[00:00:06] There’s an Apple gift card that I got from 7-Eleven, that was 500.
I have a $500 Best Buy card, and I purchased it at Best Buy.
I went to Kohls, to Sephora, and I bought $1000.
Here’s another, some more gift cards from Target for $500.
There’s a $2000 from Nordstrom’s Rack.
Where else are billions of dollars being lost to criminal enterprises?
(MUSIC SEGUE)
[00:00:45] Bob: Welcome back to The Perfect Scam.
I’m your host, Bob Sullivan.
And for a growing number of Americans, gift cards represent a financial nightmare.
So today, we begin a two-part special report on the problem of gift cards.
The results are pretty shocking.
But first, let’s meet Henriette.
[00:02:18] Bob: And where is North Aurora?
[00:02:19] Henriette Schmuhl: It’s outside of Chicago about 45, 50 miles.
[00:02:23] Bob: So it’s part of the larger Chicagoland, right?
[00:02:26] Henriette Schmuhl: Right.
Right, that it’s west of Chicago.
[00:02:31] Bob: And how long have you been there?
[00:02:32] Henriette Schmuhl: Oh, we’ve been here since around 2000.
[00:02:35] Bob: Since 2000.
Where did you move from before that?
[00:02:37] Henriette Schmuhl: California.
[00:02:39] Bob: Ooh, that’s a big change.
I lived there for about 30 years, and I married my husband out there.
They called on the house phone.
I don’t generally answer it if I don’t know who it was.
Or who it is.
This must be something important.
[00:03:28] Bob: After all, her phone told her it was important.
On the other end of the line is a man who said he was Andrew Paul, a Sr.
Investigator with Homeland Security.
And he showed me the arrest warrant.
I said, “I’ve not done anything wrong.”
[00:04:11] Bob: The investigator asks Henriette if she’d ever been to Charlotte, North Carolina.
She had been for work where she’d rented a car.
And then tells her she’s in big trouble.
Police have found a car there registered in her name and it was full of cocaine.
And I thought, wow, this is crazy.
I thought, I can’t, I just don’t know how this could be.
I go, “Okay.”
[00:05:13] Bob: I want to prevent you from going to jail for this?
Henriette doesn’t know what to think, what to do.
[00:05:20] Bob: This seems like, like so much to digest all at once.
That’s what, that’s crazy.
[00:05:25] Henriette Schmuhl: I know, it was like, I was just dumbfounded.
I just, I didn’t know what to do.
I, actually I just, I just couldn’t stop crying when I’m talking.
And I said, “I, I just don’t understand this.
Why would somebody I know do something like this to me?
It just doesn’t make any sense.”
You know, so he kept showing me different things.
So I said, “Okay.”
He knew the homes I have had sold, and bought and sold in California.
It was like wow, you know, he knew where we had last lived before we moved here.
[00:07:09] Henriette Schmuhl: Uh-huh, ‘Cause I had the case number.
You don’t even have to go there."
‘Cause it’s a federal offense."
I went, “Okay.”
[00:07:27] Bob: She isn’t even supposed to tell her husband, but she does.
He’s equally shocked, but agrees to help Henriette however he can.
So Henriette and her husband begin to withdraw all their cash.
When bank employees start asking questions, the man on the phone is right there with the answers.
[00:07:53] Henriette Schmuhl: I went to both banks, and drew out money.
And you know, did I know what I was doing?
I said, “Okay.”
So we did that.
He, he went with me on the cell phone everywhere.
And I stood there in the food court putting money into this little bitcoin machine.
So I thought, oh, okay.
Don’t worry about it, we’ll cover all of that."
So then I was just using the charge cards to get gift cards where I could.
I did a lot at Walgreens.
How would that work?
I never had to deal with it.
[00:13:05] Henriette Schmuhl: Well, some of them were Walmart.
Um, I went to Jewel even and got cards.
I had all of the receipts.
And some were Best Buy cards, some were Target cards.
[00:13:27] Bob: So do you have them in front of you right now?
I hear you flipping through papers.
[00:13:30] Henriette Schmuhl: No, I have copies.
[00:13:32] Bob: Oh, okay.
Well would you mind just, you know, reading off 7 or 8 of them to me?
I have a, and that was 500.
I have a $500 Best Buy card, that was a gift card.
And I purchased it at Best Buy.
I also went to JCPenneys and got some.
But if I bought 500, I couldn’t.
I mean they, there’s a $2000 from initial big ones that were for Nordstrom’s Rack.
And they wouldn’t let me do it.
And they said, “No, yeah we can’t do that.”
So we had, I had a stack of those that was tremendous.
[00:16:32] Bob: Yeah, this is all so overwhelming.
I said “I’ve, I’ve been a good girl.
I’m a Christian.
I just, I couldn’t see anything happening to them.
[00:17:20] Bob: You were protecting them, yeah.
I said, “Oh, okay.”
He said, “But it takes a few days.”
I said, “Alright.”
I says, “Okay.”
Well the 5th was a holiday.
Then the 6th came, and I texted him, “Where are you?”
And I didn’t hear from him.
The 7th, and then he wasn’t contacting me.
So then the Friday the 8th, I called.
No one answered the phone.
Well Friday, the phone had been disconnected.
