FTC Fights False Promises of “Free” Gift Cards

by Debra N. Diener J.D. CIPP G

Man with debit or credit card

We all know the adage “if it’s too good to be true, it probably is”.  The “free” gift card scams fall right into that category.  These scams aren’t new but just keep appearing in slightly different variations.

The Federal Trade Commission (FTC) is very serious about fighting scams aimed at consumers. So it was no surprise, but was most welcome news, to read that the FTC has just filed 8 different complaints against 29 defendants in U.S. District Courts around the country . These defendants are alleged to have engaged in multiple “free” gift card online scams (see, “FTC Cracks Down on Senders of Spam Text Messages Promoting “Free” Gift Cards”; http://www.ftc.gov).

How did this scam work?  The  defendant-senders allegedly sent outmore than 180 million unwanted and unrequested spam text messages to consumers.  The spam messages tried to steer consumers to deceptive websites that contained the false promise of “free” gift cards.  As with other similar “free” gift card scams, the promise was that the cards were for such major retailers as Target, Wal-Mart and Best Buy.

Consumers who clicked on the links were sent to other pages where they were instructed about the prerequisite steps before they could get the “free” gift card. Some of the links required consumers to provide sensitive personal information including health information; some instructed consumers to apply for credit; and others instructed consumers to subscribe to services.  Some of the sites required home addresses so the “free” gift card could be shipped to the consumer.

So what did anyone get from providing any or all of this personal information or opening new lines of credit?  Their personal information was sold to 3rd parties for marketing purposes.

There’s no guarantee, of course, that the FTC’s complaints will stop all of the “free” gift scams.  But these are important and robust actions that send the right message.


Ms. Diener is now an independent consultant on privacy, identity management, information protection and risk management. She served in senior managerial, legal, policy and legislative positions in all three branches of the Federal government. In addition to her privacy expertise, Ms. Diener played a lead role on such important domestic and international issues as criminal justice/law enforcement and financial services. She speaks frequently at industry and governmental conferences and meetings.