Former Insider Calls On Lawmakers To Help Stop Gift Card Fraud – CBS Dallas / Fort Worth

Former Insider Calls On Lawmakers To Help Stop Gift Card Fraud – CBS Dallas / Fort Worth

November 18, 2021 Off By administrator

NORTH TEXAS (CBSDFW.COM) — Gift cards are the most popular gift of all time, but the I-Team has been warning you about a major fraud problem with them since 2018. And now, another North Texan and an industry insider have reached out to us complaining about the growing problem.

“It just coming back declined,” said Robert Adale Davis, a traveling musician who frequently performs in Dallas.

In June, he walked into a Kroger store on Forest Lane, bought a $130 Visa Debit gift card, and went to the parking lot to activate it. “I knew I had just given them $130,” Davis said but the card had a zero balance.

Davis says the store told him to call the Kroger fraud department, Visa, and the police, but he got nowhere, and he got no money back.

And then he called the I-Team.

“They got paid even though it’s a scam,” he said

In 2018, CBS 11 I-Team investigator Ginger Allen became an unwitting victim herself. She bought a restaurant gift card for her father who lives in California. When he tried to use it, it had a zero balance. She found out that the thieves at a Dallas location had the number and asked the restaurant to key it in. They then proceeded to enjoy appetizers and drinks using that card!

“I paid $100,” said Truman Bradshaw. The North Texan told us in a December 2019 I-Team Investigation that he bought an Amazon gift card at a local CVS. He says, “It was rejected immediately.” His card had been drained before he could ever redeem it.

The I-Team has repeatedly reported on this. A security expert even showed us how easily crooks remove the cards from kiosks, record the numbers, and then return them to the racks. They eventually drain the cards leaving them with a zero balance.

The crooks do it all with a card reader/writer, a laptop, and some simple math.

“All the ones on the store shelve are compromised,” said William Caput. “They should just be destroyed.”

The I-Team will not get into exactly how it’s done, but let’s just say you do not have to be a cyber expert. We watched our expert transfer the money to a separate card in about two minutes.

“We’re spending $150 billion a year on gift cards,” says former industry insider Shannon Greer. Greer contacted the I-Team after seeing our investigations. “Yet 20-30% of those are defrauded. That’s quite a chunk of $150 billion.”

For seven years, Greer worked for a major gift card manufacturer helping big box and small mom and pop retailers design their cards.

“The merchants will put so much money into making a card but no money in the security of the card.” Greer says she was the person who asked the retailers if they would like to add the extra security features onto their cards.

“We would go back and say, ‘Are you going to put a security sticker on here? Are you going put a scratch off on here?’ ”

She said they were typically quick to respond. ” ‘Oh no, we don’t need that, that’s not in our budget.’ ”

Stickers and scratch offs are…

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