Michigan legislators enhance Organized Retail Crime Act to combat gift card fraud

Gift card fraud is escalating into a significant threat, prompting Michigan lawmakers to take decisive action. During a recent government meeting, representatives highlighted the alarming rise in scams involving gift cards, which have become a favored target for criminals. These fraudsters are stealing inactive gift cards, tampering with them, and then placing them back on store shelves. Unsuspecting consumers purchase these cards, load them with money, and later discover their funds have been drained.

To combat this growing issue, lawmakers are proposing amendments to the Organized Retail Crime Act. These changes aim to broaden penalties for those who knowingly engage in gift card fraud, including tampering with cards or acquiring them through deceitful means. Representative Harris emphasized the need for stronger laws to deter these crimes and provide law enforcement with the tools necessary to prosecute offenders effectively.

The urgency of this legislation is underscored by alarming statistics. The Federal Trade Commission reported that Americans lost $217 million to gift card scams in 2023 alone, with an additional $100 million reported by mid-2024. Lawmakers are particularly concerned about vulnerable populations, such as seniors, who are often targeted by these scams.

In response to the rising threat, the Department of Homeland Security launched Project Red Hook, which has already led to the arrest of over 150 individuals involved in gift card tampering since its inception in January 2024. This initiative aims to raise awareness and develop strategies to prevent such fraud.

As the meeting concluded, lawmakers expressed their commitment to enhancing consumer protections and reducing losses for retailers, ultimately benefiting Michigan families. The proposed legislation is expected to empower law enforcement and provide clearer statutes to tackle organized fraud rings effectively.