The Division of Consumer Protection reminds New Yorkers that, effective June 20, 2023, a new New York State law went into effect to protect gift card purchasers from becoming fraud victims.
Starting this month, all businesses that sell gift cards are required to have a gift card fraud warning notice. The New York State Department’s Division of Consumer Protection has created and posted model notices that gift card sellers can post near their gift card shelves to comply with this new law. These signs are available in three different sizes on the Consumer Protection Division website.
Governor Kathy Hochul signed this measure into effect to protect New Yorkers. Soliciting a gift card to make a payment is a deceptive way to fraudulently obtain money that has become very popular among unsuspecting individuals with a scam method that is nearly impossible to trace.
According to the Federal Trade Commission, nearly 65,000 consumers filed a complaint related to gift card scams. These scams produced a total loss of $228 million.
This number just shows how clever scammers asking for gift card payments are. That is why the New York Division of Consumer Protection advises consumers that gift cards should only be used for gifts and not for payment of any other kind.
Many of us have found ourselves many times in the dilemma of what to give to a loved one. We have always opted for a gift card as an option that is always well received and can be the perfect gift.
However, lately this option is also used by scammers who demand these cards as a form of payment when they are trying to scam someone. The new law that went into effect a few days ago reminds consumers to be vigilant so as not to fall victim to a scam.
The Consumer Protection Division is in charge of educating consumers to be smart shoppers and to know their rights and make informed decisions. Don’t get ripped off and follow expert advice while also looking at the ads near where the cards are sold so everyone has a chance to think and make an informed decision before buying the cards for an activity they don’t be a form of gift.
Consumers should remember that when a gift card payment is made it becomes a cash payment that cannot be traced. Generally when the consumer provides the number on the back of a card is to give the full monetary value to someone whether they offer it in a photo or in text, the consumer is giving a scammer rights to use the value of the card.
That is one of the differences between a gift card and credit or debit cards where the bank can offer guarantees to recover losses.
Gift card scams affect many, but there are a large number of seniors who have fallen for these fraudulent exploits because they receive a text, call or email that appears to be from someone they know.
Since this is an ongoing problem, one of the most effective ways to combat it was to change the laws and directly inform the consumer about the options and empower them to make the right choice when it comes to using gift cards.
And lastly, if you’re a consumer and someone asks you to pay with a gift card, that’s a red flag. Please, do not do that. And if you think you might be being scammed, please let us know. Report to the Department of State Consumer Protection Helpline at 1-800-697-1220.
Knowledge is power. Do not be fooled.
Robert J. Rodriguez is the Secretary of State for New York.