Kate Kleinert never imagined she would ever rush to a store to buy gift cards to fix somebody else’s string of problems.
First, there was the young teen who lost her mother a few years ago, found herself in a boarding school in London and needed motherly assistance — and a $100 gift card — as she developed into a woman.
Then, the teen’s father Tony needed to hire a lawyer — and get ahold of several thousand dollars — to get out of a work contract overseas so that he could return to the United States to be with Kate.
Kleinert is a kind, compassionate woman, and generally skeptical. She never imagined she’d feel an emotional spark like she did last summer when Tony sent her a friend request on Facebook during the pandemic.
“Normally, I don’t reply to those but there was something about him that spoke to me,” said Kleinert, 68, a retired executive secretary whose husband died in 2009 at their home in Glenolden, Pa., outside Philadelphia.
Tony always seemed to know how to say the right things.
He gave her access to see his Bank of America online account, for example, to prove that he could be trusted and he’d pay her back soon. She saw that he had more than $2 million sitting there in the bank. He just needed her to help him deal with a payment while he was overseas.
She thought she was managing OK after being a widow for 11 years. She had been married a long time, though, and missed her husband. Tony seemed like the real deal.
Her husband Bernard was a Teamsters Local 500 shop steward, according to his obituary online, worked as a tractor trailer driver and also drove a school bus where he knew the names and stories of each child on his bus.
The couple enjoyed fostering rescue collies. They had been married 26 years. They never had children.
She soon thought that the man who called himself “Tony Richard” — pronounced as ri-Shard — was a second chance for happiness. He was in Iraq, working for the United Nations as a surgeon. They soon began talking on the Hangouts App.
Tony was handsome, spoke with a French accent, often was able to talk with her four or five times a day, and told her loving things, like: “I woke up this morning and I missed you.”
All the time, of course, there was another reason to send a gift card.
Scammers want your money on a gift card
Federal Trade Commission data indicates that consumers have reported spending nearly $245 million on gift cards that they used as payment to scammers from January 2018 through September 2020.
It happens for many reasons: IRS and Social Security impersonation scams. Scams where someone pretends to be a grandchild or other family member or friend in need. Tech support scams. Romance scams. An email from someone pretending to be your boss or minister who needs you to buy gift cards.
Individuals can lose several hundred — or even several thousand — dollars. The median loss by individuals was $820 from January 2018 through September 2020, according to an FTC analysis.
Kathy Stokes, AARP’s director of fraud prevention programs, said the scammers have a winning formula for getting someone into a heightened emotional state. Professional con artists often refer to getting the victim under the ether.
When you’re in this fog, you might not question why a Best Buy gift card can be used to pay a tax obligation to keep you out of jail or help you land a loan to cover bills.
“Once they have somebody under the ether, they can pretty much convince them of anything,” Stokes said.
“These are sophisticated criminal enterprises. It’s not one against one. It’s one against thousands.”
The crooks learn a bit about you in advance, often doing some research online, seem legitimate and can be extremely persuasive.
After all the scam warnings, one might be amazed that anyone would go out and put hundreds or thousands of dollars on gift cards for strangers.
But the demand for gift cards continues to build, enough so that the AARP has launched a special campaign designed to crack down on Gift Card Payment Scams, including information at its website, www.aarp.org/giftcards.
Consumers also can call the AARP Fraud Watch Network at 877-908-3360.
Stokes wants to work with retailers to test intervention strategies at the store to stop consumers from losing their money buying gift cards for crooks.
It’s not enough to post signs that warn of potential gift card scams. Perhaps, she says, a video could be created to help store clerks understand the signs of a consumer under stress who is under the scammer’s ether.
Consumers who are buying gift cards for a scammer might be overly anxious, appear worried or look scared, Stokes said.
Sometimes, scammers will convince consumers that the gift cards, like Google Play, Steam, or eBay, can be used as electronic vouchers to pay bills or taxes. Or maybe the phony story involves using the gift cards to cover costs before collecting a sweepstakes prize.
“If victims ask questions about why gift cards are being used for payment, scammers invent a plausible excuse, such as that the government has recently entered a contract with a gift card company to handle transactions,” according to a Better Business Bureau alert.
One quarter of U.S. adults are unaware that gift cards are used as a form of payment in scams, according to an AARP survey.
Stokes said scammers want payment via gift cards because the money ends up being virtually untraceable.
“They’re digitally able to drain that card’s value right then and there,” Stokes said.
Con artists can use the gift card numbers and codes to buy expensive merchandise to later resell or they could trade the card value for cash or cryptocurrency, according to an online alert from Kroger.
“In the case of Google Play and other online platforms, it is easy for the scammers to sell the gift card code in an online marketplace and disguise their stolen product among standard discounted gift cards,” according to the Kroger alert.
The BBB notes: “Providing the numbers from the back of a gift card is just like sending cash. Whether victims give the numbers over the phone or text a photo of the back of the card, they are essentially handing money to scammers, who may quickly drop the funds into foreign bank accounts. It’s nearly impossible to get the money back because gift cards do not have the same protections as credit or debit cards.”
Gift cards are the among the most common ways that scammers get their money from consumers. Gift cards have topped the list of reported fraud payment methods every year since 2018, according to an analysis by the Federal Trade Commission.
The Better Business Bureau has proposed more education and consumer protection relating to gift card sales. One recommendation includes imposing a waiting period between when cards are purchased and when they can be used, at least for online purchases.
