I-Team: Gift card scams cost consumers - News, Weather and Classifieds for Southern New England

I-Team: Gift card scams cost consumers

Posted: Updated:

A new scam is popping up all over New England: criminals taking advantage of everyday gift cards.

A former hacker interviewed by NBC 10's I-Team said gift cards can also be an easy way for high-tech thieves to steal.

"Once I started doing it, it was kind of a downward spiral," said Dan DeFelippi.

DeFelippi is now a consultant for the Secret Service, helping stop the crimes he used to commit.

Rhode Island State Police told NBC 10 they've already arrested several people found with dozens, even hundreds, of the bogus gift cards. Criminals run the scam up and down the Interstate 95 corridor. One batch of fake cards was even found hidden inside a car's gas tank.

"I can tell you it's definitely on the rise," said Lt. Col. Michael Winquist. "It's a very easy way for them to carry a large amount of money."

Here's how the scam typically works. A thief steals credit card data from a skimmer attached to cash register or ATM, or by hacking websites. Then, the thief pays for gift cards using a stolen credit card number. By the time consumers cancel their credit cards, the gift cards are already loaded.

"Once you have them, it's almost the same as having cash in your pocket," DeFelippi said.

Another variation on the scam is buying products with the bogus gift cards, and then returning them to local stores for cash. Winquist said organized crime is often behind the crimes, sending card runners on road trips throughout New England.

"We've seen a lot of people coming out of New York. It seems like there are organized groups that are heading up and down the East Coast," he said.

That's what happened in March, when East Providence police made a traffic stop on I-195 and found more than 150 gift cards hidden inside a rental car with New York plates.

Police say suspects Sherlyn Oplan and Luc Beaubrun were part of an elaborate scheme to steal thousands.

Then, just this week, East Providence police made another arrest, charging two people stopped on I-195 with forgery and counterfeiting. Omar Nelson, 32, and Tabitha Jeriles, 26, were found with more than 100 gift cards inside a rental car with New York places. The Secret Service is now investigating the case.

In another twist on the scam, blank gift cards or even old hotel room keys are actually turned into credit cards. Stolen credit card numbers are printed on the magnetic strip on the back. The result is that what looks like a gift card is actually a stolen credit card.

"It's very hard to detect. You actually need a card reader," Winquist said.

So how can you protect yourself? NBC 10 asked former hacker DeFelippi.

"Always you watch your accounts," DeFelippi told the I-Team. "The faster you catch any fraud, the better off you are."

DeFelippi noted that everyone pays for the gift card scam and credit card fraud in the long run.

While banks don't hold consumers responsible for fraudulent charges, the companies still have to cover the stolen cash somehow. That translates to higher fees for consumers.

  • NBC 10 I-Team

  • Fraud and Waste Hot Line

    Trust the NBC 10 I-Team to uncover waste and fraud in Southern New England.

    Have a story the NBC 10 I-Team needs to know about?

    Call the I-Team Fraud and Waste Hotline at 401-455-9123 or e-mail iteam@wjar.com.

    About the I-Team

    NBC 10's I-Team was the first investigative unit in Rhode Island.

    Formed in 1979 by I-Team reporters Jim Taricani and Gary Scurka, the I-Team has produced award-winning investigations into organized crime, public corruption and social issues ranging from child abuse to battered women.

  • The I-TeamMore>>

  • Katie Davis

    Katie Davis

    Katie Davis is an I-Team reporter at NBC 10. She joined the team in January 2010 and is excited to live and work in New England.
    Katie Davis is an I-Team reporter at NBC 10. She joined the team in January 2010 and is excited to live and work in New England.
  • Parker Gavigan

    Parker Gavigan

    Parker Gavigan is an Associated Press award-winning journalist, and was named to the NBC 10 I-Team in January 2013. Parker digs deeper to get the answers that matter to you.
    Parker Gavigan is an Associated Press award-winning journalist, and was named to the NBC 10 I-Team in January 2013. Parker digs deeper to get the answers that matter to you.
Powered by WorldNow

23 Kenney Drive
Cranston, R.I., 02920

Telephone: 401.455.9100
Fax: 401.455.9140
Email: news@wjar.com

Can't find something?

NBC 10 Outerwear Provided by:

NBC 10 Media Relations
Provided by:

Powered by WorldNow
All content © Copyright 2000 - 2014 Media General Communications Holdings, LLC. A Media General Company.