Untraceable Transactions

Scammers are always looking for creative ways trick consumers into turning over their hard earned dollars. Scammers are constantly searching for hard-to-trace methods of transferring money, and for years scammers have encouraged consumers to send money via legitimate businesses like Western Union, MoneyGram, and Green Dot MoneyPak. Recently, however, they have turned to iTunes gift cards as the latest method to collect cash from victims in difficult to trace transactions, Better Business Bureau (BBB) warns.

BBB advises consumers to be extremely cautious of strangers asking them to put cash on iTunes entertainment cards to pay off back taxes, settle debts, obtain loans or grants or pay for merchandise. In almost every case, the strangers making the requests turn out to be thieves, and the consumers lose their money.

In one recent case, a 52-year-old woman from southern Missouri said she applied for a $3,000 online loan to help pay for car repairs and moving expenses. She said a man identifying himself as a loan officer contacted her by phone the next day, offering her a low-interest loan in exchange for a fully refundable “good faith” advance payment.

She said the man instructed her to go to a local pharmacy and purchase an iTunes card for $200 and then give him the personal identification number (PIN) from the card.

The man gave her the phone number of a phony BBB office in New York to confirm that the lending company had a stellar BBB rating.

The woman acknowledged that she never confirmed the BBB phone number before buying the card and relaying the PIN to the thief.

She said the phony lender soon called her again, saying she would need to put more money on another card to improve her credit rating before she could get the loan. At that point, she recognized that she likely was the victim of a scam.

The North Carolina Department of Justice issued a news release last year, detailing a grandparent scam using iTunes cards. In that case, authorities said the grandparent purchased 52 iTunes cards with a value of $26,000, and used them to pay off a thief claiming to be a grandson needing money for bail on DWI charges.

Last month, the U.S. Treasury Inspector General for Tax Administration issued a warning, noting that callers posing as Internal Revenue Service (IRS) agents or Treasury Department employees were demanding back tax payments on iTunes cards.

Last week, the Federal Trade Commission warned about the unethical use of the cards, saying they had been used in IRS impersonation and romance scams. That warning also said that other gift cards, like Amazon cards, were being used in the scams.

Thieves often re-sell gift cards online to unwitting buyers or use the cards themselves.

BBB offers the following tips to persons who suspect they may be victims of a scam:

• If you receive a solicitation, a prize announcement, or a business or loan offer, confirm who is contacting you. If you cannot determine independently who you are dealing with, contact local law enforcement officials, your attorney general’s office or BBB. If you can’t confirm who they are, cut off contact immediately.
• Never pay anyone you don’t know by using a wire transfer like MoneyGram or Western Union, a reloadable cash card or any type of gift card. All these payment methods can be extremely difficult to trace.
• Avoid paying anything in advance for a loan or a grant. Do not pay anything to someone who is claiming to collect a debt unless you receive proof of the debt in writing.
• When purchasing merchandise, deal only with businesses you know or those you can validate. Be especially suspicious of unfamiliar companies offering online deals.
• When making purchases, pay by credit card whenever possible in case you need to challenge the charge.
• Report scams to law enforcement or BBB Scam Tracker.
• Research the company on the Internet and by contacting BBB. Find a BBB Business Review by calling 573-803-3190, or by checking our website at www.bbb.org.