“Once the immediate pressure from the scammer is relieved, victims often recognize it is a scam and thus, with a bit more time, could try to stop the transaction,” the BBB stated.
About one in four people who told the FTC that they lost money to fraud said they paid with a gift card. That’s based reports from January 2018 through September 2020.
How a Troy, Mich. woman lost nearly $10,000
Many times, the scammers are pretending to be someone in authority. Nearly half of people who reported handing over money to someone posing as a government agency or official said they paid with a gift card, according to the FTC.
In March, a Troy woman got caught up in buying gift cards over a five hour period after receiving a call from a scammer who identified himself as Drug Enforcement Agency Officer “Watson.”
The con artist claimed that the woman’s Social Security number was compromised and used in Texas. And somehow she was a suspect in a drug transfer from Mexico and she was being charged with a felony.
She needed to take money out of the bank and buy gift cards to fix her legal problems. As scammers played into her fears, she withdrew thousands of dollars from her bank account and used that money to buy numerous gift cards and Green Dot prepaid cards from several businesses.
The caller stayed on the line with her the entire time she was buying the gift cards.
Troy Sgt. Jason Clark said the victim was instructed to travel to various stores to buy the gift cards, including 7-Eleven, Kroger, CVS and Meijer.
“Criminals have learned that if the gift card purchase from one location is too high, the cashier might question the sale,” Clark said.
She lost $9,047.60 to the scam on March 17, according to the Troy Police Department.
Clark said most of these calls originate outside of the United States, and two of the numbers in this case were from Canada.
“This makes it very difficult for local law enforcement agencies to complete any international follow up,” he said.
“Unfortunately we were unable to get any money back or charge anyone criminally,” he said, noting that Troy police contacted the woman four times after her initial report.
“The criminals attempted to contact our victim for about a week after the initial crime, but then the calls completely stopped after we were able to assist her with identity theft controls,” Clark said.
“The scammers are very good and very convincing.”
Increasingly, consumer watchdogs warn, scammers are demanding that victims stay on the phone as long as possible while consumers head to the bank or the grocery store to buy those gift cards.
Scammers are telling their victims that that if they hang up, they’re likely to be arrested immediately or have their accounts seized.
Even skeptical consumers can become victims because scammers seem to have an answer for everything. Gift card payment requests must be treated as a huge red flag for a scam.
Stokes said if anyone contacts you and demands money on a gift card, you should immediately hang up or stop communicating with that person.
How one woman lost $39,000
“God help me and anybody else I meet later who asks me for a quarter,” says Kleinert.
Kleinert — who plans to share her story in public speeches to senior groups and others — ended up losing $39,000 after about six months of conversations with Tony.
Tony mostly asked her to put money on American Express gift cards, which she bought at several stores. She remembers seeing a warning at a cash register about gift cards being used in scams but she thought that Tony was a friend, not a stranger.
She then often took photos of the numbers on the back of the gift cards and sent a picture to Tony.
Once he asked her to send him $15,000 via Bitcoin for legal maneuvers needed to bring him back to the United States. She took the money out of her 401(k) and Tony walked her through how to send the money via Bitcoin.
“He was going to pay me back the minute he got to Philadelphia,” she said.
The plan was for him to arrive in time for Christmas. She had a bottle of champagne ready. They had even talked about buying a house together.
She never got the call to pick him up at the airport. She only got a call supposedly from his lawyer who said that Tony needed another $20,000 for bail money after the FBI picked him up on his way back into the United States. It was all some sort of mistake, according to the man who claimed to be an attorney.
She didn’t send a dime.
“He had cleaned me out by then. I didn’t have two cents,” Kleinert said.
She had also used her credit cards to the max, ringing up $22,000 in credit card debt, to cover her own bills as her savings dwindled.
Sure, she talked to Tony while he was supposedly in jail in the United States. He tried to talk her into borrowing money from family members or friends. He called five or six times a day. She didn’t understand how he could call that often while incarcerated.
She offered to come visit him in jail in Pennsylvania. But soon she was told he was transferred to Oklahoma. Oklahoma?
“That made no sense either,” she said. “The stories started to unravel.”
“If anyone asked me if I would fall for this, I would say absolutely not,” she said.
But Tony was quite good at his day job. So good that now Tony appears to have sent a friend request to one of Kleinert’s friends after Kleinert ended the relationship and stopped buying gift cards.
“Who knows who the pictures are really of,” she told me in a phone interview.
The man in the photo looks more like a dream date than anything else. So I asked SocialCatfish.com to take a look at the photos that Kleinert sent me.
The photos that Tony Richard shared with Kleinert appear to be stolen from an Instagram account of a plastic surgeon in Columbia, according to SocialCatfish.com, which helps verify information like images, email addresses, phone numbers and online profiles.
If Tony isn’t the plastic surgeon SocialCatfish.com found, he sure could be his body double.
Things never stop at a nice picture, of course. The gift cards can only start flowing after serious work at building trust and a relationship.
“He just immersed himself in my life until I was comfortable enough to send him this money,” Kleinert said.
He knew just how much she longed for family and a chance to build a new life. He’d ask about her dog. His children started writing her and wanted to call her Mom.
“I never realized how much I missed being loved.”
Susan Tompor is the personal finance columnist for the Detroit Free Press. She can be reached at email@example.com.
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