Rising number of consumers falling victim to iTunes card fraud

It’s a new twist to an old scheme: scammers are calling their (usually elderly) victims and claiming to be the IRS or a grandchild; but instead of looking for money, they’re after gift cards.

For 85-year-old Diane Van Crey, it started with a morning phone call and ended with the great grandmother losing more than $5,200 in savings.

"Mikey came on the way crying saying Uma, I'm sick,” Van Crey recalled.

Except the caller wasn't Mikey, her 26-year-old grandson. It was a con artist claiming to be him, in jail and in desperate need of money. But instead of requesting cash he asked her to go to the bank and buy Apple iTunes gift cards.

Why iTunes? According to the Federal Trade Commission they’re popular, easy to get, and virtually untraceable. Once the scammer asks for the 16-digit code on the back, they sell the cards on the black market at a discount.

"They're selling them for cash and usually at a discounted rate. We think they're getting 20 cents on the dollar,” said the FCC’s Regional Acting Director Todd Kossow.

In July 2016, the FTC’s Consumer Sentinel Network received 227 complaints about this issue, bringing the total complaint number thus far in 2016 to 687 (with 29 of those being from Illinois consumers).

Many of the victims are elderly like Van Crey. And the scammers are very convincing, sometimes swearing the victim to secrecy until it's too late.

"I lied more than day than I did my whole life,” Van Crey said.

Van Crey’s daughter Sherry Ziegler walked in to find her mother on the phone with the con artist, giving him the 16-digit codes to all 76 of the iTunes cards she bought. By then it was too late.

"Chase Bank called and said ‘something's going on with your mom,’" Ziegler said. “She cleared out her checking account. It was over $5000 that they took from her.”

The other problem is retailers are under no legal obligation to limit the sale of ITunes cards to customers. Van Crey says she bought $2,000 worth of cards at a Walgreens in Deerfield, apparently going against store policy.

“Their policy is to sell one $500 gift card per person. One store sold her four at one time,” Ziegler said.

It happened again when Van Crey went to a Bannockburn grocery store, where she was able to buy $3,000 in iTunes cards. But when she went to another Walgreens, employees DID limit her to one card.

"We would hope that retailers would educate employees about these scams,” Kossow said.

After calls from WGN, Walgreens did reimburse Van Crey for one $500 gift card.

“We have education and training programs in place to help our employees recognize situations where a customer might be a victim of fraud,” said spokesman Jim Graham.

Heinen's, the grocery store, refunded her $400. Owner Tom Heinen said, "It's a very unfortunate situation,” He said they did their best to challenge the purchase, but “she said she was buying the cards for her employees."

Despite a long investigation by the Riverwoods Police Department, the con artist, who was traced to Montreal, was never caught. It's been a costly and frustrating experience for the family.

A spokesman with Apple said the company is working with one of the stores to refund Van Crey the $450 the scam artist was not able to activate.

If you think you’re the victim of an iTunes Phone scam call Apple Support immediately at 1-800-275-2273. Also contact your local police as well as the Federal Trade Commission.