Think about the last time you bought a gift card for a loved one or friend. Now imagine learning the balance was gone before the card was even used. This is happening across Pennsylvania, where “card draining” scams occur when thieves record activation codes from cards on display and steal the funds as soon as it gets loaded. Federal investigators have tied many of these schemes to China-based criminal networks, including a recent Western Pennsylvania case involving drained Apple gift cards sold at Walmart stores. These incidents show how sophisticated and widespread card draining has become and why Pennsylvania needs clearer, targeted tools to address it.
 
Currently, prosecutors use general theft and access-device statutes to address these incidents, and those tools work in some circumstances. However, they do not directly cover pre-activation tampering or the recording of activation codes from cards displayed for sale. Pennsylvania also has no statewide requirement for simple point-of-sale warnings or basic employee training, even though other states have adopted these steps to help prevent scams at checkout.
 
To strengthen prevention and provide clearer standards, I will be introducing a two-bill package informed by laws enacted in more than 15 states and introduced in 10 others to combat gift card fraud. One bill creates a targeted offense for tampering with gift cards or harvesting activation data before purchase. The second bill requires retailers to post standardized fraud warnings and provide basic employee training wherever third-party gift cards are sold.
 
Taken together, these proposals will better protect consumers before they are defrauded and will set clear expectations for preventing and prosecuting these schemes.
 
I encourage my colleagues to join me in co-sponsoring this legislation.