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Are you being scammed? Here's how to know and what to do

If someone asks for payment in the form of a gift card, just say no.

gift-cards-in-hand-green

No legitimate company or government agency will ever ask for payment in gift cards.

Sarah Tew/CNET

The call, text or email might seem on the up and up at first. It might say you won a cash prize, or that your computer needs updating, or, on a darker note, that you owe back taxes that need to be paid or you risk going to jail.

Of course, the scammers say, you can easily take care of all of these situations with some money, transferred over to them in the form of a gift card.

Sounds weird? It should. Experts say it's a red flag that you're about to be scammed. 

"For me, there are no legitimate reasons to give someone else a gift card as part of any legitimate transaction apart from a holiday or birthday, especially someone you don't know," said Jonathan Couch, senior vice president for strategy at the cybersecurity firm ThreatQuotient.

If you respond by hanging up the phone, or deleting that mail or text, it should put a stop to things. But the sad thing is, a lot of people don't. Millions of dollars are stolen each year through gift card scams.

Scammers love gift cards because they're easy for victims to buy but hard to trace. 

"Essentially, they are like cash," said Aviv Grafi, chief technology officer and founder of the cybersecurity firm Votiro. "Once they're gone, they're gone."

Which is why you may have noticed signs on the shelves next to gift cards at the local store, warning that anyone asking you to pay for anything in gift cards is trying to scam you. So heed this message if nothing else: No legitimate business will ever ask for payment in gift cards. Neither will any government agency, lawyer, tech support professional or online dating site. If someone asks you to pay them in gift cards, just hang up.

Here's a quick look at how to spot a scam and what to do if you think you've fallen victim.

How to spot a scam

Many of the scams will start with emails or robocalls, then move to where you speak with someone, Couch said. The person on the phone will use social engineering to try to convince you to buy the gift cards, then read them the numbers over the phone.

Some scammers will try to convince victims that they work for the Internal Revenue Service and are seeking the payment of taxes, then ask for that payment in the form of gift cards. Others make no bones about the fact that they're criminals, claiming that they've taken over a victim's bank account and threatening to empty it if they don't get paid off with gift cards.

In some cases, scammers will convince victims that they're going to send them money, Couch said. They'll convince victims to hand over access to a computer by asking them to install a remote connection with an app like TeamViewer or LogMeIn. Then they'll ask the victims to log in to their bank account to check that the transfer went through.

But while the victims are on their banking site, the scammers will modify the webpage code to show a transfer of money that's bigger than the one promised, he said. Then the scammers will ask for a refund of the difference in the form of gift cards. But in reality, that transferred money doesn't exist.

One of the more convincing scams involves people impersonating CEOs or other high-ranking officials at companies, said Ronnie Tokazowski, principal threat adviser for the phishing prevention firm Cofense.

The scammers will email or text employees at a given company, saying they need somewhere in the range of $500 to $2,000 to reward employees, or perhaps for gifts for family members.

In addition, though tech-support scams -- which often involve convincing victims that their computer is either infected with a virus or needs to be updated -- still primarily ask victims to "pay" with a credit card, some of the people behind those scams are now also asking for gifts cards, Tokazowski said. 

Why gift cards?

Gift cards are popular among scammers because they're easy to sell and virtually untraceable, said Pieter Arntz, malware intelligence researcher for the antivirus provider Malwarebytes.

And unlike with credit cards, where charges can be reversed, there aren't any built-in consumer protections. Once a card is used, the money is gone for good. 

"If you do it right, they are more anonymous than bitcoin," Arntz said, noting that they can be bought, sold and exchanged anonymously. On top of that, they don't leave a paper or digital trail, because most don't require the physical card to be used.

They're also sold just about everywhere these days and are good for everything from restaurants to retail stories to streaming services, making them a lot easier for victims to buy than other forms of payment like cryptocurrency.

What to do if you think you've been scammed

Usually with these types of scams, the cybercriminals are just after your money and rarely install malware or spyware on their victims' computers. But, if you did give a scammer remote access to your computer, you should remove that access, Arntz said.

In the US, you can report the scam to the Federal Trade Commission, which is the main federal agency that collects those reports, he said. Giving the entity that's being impersonated a heads-up can be helpful, too.

Also, if you think you're being targeted because of your job, you should report it to your employer, experts say. And if you do think your work computer has been infected through the scam, contact your IT department.

As for getting your money back, that's just not going to happen. Much to the scammers' benefit, gift cards don't come with the same fraud protections as traditional bank cards do. 

As Grafi notes, once the money on your card is gone, it's gone.