Watch CBS News

Beware of a new scam involving "relatives" and gift cards

Imposter scams
Telephone fraudsters asking for money a growing concern 02:31

In a new twist on an old phone scam, criminals are preying on family ties by asking people to buy gift cards to help relatives they falsely claim are in trouble.

Criminals call victims and pose as relatives who urgently need money, according to an alert from New York state Attorney General Eric Schneiderman. Instead of asking consumers to transfer money through MoneyGram or Western Union, the scammers instruct them to buy gift cards and call back with the numbers on the back of the cards. In one case, an 82-year-old woman, believing she was helping a granddaughter who claimed to have been arrested in a drug bust, gave the scammers $36,000. 

Imposter fraud is now the leading type of scam to harm consumers, with the Federal Trade Commission finding that victims lose an average of $1,124. One of the more common such schemes involve criminals posing as an IRS agent, who claims the victim is in trouble with the agency and must provide payment or face criminal charges. 

The elderly are especially vulnerable to scams where criminals claim to be troubled relatives, with those over 60 years old accounting for 37 percent of this type of fraud. 

“Each year, countless vulnerable New Yorkers lose thousands of dollars through a variety of gift card scams, many of which target senior citizens,” Schneiderman said in a statement emailed to CBS MoneyWatch. “While it is important for consumers to be on alert and recognize a potential scam, retail stores, credit card companies and banks also can play a role to thwart scam artists.”

Fake kidnapping scams a nationwide problem, law enforcement says 03:03

Victims of the scam have been asked to buy gift cards at a number of big retailers, including Walmart (WMT), Target (TGT) and Best Buy (BBY), the attorney general said. In the case of the 82-year-old victim, the scammers claimed to be the woman’s granddaughter, and said she had been arrested in possession of $100,000 worth of cocaine and didn’t have the money to post bail. 

Another scammer who claimed to be a police sergeant got on the phone and instructed the grandmother to buy thousands of dollars of gift cards. The fraudsters later called back with more requests for money. While her credit card company called the senior citizen with a fraud alert, she said she had authorized the charges. 

Consumers should never purchase gift cards and give the numbers over the phone or Internet to someone who claims to be a relative, the AG’s office said. “Gift cards are not a legitimate form of payment,” it added. 

Likewise, the office warned people never to wire money to a stranger. Consumers who are contacted by a relative claiming to be in danger should check in with that relative through a text or quick phone call. 

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.