Rep. Larry Lambert, D-Claymont.

PHOTO COURTESY OF legis.delaware.gov

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By Joseph Edelen

DOVER — A consumer protection measure to curb gift card scams in the First State received unanimous support from lawmakers May 8.

There were 6,742 fraud reports in Delaware last year, according to the Federal Trade Commission, with the median cost of losses coming in at $700 per individual.

The rise of these scams and the threat they pose to Delawareans led to Rep. Larry Lambert, D-Claymont, introducing House Bill 317 on Feb. 29, which underwent its first step in the legislative process during its hearing in the House Economic Development Committee last week.

“It’s quite significant as a matter of fact. A lot of our most vulnerable citizens are seniors who are being taken advantage of,” Rep. Lambert told lawmakers. “One of the ways that they present this fraud is they will cold call or cold email a senior and they will pose as a governmental agency… and when they do, they’re trusted, and they take advantage in the form of thousands of dollars.”

Under the legislation, stores that sell third-party gift cards would be required to display a notice where the product is sold that warns customers about prepaid card scams. The notice must also instruct individuals on what they can do if they suspect that they are a victim of such a scam.

Rep. Lambert noted that his bill would benefit older Delawareans who have fallen victim to gift card scams and other fraud schemes.

While younger people lose money to fraud more often than older individuals, the Federal Trade Commission reports that older folks tend to lose higher amounts of money.

The median monetary loss for people ages 70 through 79 is $800, according to the agency, though individuals over the age of 80 lose an average of $1,500 when falling victim to such schemes.

Sheila Grant, AARP Delaware’s associate state director of advocacy, spoke in favor of the legislation during public comment, noting that it would help educate consumers and make strides to prevent gift card fraud from occurring in the state.

“In a 2022 AARP survey, one in three adults said someone they knew had been asked to purchase a gift card to pay a bill, a fee or claim a prize ... we’re seeing an increase in this,” she said. “Con artists have latched on to gift cards as a convenient untraceable form of payment.”

Following public comment, lawmakers unanimously voted to release House Bill 317 from committee.

It now heads to the ready list for consideration on the floor of the House of Representatives, where Rep. Lambert said it will be amended with changes recommended by the Delaware Chamber of Commerce. The amendment will put the organization in support of the legislation, he said.