouchers drained of cash before the recipients have time to spend them. The other has cost victims thousands of pounds of their life savings.
Experts warn these scams could only get worse in the run-up to Christmas as the number of people buying vouchers for their loved ones rises.
Scam 1 – Voucher draining
When you buy vouchers at a high street store, they are typically displayed on a shelf near the tills for shoppers to pick up and pay for.
When you buy the voucher, it is scanned by the cashier and loaded up with a sum of money – ready to be handed over to a friend of family member to spend on whatever they choose at the retailer.
To use the voucher, the recipient typically inputs the voucher and pin number on the retailer’s website if making an online purchase, or shares these details at the till if shopping in person.
But in a new scam known as voucher draining, fraudsters are intercepting these vouchers and spending the money on them before they ever reach their intended recipients.
Fraudsters do this by noting down or taking pictures of voucher numbers and pins before the vouchers have been sold.
Two new gift card scams are on the rise in stores and the problem could get worse in the run up to Christmas experts warn
Sometimes the pin number is covered by foil or a sticker or the voucher is glued to a piece of card to prevent it being seen by anyone except the correct recipient. However, fraudsters will simply discreetly take the foil or sticker off or peel the voucher away from the card – and replace it or leave it uncovered.
At this point, this information they have obtained is useless because they have not yet been loaded up with cash.
However, once the vouchers have been bought and have money on them, they can be used by the fraudster – so long as they drain the balance before it is spent by the genuine recipient.
This crime is likely to become more widespread in the run up to Christmas as the turnover of vouchers on display rises thanks to shoppers buying them as festive gifts.
Luke Charters, MP for York Outer, was a victim of this scam when he received a £75 M&S giftcard from a family member after the birth of his child.
When they went to use the gift card, he found there was no money at all on it.
‘Within 20 minutes the gift card being purchased in an M&S in Leeds, it had been spent in another branch in Manchester,’ he says.
A transaction of £40 was initially made to test the balance before fraudsters spent the remaining £35.
Now Charters says he has heard from his constituents in York Outer that they have been targeted by similar scams. One said their grandmother was left without a Christmas present after a scammer drained the M&S gift card they bought her as a present.
‘This type of scam is rising and it could be rising exponentially, It could get worse in the run-up to Christmas,’ he says.
‘My message to retailers would quite simply be: Lock the cards up,’ says Charters.
Scam 2. Voucher courierÂ
In this cruel scam, criminals phone up potential victims and pretend to be from official organisations such as HMRC, DVLA or the police.
They will invent a reason why victims must immediately purchase gift cards from retailers such as Apple, Amazon or Boots. They could claim, for example, that they are undercover police officers who need help catching criminals. They convince the victim to buy gift cards and hand them to the criminals as bait – with the promise that the ‘real’ police will safely return them and pay back the balance.
In other instances, fraudsters may pose as bank employees who claim the person’s bank account has been compromised and the only way to access their money is by buying a gift card and loading it with money.
Luke Charters MP for York Outer received an M&S gift card that had been drained by scammers before he could use it
Alternatively, they may claim that the victim must buy vouches to pay a tax bill, fine, or as a fee to win a prize. In some cases, they impersonate the victim’s employer and say the cards are needed for a work gift.
These stories may sound implausible out of context, but the criminals use social engineering tactics to gain the trust of their victims and get them into a flustered state so they are more impressionable.
Once the customer has bought the card and sent the voucher code and pin to the fraudster, the money on the card is either spent straight away or the card is sold on to other criminals.
In some cases, the criminals offer to pick up the vouchers from the victim’s home address and pretend they are sending a courier to keep them safe.
While most people know to guard their bank details, they can be less protective over gift cards, making it an easy tactic for scammers to get their hands on money.
Often criminals target vulnerable people and older people with this type of scam, says Luke Charters MP who has seen an uptick in voucher courier fraud in his constituency.
‘Retail staff should be trained to look out for suspicious signs when people are buying large numbers of gift cards – just as bank staff are when customers withdraw large sums of cash,’ says Charters. ‘If an elderly lady is spending £1,000 on vouchers, it’s unlikely to be to spend on bath bombs.’
Boots has had to put up signs in some of its stores warning customers: ‘Gift cards are for gifts, not for payments. No genuine business or government agency will ever insist you pay them with a giftcard.’
Detective Sargeant Ben Hurley of the City of London Police’s Dedicated Card and Payment Crime Unit (DCPCU), says: ‘We do see it quite a lot and gift card fraud is becoming more prevalent.’
‘It’s a common method for fraudsters to launder money.
‘If a scammer gets a £100 gift card loaded with money that isn’t his and sells it on for £50 he profits by £50.’
Dr Hannah Shimko, of the Gift Card & Voucher Association (GCVA) says: ‘Gift cards are safe, flexible and hugely popular, but their convenience can sometimes be exploited by scammers.
‘The gift card sector is working together to close down fraud opportunities, from purchase limits and delayed activation to fraud monitoring and clearer messages at checkout. But public awareness is crucial.’
Boots was contacted for comment. An M&S spokesman says: ‘We take the security of gift cards very seriously and our colleagues remain vigilant. ‘If a customer has any concerns, we encourage them to contact our customer service team. We continue to work closely with the Gift Card and Voucher Association and other retailers and have apologised to Mr Charters for his experience and arranged a refund.’
Retailer Boots has had to put up signs to warn customers in stores about gift card scams
What can you do to protect yourself?
If someone calls asking you to buy a gift card and put a large sum of money on it, this should raise immediate alarm bells that it is a scam.
The police, your bank or any reputable organisation will never ask you to buy a gift card for them.
Take a moment before handing over any personal or financial details. Criminals will try to rush and panic you – taking a moment to think or to run something past a loved one can save you from being scammed.
If you think you have been targeted, call your bank immediately to report it, report it to Action Fraud and contact the retailer as soon as possible.
If you find that a gift card you have been given has no money on it you should do the same.
You might want to consider buying gift cards with a credit card as this may offer you more protection under Section 75 and you could make a chargeback if something goes wrong.
If you purchase a gift card from a retailer, your contract with them is under the Consumer Rights Act 2015, which states that goods sold must be fit for purpose.
If the card has been activated and fraudulently used, that requirement has not been met so the retailer has a duty to replace it or refund you.
If you received a gift card that has been drained by scammers you will need to contact the person who bought it for you and explain what’s happened, so they can contact the retailer.
Scott Dixon, founder of the Complaints resolver says: ‘In both scenarios, you need to push hard and cite “breach of contract” under the Consumer Rights Act 2015 and say that the gift card sold was not fit for purpose.’
You will need to be able to prove the gift card was used fraudulently so keep hold of any receipts and proof of purchase and alert the retailer or card issuer immediately.
Hannah Simko of the Gift Card and Voucher Association says: ‘Where genuine fraud can be demonstrated retailers will usually act to support the customer.’
Detective Sergeant Hurley says: ‘If the purchase on the gift card was done in a store and you were nowhere near the store and you can prove that, it would also help your case.’
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