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LJK: Your new gift card could be used by a scammer

Posted at 2:27 PM, Mar 26, 2018
and last updated 2018-03-26 22:37:02-04

Get a gift card recently? You better use it or you could lose it.

Fraud is growing. Scammers are taking balances. Ask Michele Michelson.

Michele bought 3 Fogo de Chao restaurant gift cards, worth $125.

But the server had some alarming news. The cards had already been used. So Michele and her guests had to spend more than $300 dollars for their meal.

The restaurant gave her a receipt showing the cards had been used in Austin, Texas. Michele says she has never been there.

She says the restaurant and the store that sold the card wouldn't help her. So Michele let me know.

We asked Fogo how this happened.

Instead, they answered.. "we know that any industry is susceptible to, and may experience, credit and gift card fraud. We have taken measures to mitigate that risk."

While we don't know how that fraud happened, Jim Stickely of Stickley on Security, says it's a big problem.

We went into local stores and found most cards hanging on racks had numbers that could be easily seen and copied.

On some cards, even pin numbers were exposed.

Stickley's been hired by businesses to hack them and test vulnerability.

He says thieves can go to stores, take pictures of cards and put them back on the rack.

"I can come back a couple of days later, look and see if cards are gone. I know somebody bought them and activated them," Stickley says.

Once activated, thieves turn those card numbers and pins into cash, using legit gift card trade-in sites.

Stickley says they pay for cards. And there are other ways cards can be sold.

As for Michele, Fogo de Chao stepped up. They refunded what Michele paid for her meal.