Don't get scammed this holiday season. The Better Business Bureau, US Secret Service and US Attorney's Office are of a gift card scheme in New York.

Several people were recently arrested for allegedly purchasing a large amount of prepaid or reloadable gift cards using stolen credit card numbers.

By heeding this warning and following the safety tips provided by BBB and Secret Service, New Yorkers will be better equipped for a safe and joyous holiday season

The gift cards include Visa, Visa Vanilla, MasterCard, American Express, Green Dot MoneyPak, MoneyCard and other reloadable or prepaid debit/credit cards. The cards were used at other stores or resold locally and online. To entice buyers, the gift cards are often priced lower than the stated value.

"In this season of giving, too many criminals are looking to take your credit card and other personal information,” said U.S. Attorney William Hochul. “Both shoppers and retailers need to be cautious. By heeding this warning and following the safety tips provided by BBB and Secret Service, New Yorkers will be better equipped for a safe and joyous holiday season.”

How the gift card scheme works:

Individuals buy a dozen or more reloadable or prepaid debit/credit gift cards, using stolen credit card numbers. In one NY case, the fraud loss totaled over $100,000. The Secret Service says those who purchased the cards may have ID to prove ownership of the stolen credit card, which can make it difficult for a retailer to deny the purchase.

“We know gift cards are in high demand during the holidays,” said Warren Clark, president of Better Business Bureau of Upstate New York. “It is critical for us to alert retailers to this potential criminal activity."

Shopper Recommendations:

  • Be cautious about buying gift cards from third parties or online auctions, because it is virtually impossible to tell whether the cards have any value remaining, if it was tampered with or to see if the card is expired.
  • If you are purchasing a gift card in store, make sure to check the packaging and any security seals.
  • Check the fine print to see if there are fees associated with the card. Some typical fees could include transaction or inactivity fees. In some cases, an organization may charge a service fee to issue the card.
  • See if the card has an expiration date. In some cases, the plastic card may expire before the five-year redemption period.
  • Check the terms and conditions on the gift card. If you are giving a card to a friend who wants to shop online, make sure the card can be used both online and in stores.

Contact information:

  • Suspected criminal activity related to payment cards or computer intrusions should be reported to local Secret Service field offices. Contact information for local field offices is available at secretservice.gov
  • Any questions regarding this advisory can be directed to the Secret Service Criminal Investigative Division, Cyber Investigations at 202-406-9330.

Report a scam.

If you spot a business or offer that sounds like an illegal scheme or fraud, tell us about it through BBB’s Scam Tracker. We will investigate and warn others by reporting your experiences.


MORE: Polly Almost Got Scammed Out of Two Grand

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