No longer in service.
And I called back again, and this was about 4 o’clock that Friday night.
And I called back again, I thought, maybe I misdialed.
So I called back again, and it, same thing happened.
There’s no hope of recovering any of the family’s money.
[00:19:25] Bob: You told me that the total was about $250,000.
[00:19:27] Henriette Schmuhl: Right.
[00:19:28] Bob: Wow.
How much of that was gift cards do you think?
[00:19:30] Henriette Schmuhl: I think that about 20 to 25.
[00:19:44] Henriette Schmuhl: Yes.
[00:19:45] Bob: Happy birthday.
[00:19:46] Henriette Schmuhl: Thank you.
[00:19:47] Bob: It’s been quite a year, huh.
[00:19:48] Henriette Schmuhl: Yes, it has, yes it has.
It’s just overwhelming.
I am, I’m putting it behind me.
I did have to go; I am now working for Kohls.
So I have to pay the $20,000 back.
[00:20:52] Bob: Henriette is hardly alone.
A woman we’ll call Beth suffered from a similar gift card fraud attack.
This time it was a call from someone claiming to be from the Internal Revenue Service.
It looked all official.
So this gentleman said, you know, “You, you owe the IRS.”
And I said, “Well how much?”
And I said, “What do you mean I have to go before a judge?”
I said, “I pay my taxes, I’ve paid every estimate payment.
I have an accountant,” and they said, “It doesn’t matter.
They have caught you in fraud.
And they said, “Well we don’t have to tell you anything.”
And they said, “Well, no, you’re going to have to go through a judge.
You’re going, we are, our job is simply to notify you.”
[00:22:43] Bob: He puts Beth on hold, but then returns with some better news.
I’ll connect you to this place.”
[00:23:24] Bob: Gift cards?
[00:23:34] Beth: He was clear we had to go get cash.
So I went to the bank, pulled out cash, I can see it as we speak.
I got $3000.
That time he informed me it’s going to be $3000.
He goes, “Well, do they have Target cards?”
And I said, “Yes.”
He said, “Well you’re going to have to get this many Target cards.”
So I got whatever the amount was that equaled $3000.
So I’m at the counter, and I’m beginning to feel a little weird.
You want this many gift cards?
But sitting there in her car, something snaps inside of her.
Get on the phone with Target immediately.”
[00:25:02] Bob: Calling Target doesn’t help very much.
[00:25:05] Beth: They’re very uncooperative.
And as for the remaining $700, Target says they can’t refund the money.
So Beth has to keep the Target gift cards.
[00:25:47] Beth: They forced me to use that money to buy a phone.
I bought; I ended up buying a phone ‘cause I have that same phone right now.
So that’s what happened.
Wow, that would really stick in my craw.
[00:26:03] Beth: Well, no, they insisted there’s no other way around it.
The other thing I found frustrating is when I called the local police, they didn’t do anything.
Hey, isn’t anybody going to really understand what happened here?
[00:26:49] Bob: That, that aloneness part, that’s terrible.
[00:26:53] Beth: But I think that’s what a victim goes through with this.
[00:26:56] Bob: Gail Roberts faced this aloneness too.
Fortunately, she was able to stop her criminal even sooner in the process.
He didn’t get away with any gift card value.
But she was left still holding the bag.
She’s very, very diligent with that regard.
He told my husband he needed to use a Google security feature which required a Google Play card.
Once that was obtained, my husband would enter the Google Play number into his PC.
The security would then be enabled, and Google would refund the monies.
He was told to buy gift cards.
That didnt make sense to me.
He was off, I couldnt catch him.
[00:29:23] Gail Roberts: They said, Just hang up.
[00:29:41] Bob: But Target says the gift cards can’t be returned.
They absolved themselves of all responsibility, and said theres nothing we can do, call Google.
And she says, Well books or play games.
And I dont even have an Android phone.
Is that what happened?
I said, “It’s your lucky day.
Do a good job and I’m going to treat you to a Google Play card.”
And he said, “Wow, thank you.”
So I’m made lemonade out of lemons.
[00:31:48] Gail Roberts: Indeed it is.
Is this a purchase?
You dont want to be interrogated by a service person, but you do want to be protected.
So therefore, why cant we return unused cards?
Why cant we get a credit?
If they want to make money, they will still be making money out of that institution.
I dont understand that.
[00:33:29] Bob: Companies should work harder to protect their consumers, Gail thinks.
[00:33:33] Gail Roberts: I would like to say that this is a new world.
And who but the company that says, you know, we have your back.
[00:34:10] Bob: Well oftentimes they don’t seem to have your back.
And one of their priorities is to keep the line moving.
Or you have to ask so, “Wow, that’s a lot of gift cards.
Who are these for?”
All of that takes a lot of time.
Trust building takes time.
It’s a lot of effort.
Well that’s next week on The Perfect Scam.
Call the AARP Fraud Watch internet Helpline at 877-908-3360.
Their trained fraud specialists can provide you with free support and guidance on what to do next.
Be sure to find us on Apple Podcasts, Spotify, or wherever you listen to podcasts.
For AARP’s The Perfect Scam, I’m Bob Sullivan.
But criminals see a tool to steal money from unsuspecting consumers in a way thats completely untraceable and irreversible.
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