One of our clients received a call recently from a “Centrelink officer” explaining that he could receive back-pay for underpaid Age Pension payments, if he first paid a ‘refundable fee’ to Centrelink with an iTunes gift card.

Fortunately, the client didn’t pay the fee, but instead called their adviser for their thoughts. The adviser confirmed the client’s suspicion that the offer was not legitimate and thankfully no harm was done.

How the scam works

Scammers impersonate a business or government department and call individuals to offer services such as NBN broadband, payment of fictitious debts, or a financial windfall such as a refund.

To accept the offer, the individual has to make a refundable once-off payment to the ‘service provider’ using an iTunes gift card.

The scammers will get their victims to travel to a business where iTunes gift cards are sold, such as a supermarket or department store, and get them to purchase amounts sometimes worth thousands of dollars.

According to the Australian Competition & Consumer Commission (ACCC)*, the scammers are very persistent once they have a victim hooked and will, for example, keep their victim on the phone while they’re in a store buying the gift cards. Once a victim has bought the card, the scammer will get them to read the serial number on the back—it’s this information they use to then on-sell the gift card.

“If you pay for a scammer’s con with iTunes gift cards it’s nearly impossible to get your money back. Don’t ever believe the scammer’s lies, no matter how convincing they sound—hang up on their calls and delete their emails immediately,” the ACCC says.

The key lesson here for clients is that legitimate businesses and Government departments will never ask for payment with an iTunes card.

Over 1,200 victims last year

During the first three quarters of 2017, reports to the ACCC’s Scamwatch* show 1,236 people lost nearly $540,000 to scammers using gift cards as payments.

There are three common scam examples the ACCC is currently seeing where scammers are demanding iTunes gift cards as payment*:

  • Tax scams – the scammer pretends to be from the Australian Taxation Office and claims there is a warrant out for their victim’s arrest. If the victim doesn’t pay an immediate ‘fine’ using iTunes gift cards, the scammer claims police will come and handcuff them.
  • Catch-a-hacker scam – scammers pretending to be Telstra will ask their victim to help them catch a ‘hacker’ who’s trying to get into their PC or smart devices. They use this sham story to get the victim to buy iTunes cards as a ‘trap’ for catching the hacker.
  • Centrelink scams – the scammer pretends to be from Centrelink and tells their victim they’re entitled to an additional payment, and that they need to pay a ‘release fee’ in iTunes gift cards to receive the payment.

*ACCC Media Release number MR 152/17, 11 September 2017

Disclaimer: This article is not legal or personal financial advice and should not be relied on as such. Any advice in this document is general advice only and does not take into account the objectives, financial situation or needs of any particular person. You should obtain financial advice relevant to your circumstances before making investment decisions. Where a particular financial product is mentioned you should consider the Product Disclosure Statement before making any decisions in relation to the product. Whilst every reasonable care has been taken in distributing this article, Australian Unity Personal Financial Services Ltd does not guarantee the accuracy or completeness of the information contained within it. Any views expressed are those of the author(s) and do not represent the views of Australian Unity Personal Financial Services Ltd. Australian Unity Personal Financial Services Ltd does not guarantee any particular outcome or future performance. Tacation Information in this document should not be relied upon without seeking specialist advice from a tax professional. Australian Unity Personal Financial Services Ltd ABN 26 098 725 145, AFSL & Australian Credit Licence No. 234459, 114 Albert Road, South Melbourne, VIC 3205. This document produced in February 2018. © Copyright 2018