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Gift card scams ramp up during tax season

1 in 15 consumers are victims to identity theft

Posted 1/18/21

Angela Russell recalls the unwelcomed feelings when a phone scammer reached out, claiming she had not paid her APS invoice and her air-conditioning would be shut off prior to her afternoon yoga …

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Subscriber Exclusive

Gift card scams ramp up during tax season

1 in 15 consumers are victims to identity theft

Posted

Angela Russell recalls the unwelcomed feelings when a phone scammer reached out, claiming she had not paid her APS bill and her air-conditioning would be shut off prior to her afternoon yoga classes.

The criminal was insistent and rude, saying they sent her letters that her business’ power would be shut off if she did not pay at least $1,000 to keep on the electricity. The scam was so elaborate they transferred her a couple of times to “supervisors.”

Ms. Russell panicked.

“It was like the perfect storm,” she said. “I couldn’t get logged into my APS account to double check. My heart was racing. I have classes this afternoon. I can’t have my power shut off.”

Ms. Russell paid her electric bill, but she started second-guessing herself. Fortunately, a red flag went up when they asked for her to immediately pay by purchasing gift cards.

“It wasn’t an exorbitant amount as a business owner, but in the moment, I was freaked out.”

Before agreeing, she ended the call and reached out to her husband who believed it was a scam.

The Peoria resident was fortunate. Others not so much. In 2019, one in 15 consumers were victim to identity theft.

According to Ryan Anderson, communications division chief of Arizona Attorney General Mark Brnovich, the longtime scam continues to convince business owners and consumers to fall prey to fraudulent phone calls from electric companies to the IRS. Consumers lose millions of dollars in gift card scams every year.  People can learn more at www.azag.gov/consumer/gift-card-scams.

With tax season upon Arizonans, Mr. Anderson said to beware that government agencies will never ask for payment by gift card.

“The government doesn’t call. No high-pressure sales or threats. Hang up the phone,” he added. “We advise the public you should not give out your Social Security at all.”

The attorney general’s office is committed to educating consumers of the dangers of identity theft from internet scams to more personal calls.

“It’s still a real threat,” Mr. Anderson explained. “Criminals will go to great lengths to accomplish their goals of committing financial fraud.”

He said they will even dumpster dive and reconstruct bills and statements. Tearing statements in half or pieces is not enough for the sophisticated criminal. He reminds business owners to not only shred their personal information, but financial information of customers.

The attorney general’s office destroyed 50,000 pounds of sensitive documents in 2019.

In early December 2020, the office hosted a contactless shred-a-thon event in Scottsdale at St. Patrick’s Catholic Church, shredding more than 20,000 pounds of documents, such as old tax returns and bank statements, and collecting prescription drugs for safe disposal.

Even electronic stored customer information has been at risk the past few years associated with security breaches. The criminals often wait a year to begin using consumers’ credit cards.

“We think the reason criminals do that is they want people to let their guard down,” Mr. Anderson said. “This administration has put a strong focus on consumers since 2015. About $150 million given back to AZ consumers’ pockets.”

Mark Field, of Barrett Financial Group, said he once helped a mortgage client who had her purse stolen at a supermarket.

“I was able to obtain the police report and submit it to the credit companies to delete the bad checks from their credit report,” Mr. Field noted. “The client said they had been working on the problem for three years. It was so rewarding to put a stop to the impact of identity theft, and they were able to purchase a property.

Mr. Field also warned to be careful when dealing with online mortgage companies. “Companies like LendingTree and PayMyBills.com are not mortgage companies,” Mr. Field stated in an email. “They are marketing companies and they will sell your personal financial information to any mortgage company willing to pay for it.” 

He added it is better to deal with a local company that is licensed and regulated by state regulators.

“Many of these companies use a bait-and-switch tactic to mislead, misinform and confuse mortgage clients,” Mr. Field said.

Those who have experienced identity theft or fraudulent activity should report to the local police department, alert major credit bureaus, banks and credit unions, credit card providers and any business or institution that may be directly affected by the theft.

“It is important that you obtain a police report or a report number. This report will then help you when working with companies to repair any potential damages to your credit,” Mr. Anderson explained.

People can also contact a nationwide credit reporting agency to place a fraud alert on their credit. It is also recommended to alert the Federal Trade Commission and file an Identity Theft Affidavit either online at www.identitytheft.gov or call 1-877-ID-THEFT. In order to do this a police report number is required.

“We’re here to help consumers,” Mr. Anderson added.

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