Scams

How Scammers Can Steal Your iTunes Gift Cards

Don't get conned into giving out the 16-digit codes over the phone.

While Apple fans line up to get their hands on the new iPhone 7, scammers are lining up to steal your iTunes gift cards.

The popular gift cards are sold everywhere, from convenience stores and supermarkets to warehouse clubs and websites. I buy my iTunes gift cards at a discount at Costco. A four-pack of $25 gift cards sells for about $84, 16% below face value. I immediately take them home, scratch off the numeric shield that hides a card’s 16-digit code, and transfer the value to my iTunes account. Whenever I make digital purchases at iTunes, iBooks, Apple Music or Apple’s App Store, the amount is deducted from my account.

It turns out con artists are fans of iTunes gift cards, too.

Apple, the Federal Trade Commission and the Internal Revenue Service are warning consumers to hang up on callers demanding immediate payment of fictitious debts using iTunes gift cards. The scammers spin a variety of tales about back taxes, overdue utility bills, or relatives in trouble to trick you into running out to buy gift cards and then divulging the 16-digit codes over the phone.

Here’s the bottom line from Apple: You should never use iTunes gift cards to make payments for anything other than membership to and products from iTunes, iBooks, Apple Music and Apple’s App Store. If you hand over the card codes, the scammers will use them to buy Apple products for themselves or sell the codes on the black market. Either way, your money is gone forever.

In the latest twist on this con, the IRS says sophisticated scammers are even using robo-callers to play automated messages that threaten victims with legal action if they don’t call back to settle bogus debts with gift cards. According to the IRS, demand for payment with a gift card is a clear sign of a scam. Further, the IRS always contacts taxpayers by mail about unpaid taxes, and its agents will never demand immediate payment over the phone.

In addition to iTunes gift cards, the FTC says other payment methods that con artists are asking for include Amazon gift cards, PayPal, and reloadable cards including MoneyPak, Reloadit and Vanilla. Scammers also might request that money be wired via Western Union or MoneyGram. The FTC says legitimate government officials do not demand payments by these methods.

If you receive a phone call insisting on payment by iTunes gift card (or something similar), hang up. I take the extra step of blocking that number in my iPhone contacts. If the caller claimed to be with the IRS, file a report on the IRS Impersonation Scam Reporting web page. You can also file scam reports on the FTC Complaint Assistant web page.

Most Popular

The Wrong Way to Achieve Wealth
personal finance

The Wrong Way to Achieve Wealth

For some down-to-earth, basic advice on money and life, I have a book to recommend: “Your Total Wealth: The Heart and Soul of Financial Literacy.”
April 17, 2021
Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs
Coronavirus and Your Money

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs

People have lots of questions about the new $3,000 or $3,600 child tax credit and the advance payments that the IRS will send to most families in 2021…
April 14, 2021
2021 Child Tax Credit Calculator
Tax Breaks

2021 Child Tax Credit Calculator

See how much money you'll get in advance under the new child tax credit rules for 2021.
April 14, 2021

Recommended

What You Need to Know about College 529 Savings Plans
529 Plans

What You Need to Know about College 529 Savings Plans

Do you know how much you’re able to contribute or what the funds could be used to pay for? How about how contributing affects your taxes? Check out th…
April 14, 2021
37 Ways to Earn Extra Cash in 2021
business

37 Ways to Earn Extra Cash in 2021

We flag a wide variety of cool side hustles to earn bonus bucks to cover expenses expected and unexpected as we begin to emerge from the pandemic lock…
April 8, 2021
6 Money-Smart Ways to Spend Your Third Stimulus Check
Coronavirus and Your Money

6 Money-Smart Ways to Spend Your Third Stimulus Check

If you don't have to use your third stimulus check for basic necessities, consider putting the money to work for you. You'll thank yourself later.
March 20, 2021
36 Best Amazon Prime Benefits to Use in 2021
Smart Buying

36 Best Amazon Prime Benefits to Use in 2021

At $119 for Amazon Prime, get your money's worth by taking full advantage of your membership. Here's a list of the best Prime perks.
March 17, 2021