Gift card scams have been around for a while in various incarnations. Sometimes crooks use stolen credit cards to buy the gift cards, then turn around and sell them for cash, often on online auction sites. Another variation is where scammers will record the unique serial numbers (and sometimes even the default PINs) of the unsold gift-cards in a store. Every few days after that, they will call the dedicated phone number from the gift cards to see if there is a positive balance, indicating that someone had purchased the cards and “charged” them with value. Once this happens, the crooks simply shop online and pay for their purchases with the gift card numbers. Some poor souls then receive the valueless cards as birthday or Christmas gifts.

One newer scam involving gift cards is a bit higher-tech and constitutes a form of Identity Theft. Fraud perpetrators are stealing the blank gift cards from stores. Since they haven’t been paid for, they have no real value, so stores are not particularly vigilant about them. The scammers then buy stolen credit card information from other crooks, which is readily available on-line on hacker sites. Quite often, the credit card owners have no idea that their credit card information has been compromised, because they never lost physical possession of the cards. This can happen when merchants fail to adequately protect customer data, for example.

No matter how the credit card information becomes available, the scammers use it to re-program the gift cards, using smart-card writers available online. The cards will continue to appear as gift cards from the merchant’s for which they were originally printed, but when scanned at the register, the charge will actually go against the compromised credit card accounts. Since store merchants generally don’t require ID or even a signature from buyers paying with gift cards, this type of scam can be hard to spot.

Author: Christopher

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Lifeblood – Memphis, TN
Over 320,000 blood donor records missing and assumed stolen.

Tenet Healthcare Corporation – Dallas, TX
An ex-employee was confirmed to have stolen 37,000 records with patient names and personal information.

Long Island University – Brookville, NY
30,000 tax records are considered compromised because of defective mailers with missing adhesive on one side.

Source: Privacy Rights Clearinghouse

Author: Christopher

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5 billion dollars… That is the estimated value of the black market for identity theft if it was on the NY Stock Exchange. On top of that, the market for identity theft has managed to grow 60% year to year. Although only a few cases are disclosed, over 70 million cases of identity theft were reported under the California data-breach act SB1386 in 2007 so far.

The average price for a stolen identity has dropped from an average of $125 three years ago to about $16 per identity stolen according to multiple researchers. As the price goes down, the instances of identity theft will rise. Shredding all your trash and defending your identity is not necessarily enough to prevent this from happening to you, your family, and your employees. A majority of the identity theft cases are the result of corporate security breach and other events outside your control.

Looking for a way to guarantee your good name? Look no further, Lexan Systems has partnered with LifeLock to provide guaranteed protection against identity theft for you, your family, and your employees.

Author: Christopher

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