Call for retailers to do more to stem iTunes scam losses by seniors

Consumer Protection is urging retailers of iTunes gift cards to do more to enforce limits on sales to scam victims, who are mostly elderly, and to erect warning signs at the point of sale.

The call comes after a report of yet another huge loss by a Bunbury couple in their 70’s who last week reported purchasing $23,900 in iTunes cards after receiving a call from scammers claiming to be from Telstra, then giving them access to their computer and bank accounts.

The couple was asked to assist in catching a scammer by purchasing the iTunes cards over two days. On the first day, they visited four different stores in Bunbury where no limits were enforced at the till and they were able to purchase a total of $9,100 in cards.

The next day, the scammers sent the couple to purchase a further $14,800 in cards and they visited three stores in Eaton, as well as another store in Bunbury. At one store in Eaton, staff put through transactions on four different tills to avoid the limit.

Following consultation with some major supermarkets, the stores agreed to set a limit on iTunes purchases of $1,000 or $500 per transaction. However, officers from Consumer Protection recently carried out a ‘mystery shopper’ exercise at four Perth stores which found the limits were only enforced at one of the stores visited. At the other three stores, staff and their supervisors either carried out multiple transactions at the checkout or the officers were taken to a till that did not impose the limits.

Commissioner for Consumer Protection David Hillyard said such actions by staff and their supervisors circumvent attempts to curb losses that the community clearly recognise and is supported by their employers.

“It’s disappointing that the limits agreed to at the corporate level and incorporated into the checkout system are not being effective at the store level,” Mr Hillyard said.

“Retailers need to better inform their store staff as to the reasons for the limits and give strict instructions not to over-ride the limits that have been put in place. Scam payments by iTunes cards doubled last year to $120,000 and we fear the increasing trend will continue this year.

“Reports from scam victims and the results of our short mystery shopper exercise also show that signage either at the point of sale or the checkout is ‘hit and miss’, with most stores not having any warning signs at all.

“A 75 year old man from Kelmscott recently told us the story of how he avoided losing $4,000 when he saw a scam warning sign in Big W which prompted him to think about what he was doing and call his family for advice. So this shows they can be very effective.

“A previous campaign to erect signage at Western Union agencies was highly successful in reducing scam losses via this medium, so we are hoping the same can be achieved with the sellers of iTunes gift cards.

“We will continue to work with the retailers in the hope that a more effective effort is put in place to alert potential scam victims of the scam and hopefully prevent any further losses.

“I also draw everyone’s attention to the US law enforcement actions against Western Union.  If these principles are ignored by retailers and providers of these alternate purchasing arrangements there are likely to be dire consequences in the long term.”

Information and advice on scams is available on the WA ScamNet website Enquiries can be made to Consumer Protection by email or by calling 1300 30 40 54.