How Scammers Can Steal Your iTunes Gift Cards

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.

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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.