Financial Wellness
New Maryland Law Protects Against Gift Card Draining
Gift cards are always a good gift idea for the holidays, especially if you choose one that fits the recipient's lifestyle, shopping, and dining preferences.
But have you ever given or received a gift card to find it's empty? Or have you paid for something like a past bill by loading money onto a gift card and then shared the numbers off the back of the card? If so, you aren't alone.
An AARP survey found 73 million U.S. adults have experienced some form of gift card fraud, with about one-quarter of consumers saying they have either given or received depleted gift cards. More than half were unable to obtain a credit or refund for the missing balance. Equally disturbing, one in four adults surveyed said they bought gift cards solely to pay what turned out to be a false and fraudulent debt, bill, or fee.
To help fight gift card fraud, a new law recently passed in Maryland aims to thwart an increasingly common scam known as card "draining."
Here's how it works: Criminals steal gift cards from store displays, copy the numbers, and drain the cards' balance. They return them back to store shelves so they look untouched—they remove the sticker covering the PIN on the back of the gift card and replace it with a new one. The cards are worthless when purchased by consumers.
Maryland's new law, called the Gift Card Scams Prevention Act of 2024, mandates that gift cards sold in stores be encased in secure packaging so thieves can't illegally obtain their numbers. Experts say the newly required packaging will make the funds stored on gift cards less vulnerable, since their barcodes and PIN numbers are covered and can no longer be scratched until after purchase.
The new law also requires gift card sellers to train employees on how to identify card fraud, and for companies that sell gift cards online to register them with the Office of the Attorney General's Division of Consumer Protection. Maryland is the first state to pass this legislation.
The Federal Trade Commission released data in May showing that gift card scams, which multiplied during the COVID-19 pandemic, accounted for $228 million in losses in 2023. The U.S. Department of Homeland Security has even launched a task force to fight card draining.
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Knock out your holiday shopping list in no time with Visa gift cards, available for purchase in any Tower branch. The gift cards are available in any amount from $10 to $500, so they fit any budget. The cards are kept behind the teller counter until purchase so they are secure. There is a small fee of $3.95 per gift card, and the cards are only valid in the U.S.
But have you ever given or received a gift card to find it's empty? Or have you paid for something like a past bill by loading money onto a gift card and then shared the numbers off the back of the card? If so, you aren't alone.
An AARP survey found 73 million U.S. adults have experienced some form of gift card fraud, with about one-quarter of consumers saying they have either given or received depleted gift cards. More than half were unable to obtain a credit or refund for the missing balance. Equally disturbing, one in four adults surveyed said they bought gift cards solely to pay what turned out to be a false and fraudulent debt, bill, or fee.
To help fight gift card fraud, a new law recently passed in Maryland aims to thwart an increasingly common scam known as card "draining."
Here's how it works: Criminals steal gift cards from store displays, copy the numbers, and drain the cards' balance. They return them back to store shelves so they look untouched—they remove the sticker covering the PIN on the back of the gift card and replace it with a new one. The cards are worthless when purchased by consumers.
Maryland's new law, called the Gift Card Scams Prevention Act of 2024, mandates that gift cards sold in stores be encased in secure packaging so thieves can't illegally obtain their numbers. Experts say the newly required packaging will make the funds stored on gift cards less vulnerable, since their barcodes and PIN numbers are covered and can no longer be scratched until after purchase.
The new law also requires gift card sellers to train employees on how to identify card fraud, and for companies that sell gift cards online to register them with the Office of the Attorney General's Division of Consumer Protection. Maryland is the first state to pass this legislation.
The Federal Trade Commission released data in May showing that gift card scams, which multiplied during the COVID-19 pandemic, accounted for $228 million in losses in 2023. The U.S. Department of Homeland Security has even launched a task force to fight card draining.
Knock out your holiday shopping list in no time with Visa gift cards, available for purchase in any Tower branch. The gift cards are available in any amount from $10 to $500, so they fit any budget. The cards are kept behind the teller counter until purchase so they are secure. There is a small fee of $3.95 per gift card, and the cards are only valid in the U.S.
Resources: CBS News, Maryland General Assembly, Association for the Advancement of Retired People (AARP), Federal Trade Commission
