Bamboozled December 5, 2016: A new (and heck, smart) weapon against gift card fraud

A quick pit-stop in CVS yielded the unexpected.

On the public address system came a warning.

“The IRS and other government agencies will never require you to use a specific payment method for your bills, such as prepaid debit cards, iTunes cards or other gift cards,” it said.

“If anyone calls you and demands that you buy gift cards to pay a bill, hang up and report the incident to the Treasury Inspector General for Tax Administration at”

A fraud warning? In a store? In a store where people can buy gift cards — gift cards that are often used for scams?

It was like Christmas came early for Bamboozled.

We reached out to CVS to say, “Hey, this is awesome!” and to ask for additional information.

We learned the message was part of a partnership between Apple and the Treasury Inspector General for Tax Administration (TIGTA) in an effort to warn consumers about gift card fraud.

Bamboozled cautioned about this scam when it was brand new earlier this year.  Callers impersonating the IRS or other agencies would threaten arrest if you didn’t immediately pay your overdue taxes.

This scam wasn’t new, but the requested payment method — an iTunes gift card — was very new.

Today, iTunes gift cards have become the preferred gift card of fraudsters.  That’s because Apple products are popular around the world, so scammers can sell the cards at a discount or otherwise convert them into currency. They can do it quickly and easily, and it’s incredibly hard to track down the perpetrators.

By some accounts, 70 to 80 percent of these frauds use iTunes gift cards.

The feds have been mounting a fight. In a huge case we learned about in October, the 20 people in the U.S. and 32 in India, along with five call centers, were indicted in a multinational fraud scheme the feds said cost victims hundreds of millions of dollars.

The call center operators would impersonate the IRS, a debt collector or other group, and threaten potential victims with arrest, imprisonment, fines or deportation if they did not pay taxes or penalties to the government, according to a Department of Justice press release.

“If the victims agreed to pay, the call centers would then immediately turn to a network of U.S.-based co-conspirators to liquidate and launder the extorted funds as quickly as possible by purchasing prepaid debit cards or through wire transfers,” the presser said.

This holiday shopping season, protect yourself from Amazon phony third-party sellers.

Traditional law enforcement action is only part of the battle. The feds are also trying to reach out directly to consumers (check its YouTube channel here),  and that’s where the public service announcement in CVS comes in.

“We view every potential victim who received our warning and did not fall victim to the scam as a victory,” said Timothy Camus, Deputy Inspector General for Investigations at TIGTA.

Apple didn’t respond to our request for comment

The messages have also been played in Rite Aid, ShopRite, Wegman’s, Stop & Shop, Albertsons/Safeway and Supervalu stores.

And the program, which targets shoppers New Jersey, New York, California, Texas and Florida — the five states with the largest numbers of victims  — seems to be working.

“The data reveals that the in-store campaign has already had a significant impact in reducing the number of reported cases in the high incident states targeted,” said Robert Gaudian, president of The Public Service Network (PSN), the company that pioneered the placement of PSAs in grocery and drug stores more than 12 years ago with health spots from the U.S. Department of Health and Human Services.

A Princeton-based company, InStore Audio Network, produced the audio message. InStore president Gary Seem said these kinds of delivery methods are the only way to reach every shopper in a store.


We wanted to know what efforts are being taken by popular New Jersey gift card retailers.

Here’s what we learned:


CVS said it has several new anti-fraud efforts in play.

These include warning customer about these kinds of scams, employee training and educational signs on pre-paid card displays.

The retailer said it also had a new protection that will be in all 7,900 CVS stores before the holiday season.

“Customers who purchase gift cards in our store will have to read and acknowledge a prompt detailing various types of gift card scams in order to proceed with the purchase,” a spokeswoman said.

That protection is already in the store near us, where we recently purchased a $25 gift card. While paying by credit card, there was a pop-up box on the payment screen that warned of gift card fraud. Shoppers would need to click that they got the message before they could proceed with the payment.

That was awesome to see.

Rite Aid: 

Rite Aid has a $500 limit per gift card, and the total for any one transaction by a customer is $3,000, according to a spokeswoman.

“Our associates are trained to look for suspicious activity and to talk to customers to make sure they know who and where they are sending money to, to avoid fraud and scams,” the spokeswoman said.


Target says it takes a “multi-layered, comprehensive approach to preventing theft and fraud that includes innovative programs and partnerships with local law enforcement, technology and team member training.”

A spokeswoman said the company is aware of gift card scams, and it works actively with law enforcement.

But no details were offered on whether employees are trained to warn customers who purchase a high value of gift cards or whether it posts warnings in stores.


ShopRite says it has a limit on the total amount of gift cards a customer can purchase in a single day.

When we asked how much, the company didn’t want to share.

“We’d prefer not to publish those amounts so we don’t tip our hand to scammers,” a spokeswoman said.

The company does get their employees involved.

“We train our associates to enforce gift card purchase limits and we alert our stores to the existence of these scams,” a spokeswoman said. “However, we recognize that scammers are constantly changing their tactics and that remains a challenge.”


Walgreens didn’t reply to multiple requests for comment, and we couldn’t find anything about its policies on its website.


Wegman’s didn’t respond to our request, but we saw on its web site that customers can only purchase gift cards with a $500 value per card, and not more than $2,000 in one shot. We couldn’t find any kind of warning.


Walmart replied to our request to say it would not be participating in the story.

So, dear readers, of course we as shoppers need to take personal responsibility, and even if you don’t think you’d ever fall for a gift card scam, there are many among us who remain vulnerable.

Please tell your loved ones — whether it’s a threat of deportation or arrest or from the IRS or any of the other common scams — and help them learn how to protect themselves so we can make gift card scams a thing of the past.

Have you been Bamboozled? Reach Karin Price Mueller at Follow her on Twitter @KPMueller. Find Bamboozled on Facebook. Mueller is also the founder of Stay informed and sign up for’s weekly e-newsletter.