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Data for today’s episode is provided by Mercator Advisory Group’s Viewpoint: Gift Card Fraud: Trends and Mitigation
Gift Card Fraud Targeting Individuals:
- The schemes that fraudsters pursue in directly targeting individual consumers take a variety of forms and are worryingly effective.
- One in four of 1,000 U.S. consumers surveyed in April 2021 have been asked to purchase a gift card to pay a fee to claim a prize.
- One in ten have been asked to purchase a gift card to deal with a social security number problem.
- One in ten have been asked to purchase a gift card to pay a utility bill.
- One in ten of those targeted admitted to following through with the request to buy a gift card.
- Individuals should recognize that entities requesting gift cards for payment are likely scammers.
Fraud has always been a challenge for the gift card market, and recent years have seen an increase in gift card fraud in terms of both the number of cases and total financial losses. Despite this trend, recent advances in technology are helping in fraud prevention and detection, and future iterations are likely to prove still more useful. By incorporating artificial intelligence and machine learning tools into their arsenal of fraud services, merchants can make their defenses more robust and adaptive. With the use of advanced technology, it is increasingly possible for gift card fraud to not only be detected but prevented altogether.