FBI warns consumers about phony gift cards

The growth of the secondary gift card market led the FBI on Thursday to issue a warning for consumers to beware of buying fake cards.

In the secondary market, where consumers are able to get cash for cards that they don't want and buy ones they do at a discount, an increasing amount of fraud has been reported, the FBI said through its Internet Crime Complaint Center (IC3).

The FBI said it has seen scams that involve both buyers and sellers on auction sites.

In one version, the victim pays for gift cards that don't exist. In another scam that has been reported on both auction sites and secondary market sites, crooked buyers stop the payment after receiving the PIN that allows them to use the gift card. That leaves the seller with nothing to show for the sale.

In addition, the FBI warns of social media posts offering what appear to be free gift cards for various promotions or contests. Even though they might appear to have been shared by a friends, the FBI said that they are typically scams intended to steal your personal information.

Here are the FBI's tips to avoid gift card fraud:

• Read reviews of secondary gift card marketplaces and stick to only those sites that have a good reputation.
• Verify the balance on a gift card before and after the purchase.
• Do not release the PIN in the sale of a gift card until the transaction is completed.
• Use caution when you see offers on auctions sites for deeply discounted cards or those being sold in bulk.
• If you buy a gift card in person, be sure to check that the scratch-off area on the back of the card has not been tampered with.