Spotting Fraudulent Prepaid Gift Cards in the Wild (US Bank)

Long time readers of the blog know I have a soft spot for US Bank Prepaid Visa and Mastercard Gift cards. In fact it seems I’m not alone–with scammers and fraudsters also loving these cards. So it was no surprise really when I came across one of the worst fakes I’ve ever seen today at a trip to a Kroger store. Fortunately I didn’t buy the card–and instead took it to document the issue and stop anyone else from being defrauded. Read on to see the evidence that I spotted which quickly alerted me to the scam, and some best practices to deal with the inevitable fraud you’ll experience buying these cards.

Evidence of Tampering

To be clear this was one of the WORST fraud attempts I’ve ever seen–sometimes I’ll only spot one of these types of situations–but this time there were no less than 3 dead giveaways.

One trick fraudsters use is to open the packaging, remove the card and copy the information off of it–and then put it back. Then when you activate the card they quickly drain it. (How do they know you bought it? Maybe they keep an eye on the rack, maybe they try randomly–more on that later).

This package had all the telltale signs of glue tampering — wavy packaging, caused by wet glue drying unevenly. This card showed poorly even hanging on the rack.

Fraudulent card next two two non-tampered cards. Notice the rippling.

In Addition the side of the package had some weird raised bumps, likely from either glue build up or paper debris:

Another view of the wavy front and the three bumps on the side.

How do they get the card out without tampering with the back of the packaging? It seems like they peeled back the front printed metallic paper, slicing the paperboard below 2 times to allow access to the card itself:

Left: Interior view of the slices — right: The front paperboard sliced clean through allowing access to the card inside.

I mentioned that the cards are removed and the information written down/cloned. This situation was even more amateur–with the card itself staying in the package but a sticker being put on the back of the card:

This sticker will correspond to another card–one the fraudsters have safely tucked away. Once scanned it will not activate the card in the package but rather the card the scammers made a copy of the back barcode of.

In fact this scam is so prevalent that examples of this sticker scam go back almost as far as Visa/MC Debit prepaid cards themselves. For this reason I always check the back of cards I’m going to buy. The small numbers visible in the window should be raised and shiny–not dull and paper/ink looking like these were:

The shadow and the fact that the numbers are not raised –the paper background all led me to know this was going to be a sticker scam.

What to Do When (not if) You’re Scammed

US Bank continues to ship nearly consecutive cards — something that boggles my mind, and leads to pretty easy ‘guessing’ of new card numbers. For this reason I’ve seen about 1% of my card purchases be subject to fraud. Most times this is a scammer trying to activate, or balance check a card before it has been purchased. This red flag causes US Bank to lock the card and you’ll find out when you try to register and use it.

Instead of activating you’ll be prompted to call the number on the back of the card (or you won’t, and you’ll just be dumped back to www.prepaidgiftbalance.com with no error message). Calling the number on the back of the card you’ll be asked for your information to register the card–and you’ll need to know the exact amount loaded to the card. In about 10 days you’ll receive a replacement card with embossed letters and numbers.

Keep all your receipts and make sure you register and drain these cards as soon as possible. One thing that is annoying is there is a velocity limit on registering the cards–you’ll need to switch device/IP to get around it. The really annoying part is that limit sometimes makes me think I’ve got a bad card, when really I’ve just hit my max registration limit and need to switch devices.

This isn’t the first time I’ve written about issues with US Bank cards and fraud, and I’m certain it won’t be the last. I’ve always been made whole by US Bank, but the legwork and phone calls are never fun. Hopefully seeing the images in this post and the warnings here will help you limit the headaches and avoid any really bad scammed cards in the future.

Be careful out there folks!

About the author

- Written by Sam Simon. All ideas are my own, but I encourage you to see my point of view and I promise I'll try to do the same. Connect with me on Twitter @Milenomics.

Comments

  1. To pile on the amount of “attempted use before activation” fraud cards I get, US Bank has also blocked my phone number. When I dial their 888 number to set PINs and often find out my card is not active, it automatically hangs up on me. Other family members do not have this issue, so I have to use their cards to call and get my cards replaced. I just submitted a CFPB complaint about this demanding they unblock my phone number as it breaks their card agreement terms to refuse to talk to me. I know 3 other people personally that also have their numbers blocked.

    Oh yeah, and another kicker. I bought 6 cards yesterday… ALL SIX were compromised!

    Great work, US Bank!

      1. @Leo, these are not cards that were tampered with. They were attempted to be used in Jan of this year. As Sam mentioned, US Bank’s process of creating cards is horrible and the numbers are easy to predict. Fraudsters can easily figure out card numbers to try, and once a charge is attempted US Bank locks the card number, but they can’t pull the card from the shelf. What they SHOULD be doing is not even activate the card at the store! If that happened, I could go grab another off the shelf and get a good one. So, US Bank sucks…

    1. Curtis: 6/6 — that’s a gold medal in fraud. 🙁 Seriously doesn’t make sense how ONLY US bank cards have these issues. I’ve waited to activate register metabank cards for weeks and never once have had a fraud issue on them. I don’t know if US Bank is just overly cautious and thinks annoying their customers is the safer way to handle it–but it is tiring. I’m asking myself what would it take for me to swear off of US Bank cards…

      1. @Sam, I have Metas that have been around for many months and never had an issue. It is indeed a US Bank only problem as far as I can tell. Their system is so bad that earlier this year when you got a bad card, you would need to speak to someone to get the card replaced, but the CSRs would require that you are authenticated through their automated system by entering the CVC code, but you COULDN’T do that because the second you enter the card number it transferred you to someone. No logic, and whoever runs Ops there needs to be removed. Finally, they figured this out and now ask for the last 8 digits of the barcode on the back of the card to confirm that you actually have the card in your possession, as opposed to fraudsters that do not and are sequentially figuring out card numbers to try. But you could probably guess, that a lot of those 8 digit numbers are sequential too… ha!

  2. I’ve been doing this for a long time (8-9 years) and I’ve only had a few cards that were compromised. That was several years ago, and I haven’t had that issue recently. Although that could also be from the reduced purchase of gift cards due to the difficulty in liquidating them. I’d be thrilled to find new ways that are inexpensive to manufacture spend or liquidate cards. The “hobby” has been getting harder to continue in. I just ran across your blog and wish I had known about it sooner. Keep up the great work and thanks for the info.

    1. Thanks Charles. I think we’ve gotten savvier as buyers of these cards as well and that’s helped as well to decrease our fraud. I didn’t buy these specific cards but I know years ago when I was green I would have!

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