AARP, a non-profit organisation group for older Americans, has launched a three-year initiative to raise awareness on gift card scams.
The move comes after AARP Fraud Watch Network released a report on the prevalence of gift card scams.
The report found that nearly one in ten people fell victim to scams where gift card is used for making payments.
In such frauds, the criminals convince people to buy a gift card for paying bills or some other financial obligation.
Scammers also lure adults to purchase gift cards to pay upfront for a service or product, or settle an issue with their Social Security account among others.
AARP fraud prevention programmes director Kathy Stokes said: “With the number of reported scams on the rise, criminals are increasingly turning to gift cards as an untraceable way to take money as a part of their schemes.
“Unfortunately, once a person gives a criminal the gift card number and PIN, the money is virtually impossible to recover. Our three-year initiative will let consumers know that it is never legitimate when someone asks you to pay for some obligation with a gift card.”
The report also found that most respondents acquiesced to purchase gift cards bought them at retail and pharmacy chains.
Notably, gift cards now tops the list of reported fraud payment methods, CNBC reported citing Federal Trade Commission.
Stokes added: “There are no two ways about it, asking to be paid by gift card is a scam 100 percent of the time.
“Yet, nearly a quarter of US adults don’t know or are unsure whether or not payment by gift card equals a scam.”