Gift card fraud – How to secure your gift card system against fraudsters?
Gift card fraud – How to secure your gift card system against fraudsters?
While gift cards seem to be a popular choice for many online shoppers, they are also becoming very popular for fraudsters and can be used as a great tool to dupe someone. For businesses and customers, gift cards are good news, but the bad guys are using them for several nefarious deeds. Read on as we discuss how gift card scams work, how you can manage this risk while shopping online and how cyber insurance can come to your rescue.
What is gift card fraud?
A gift card, as you would know, is a card or a token that you use yourself or give as a gift to someone who can then use it for a specific amount of cash value. A gift card is therefore like digital cash, which a cardholder can either sell or use to shop.
The duplication, theft or unauthorised use of gift cards is called a gift card scam or fraud. Hacking into an account, manipulating the balance in someone’s card and generating counterfeit cards are all different types of gift card fraud.
How does gift card fraud work?
Having a clear insight into how gift card fraud works would help you in keeping it at bay. Let’s understand:
1. The theft of the data through various techniques such as hacking, phishing or other data breaches is done with the aim of stealing gift cards.
2. Software tools are used to generate valid gift cards.
3. Often, scammers pose as employees and trick customers into sharing their gift card details.
4. Physical tampering with gift cards can also be done by scratching off the protective layer and stealing the PIN.
5. The criminals can then make one or as many unauthorised transactions as possible.
6. Stolen gift cards can also be sold online/ offline at a discounted price.
7. Some reports of laundering gift card money have also come to light.
Gift card fraud prevention
As gift card scams affect retail businesses as well as consumers, both these groups need to take some steps to facilitate the prevention of such fraud.
1. Gift card fraud prevention by companies:
• Businesses need to invest in adequate tech support that can monitor as wella s detect any unusual activities
• Customers should be kept updated about such scams. They should be educated on how to avoid such scams
• Additional verification should be required for any such transactions
• Businesses need to act very quickly on any suspicious/red-flag activities
• They should place limits on large gift cards as well as repeated purchases
• They should train their employees to spot fraud.
2. Gift card fraud prevention by Consumers
“Jago Grahak Jago”. If someone is calling you up and asking you to buy a gift card, that’s most definitely a scam and you need to watch out. You also need to be on guard if the caller tells you that you have to make the payment right away. The caller may also ask you for the gift card number and/ or the PIN. You also need to take the following precautions:
• Make sure that you download apps only from verified and official platforms
• Be aware of the domain name, websites may look similar and use a very similar name
• Avoid the urge to use free Wi-Fi, especially when making a financial transaction
• Do not share any personal or financial information with anyone unless you are 100% sure
• Never click on suspicious web links.
Gift card fraud examples
Card fraud has taken many forms, making it all the more difficult to catch scammers. Knowing the techniques that are used can help you protect your finances:
1. Refund
If you return an item and then ask for a refund in the form of a gift card, beware. It can be used as a scheme to extract funds. Fraudsters can use the card numbers to make online purchases.
2. Buying a gift card with a stolen card
This is a very widespread gift card fraud. Stolen credit cards are used to buy gift cards and then use or sell them.
3. Tampering with gift card
Opening gift cards in the open can allow tampering in a number of ways.
4. Number Theft
Sometimes hackers can hack into a company’s database and print gift cards for themselves.
5. Account takeover
By getting access to your account, a scammer can make purchases with any credit or gift card in your account.
Why cyber insurance is important?
Imagine life without the perks and privileges of online shopping can be distressing. But the extensive use of the internet and online platforms has made us vulnerable in a number of ways. When you shop online, it is very much possible that you get attracted to a website/ mobile app that offers lucrative deals. It may also happen that you accidentally visit a fraudulent website that looks very similar to the real one. So, for every second that you spend online, protecting yourself is required at every step of the way. Therefore, cyber insurance for shopaholics becomes all the more essential.
Whether you are an individual or a business you can opt for cyber insurance to save yourself from almost all kinds of data breaches. Customisable plans are available on HDFC ERGO that allows you to safeguard yourself from the dangers of the digital world.
Conclusion
For businesses customers and the police alike, online frauds and scams are becoming a significant concern. This convenient way of gifting has become a lucrative option for fraudsters to exploit vulnerabilities.
While there have been many gift card frauds in the past few months, somehow, most shoppers feel that it cannot happen to them. But this can prove to be a costly mistake. When you shop online and get a gift card, make sure you are well-informed and are in a strong position to avoid falling into any such scam. Also, keep in mind that if you have been a victim of any such fraud, filing a timely complaint can make a huge difference in setting things right, if not for yourself, at least for others.
Disclaimer : The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales
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