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Gift cards prove easy target for NH thieves

By Eli Okun
Union Leader Correspondent

November 08. 2015 10:45PM

Visa gift cards are on display at the Londonderry Home Depot. This year, the town has seen a spike in credit card fraud using gift cards. (Eli Okun)

LONDONDERRY — Police are warning people to be aware of a spike in credit card fraud, particularly involving altered gift cards — a phenomenon that has appeared recently in clusters around the country.

Londonderry has been seeing multiple reports of credit card fraud per week for the past several months, police detective Chris Olson said.

He said criminals obtain stolen credit card data online, re-encode magnetic strips on gift cards with that information, and then use the gift cards on spending sprees. Since gift cards don’t have identifying information, it’s easy for people to use them without getting caught.

In Londonderry, Visa Vanilla gift cards in particular have accounted for many of the reports of fraud, Olson said. Londonderry has seen instances reported at places such as Hannaford, CVS, Walgreens and Rite Aid.

As access to the necessary scanners has become simpler and cheaper, criminals have increasingly taken up gift card-related credit card fraud in the past few years, said Steven Weisman, a lawyer and professor at Bentley University in Massachusetts. He runs a blog called Scamicide.

“The technology that’s involved to be able to do this is pretty readily available, so it’s a matter of when just someone in your particular area latches onto this scam,” Weisman said.

Police say criminals get credit card information through online hacks and data breaches, email and telephone scams, and physical “skimming devices” on ATM machines.

In one instance, Olson said, police stopped two young men for speeding and discovered in their car multiple cards and a laptop with a re-encoding device, which he said costs only $89.

Olson pinpointed three factors contributing to the recent wave: “More intelligence coming out about how to do these financial online crimes. The desperation of more people needing to try these methods of making money. The sophistication of criminals.”

Though this type of gift card fraud has been happening in various places across the country, police in Merrimack, Salem, Hudson and Derry said their numbers hadn’t increased from last year, or they hadn’t seen it at all.

In Derry, a different type of scam is underway, said Capt. Vernon Thomas. There, police have seen criminals who shoplift, return items to retailers without receipts and get gift cards in exchange. Then they sell the gift cards to pawn shops.

In the last year or so, Thomas said, signs have started popping up outside pawn shops advertising that they buy gift cards.

Police and experts said people should try to use the most secure devices and connections to avoid being defrauded, but that ultimately the best advice is to monitor credit card and bank accounts frequently.

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