Federal agents warn of gift card fraud

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The National Retail Federation says gift cards are the number one most requested gift this holiday season. Holiday shoppers are projected to spend $31 billion on gift cards.

Federal investigators said the popular cards are also hot, literally, with thieves. Secret Service agents in Columbus said they recently busted up a gift card fraud scheme worth $2 million.

Secret Service Resident Agent in Charge, John Schuck, spent two years cracking the case.

Schuck says the scheme begins when hackers hijack your credit card information. Thieves use the numbers to re-encode the magnetic strip on gift cards and just like that your credit line is now posing as a gift card and thieves can shop 'til they drop.

"This is their occupation. This is how they make their money. This is their job," explained Schuck.

CrimeTracker 10 was there in March of 2015 when the Secret Service raided a half dozen Columbus businesses and seized dozens of ATM machines.

Agent Schuck says the investigation exposed a gift card fraud criminal enterprise that involved as many as 50-suspects and netted two million dollars.

The convicted ringleader, Francois Toure, is serving a five-year prison sentence after agents say he used stolen gift cards to go on elaborate shopping sprees.

Agents said Toure spent thousands of dollars on designer clothes and shoes and was driving a Porsche Panarama when he was arrested.

Federal investigators said it's less risky for thieves to encode gift cards because they draw less attention.

"It's more suspicious if people are using multiple credit cards that are getting declined than multiple gift cards. Because the gift cards you can say, oh I must have used that one already," said Schuck.

Agents said you watch your credit card like a hawk when you hand it over because it's easy for a dishonest employee to skim your card using a small, handheld device.

"If you're not paying attention, you'll never see it," said Schuck.

Investigators urge you to make an effort to pay cash at places where you may briefly lose sight of your credit card, like at a restaurant or a fast food drive-thru.

If you pay with plastic, investigators say to use a credit card rather than a debit card. Federal agents caution a thief can use a debit card to drain your accounts before you even know what has happened.