NEW YORK — As the holiday season begins, New York state is taking part in an ongoing initiative to protect consumers from gift card fraud.

Prompted by an increase in reports of scam artists demanding payment from consumers in the form of gift cards, the state Attorney General’s office has been working with three major retailers — Best Buy, Walmart, and Target — on reforms to their nationwide policies and practices to help protect consumers from being victimized. All three retailers have already made significant changes as part of this initiative, which is a joint effort of Attorney General Barbara Underwood and Pennsylvania Attorney General Josh Shapiro.

Gift card scams have rapidly increased in recent years. The Federal Trade Commission recently found that 26 percent of scam victims paid with a gift card between January and September 2018, compared to only 7 percent in 2015 — marking a 270 percent increase.

“With gift card scams on the rise, these changes will help provide critical new protections to New Yorkers and consumers across the country,” Underwood said. “By working collaboratively with these retailers, we’ve created a way for businesses to take proactive steps to prevent scams. I urge other retailers to follow their lead as we continue to tackle the ever-changing threats posed by scam artists.”

Although there are many types of gift card scams, the most common are:

¯ Grandparent Scam: The scammer impersonates a grandchild of the victim who claims to be in some sort of trouble, typically related to a car accident or arrest, and in need of money to pay for bail or a lawyer. Victims report that the scheme was believable because the scammers knew the names and other information about their grandchild and sounded like their grandchild.

¯ IRS Scam: The scammer impersonates someone from the IRS attempting to collect taxes allegedly owed. The scammer usually threatens arrest that day if the debt is not paid immediately via gift cards. Again, the victims report that the scheme is believable because the scammers may give the name and badge number of a real IRS agent whose identity can be verified online, the scammers may know detailed information about the victim’s tax history, or the scammers may send the victim an email that appears to be from an IRS domain.

¯ Tech Support Scam: The scammer impersonates a tech support employee claiming to work for the manufacturer of the victim’s computer. The scammer claims there is a virus and requests remote access to the victim’s computer. After the scammer “fixes” a non-existent problem, he or she demands payment for the services and refuses to unlock the computer until the victim pays.

With all of these scams, the scam artists frequently direct the victims to purchase thousands of dollars in gift cards, provide the scammers with the numbers on the back of the cards, and then destroy them, which prevents the consumers from subsequently asking the retailer to freeze the cards. Scammers also often train their victims to give false information to retail clerks who may question a large gift card purchase. The scammer then uses the gift cards almost immediately — often to purchase third-party gift cards such as iTunes, Steam, or Google Play cards. This makes it very unlikely that a victim will be able to get any money back. Once a consumer falls victim to the scheme, the scammer often continues to call the victim demanding more money in gift cards, resulting in large losses to consumers. For example, one New York resident reported losing $36,000 as the result of a grandparent scam.

Some of the changes that Walmart, Best Buy, and Target have recently implemented in partnership with the Attorney General’s initiative include:

¯ Reducing the total amount that a consumer can purchase in one transaction in store-branded gift cards.

¯ Reducing the dollar limit that can be loaded on a store-branded gift card.

¯ Placing restrictions on the redemption of store-branded gift cards, including prohibiting the redemption of store-branded gift cards for other gift cards.

¯ Enhancing employee training to help employees identify the warning signs of gift card scams and warn potential victims when appropriate.

It is important for all consumers to educate themselves to recognize the signs of a potential scam. Underwood offers several tips to remember, including:

¯ Among items that can’t be paid for with a gift card are bail, a lawyer, the IRS or tech support. If someone demands to be paid with a gift card, it’s a scam.

¯ Never give gift card numbers on the back of gift cards to an unknown person.

¯ Taxpayers should remember the IRS does not initiate contact with a consumer over a tax debt by phone, but through official mail. A big red flag for these scams are angry, threatening calls from people who say they are the IRS, urging immediate payment.

¯ Develop a secret code or “password” with family members that can be used to verify the identity of family members over the phone. Families can also ask a question that only the real family member would know the answer to, such as “what was the name of your first pet?”

¯ In general, it’s a good idea to ignore phone calls if one don’t recognize the number. If it’s someone a person knows, they will leave a voicemail or send a text.

¯ If a retail clerk warns a shopper they may be the victim of a gift card scam, heed the advice and call the loved one or law enforcement officials.

Those who discover that a loved one has fallen prey to a gift card scam, contact the retailer where the cards were purchased to see if the retailer can freeze any funds remaining on the card. Consumers should also contact the state Office of the Attorney General by calling 800-771-7755.