A pensioner picked up his phone and heard a recorded message that said he was entitled to thousands in extra Centrelink payments.
Richard, 74, called back and spoke to a friendly man who said he could get the extra $2400 in benefits if he paid a "refundable" fee, using $400 worth of iTunes gift cards.
So Richard, who asked that his surname not be used, went to his local supermarket and bought the cards then read the serial numbers over the phone to the same man.
A few days later the man told Richard he needed to buy an extra $300 worth of cards to pay for the cheque to be processed by Centrelink.
"I was due in hospital for an operation that month, so I was slightly discombobulated," Richard said.
It was only when Richard arrived at his local Centrelink office to collect the cheque that he realised he'd been swindled out of $700.Richard
The con-artist's calls from a Canberra number, his knowledge of some of Richard's details, and the initial recorded call made things seem legitimate.
"I burst into tears. It's quite unbelievable, it's just absolutely humiliating," Richard said from his home in regional Victoria. He is speaking out and hopes his experience will ensure people in the Mid Coast area will not become victims of the scam.
The Australian Consumer and Competition Commission says 1236 Australians have lost almost $540,000 in the "gift card as payment" scam this year. The watchdog says it's an increasing trend, with $480,000 in losses in 2015-16.
The scammers ask their victims to buy the cards and pass on the serial number, claiming that's how the cards are activated.
But those details actually allow the scammers to sell the card and pocket the money.
Methods reported to the consumer watchdog's Scamwatch program also include con-artists pretending to be from the tax office, chasing fines.
Some have posed as Telstra employees, contacting people out of the blue to say hackers are trying to access their devices and the iTunes cards will be used as a "trap" to stop the breach.
Some victims have been tricked into buying thousands of dollars worth of gift cards, including a woman who thought she was paying for her broadband connection.
If someone asks you to pay for anything using an iTunes gift card, it is a scam. There are never any circumstances where a legitimate business or government department will ask for payment this way," ACCC deputy chair Delia Rickard said in a statement.ACCC deputy chair Delia Rickard
"If you pay for a scammer's con with iTunes gift cards it's nearly impossible to get your money back. Don't ever believe the scammer's lies, no matter how convincing they sound – hang up on their calls and delete their emails immediately."
Richard says he's warned many in his community about the scam.
"It's so wrong. I've gone through the agony, but hopefully it saves someone else."
This story first appeared on the Sydney Morning Herald.