It's Impossible To Recover Your Money From This Untraceable Type Of Fraud

The Federal Trade Commission reports that in 2023 alone, Americans lost a record-breaking $10 billion after falling victim to scams. As many good people as there are in the world, there are just as many swindlers whom we must stay vigilant against. From untrustworthy door-to-door salespeople to those who take advantage of vulnerable individuals on social media and dating websites (here are telltale signs a romance scammer is making a move on your money), fraudsters have many crafty ways to convince their victims to pay up.

While some victims are able to recoup either all or at least a portion of the funds they unwittingly handed over to a scammer, there's one type of fraud from which it's practically impossible to recover your money: gift card scams. Of that $10 billion lost in 2023, the FTC revealed that $217 million of it was lost due to scams involving gift cards or reload cards. Unlike bank transactions, which leave a digital trail, funds on gift cards are untraceable, making them an ideal form of payment for crooks around the world.

The FTC stressed that most gift card scams start with a sense of urgency that, in the heat of the moment, seems extremely real. Someone may call you, text, or send you a message on social media claiming they're from the IRS, a loved one experiencing an emergency, or perhaps a utility company, all demanding payment or assistance as soon as possible. Otherwise, your taxes will be unpaid, your family member won't be able to afford their medical costs, and your power will be turned off ... or so they say. Usually, these scammers request payment in the form of gift cards, whether it be Amazon, Apple Pay, or Target, asking you to purchase one (or several) and send over the card number and PIN.

If you receive a call or a message like this, the FTC urges you to take a step back and evaluate the situation. Remember that no government entity informs someone of money due in this manner, nor will it ever require payment in the form of a gift card. Rather, a formal letter is mailed out. As for the family emergency claim, contact your loved one directly and check on them. You'll find that they are perfectly okay. The same goes for the false utility representative; give your utility company a call, and you'll likely find that you have no missed or late payments.

Gift card scammers thrive on inciting panic in their potential victims. The key is to stay calm and recognize the scam for what it is.

The reason why scammers try to swindle money out of victims via gift cards is because these little pieces of plastic are essentially impossible to trace. Unlike a debit or credit card, there is no name or identity attached to them. They leave no digital trail, so when the funds on a gift card are drained, there's virtually no way to track where – or to whom — they went. In fact, some scammers today have found ways to drain gift cards while they're still on a store's display rack.

Speaking with Fox Business, David McClellan, cofounder of scam-prevention company Social Catfish, said that "gift cards are one of the most popular currencies for online scammers in general because they are harder for the authorities to trace than a bank transaction." While this type of fraud (is it one of the financial scams senior citizens need to be aware of?) may be untraceable, the FTC still recommends that victims contact the gift card company in an attempt to receive some justice. With these scams at an all-time high, companies may be more willing to hear a victim out and, possibly, help them recoup their lost money, though nothing is guaranteed.