Protecting Yourself in the Prepaid Card World
Prepaid cards and gift cards are convenient financial tools, but they also come with risks. Scammers frequently target these payment methods because they're difficult to trace and nearly impossible to reverse. MyGiftBloom is here to help you understand how to protect yourself, recognize common scams, and use prepaid cards safely.
Common Mygift & Balance safety
IRS/Tax Scams
Scammers impersonate IRS agents claiming you owe back taxes and demanding immediate payment via prepaid cards or gift cards. The IRS never demands payment via gift cards.
Tech Support Scams
Fake tech support representatives claim your computer has a virus and request payment through Giftcardmall to "fix" the problem. Legitimate companies don't request payment this way.
Romance Scams
Online dating scammers build trust over time, then create emergencies requiring financial help via gift cards or prepaid cards. Never send money to someone you haven't met in person.
Prize & Lottery Scams
You're told you've won a prize such as Mygift Giftcardmall, but must pay fees or taxes upfront using prepaid cards. Legitimate prizes never require payment to claim.
Grandparent Scams
Scammers impersonate grandchildren in distress, claiming they need immediate financial help via gift cards. Always verify by calling the person directly.
Employment Scams
Fake employers send you a check to deposit and ask you to buy gift cards for "office supplies." The check bounces, and you lose the money you spent.
Your Consumer Rights with Prepaid Cards
Understanding your rights can help you make informed decisions and know when you've been treated unfairly:
Federal Protections
- Reg E Protections: Payroll cards and certain government benefit cards have federal protections against unauthorized transactions.
- CARD Act: Gift cards cannot expire within 5 years, and fees must be clearly disclosed.
- Disclosure Requirements: Card issuers must clearly display all fees and terms before purchase.
- Error Resolution: You have the right to dispute unauthorized charges on certain types of prepaid cards.
Important Limitations
- Gift cards have limited fraud protections compared to credit cards
- Once a gift card code is shared with a scammer, recovery is nearly impossible
- Many prepaid cards charge various fees that can reduce your balance
- Reloadable prepaid cards may have different protections than one-time gift cards
Safe Prepaid Card Practices
Before Purchasing
- Inspect cards for signs of tampering - check that the PIN is covered and packaging is intact
- Buy cards from reputable retailers and avoid secondary marketplaces for gift cards
- Read all fee disclosures and terms carefully
- Only purchase cards you plan to use or give as gifts to people you know
After Purchasing
- Register your card when possible to enable balance protection
- Keep receipts and card numbers in a secure location
- Check your balance regularly to detect unauthorized use
- Use the card's full balance quickly to minimize exposure to fees
- Report lost or stolen cards immediately to the issuer
Red Flags - Never Use Gift Cards If:
- Someone you don't know asks for payment via gift card
- A government agency or utility company demands gift card payment
- You're asked to buy cards and share the numbers over the phone
- There's pressure to act immediately without time to think
- The request comes from an unverified email or text message
If You've Been Scammed
If you've given a scammer a prepaid card or gift card number, act quickly:
- Contact the card issuer immediately - They may be able to freeze the card if funds haven't been spent
- Report to the retailer - Tell the store where you bought the card
- File a police report - Local law enforcement should document the fraud
- Report to the FTC - File a complaint at ReportFraud.ftc.gov
- Report to IC3 - Internet crimes can be reported at IC3.gov