How the Sugar Baby Scam Works
The scammer, posing as a mature man, sends a Direct Message (DM) on Instagram to potential victims. If the message is accepted, the scammer starts interacting with the victim until he gains her trust and claims he is rich. Once the potential victim's trust is gained, the scammer begins to her obtain financial status. The scammer then tells the potential victim that he can pay off her debt and request her banking details for the money transfer, and then make a transfer through a fraudulent account.
Once the fraudulent money transfer is done, the scammer asks the potential victim to buy them gift cards on various platforms, like Google Play Store and iTunes in return for the favor he just did. Since the potential victim is so happy this stranger(Sugar Baby) just paid off her debt, sending him a few gift cards worth far less than the money he transferred to her account, is like nothing, so she quickly sends the gift cards without thinking.
After a few days, the victim will realize that she was scammed by a fake Sugar Daddy. This is because, after draining the gift cards, the scammer disappears without a trace and the bank will detect that the money that was transferred by the Sugar Daddy was paid with a fraudulent account, so the transactions get canceled. This will remove any trace of the deposits in her account. Now, she is left with her original debt and the expense of the gift cards she sent to her fake Sugar Daddy.
How to Know if You are Being scammed
If a stranger asks you to send them gift cards as a payment, donation, or as favour, this is a red flag that someone is attempting to scam. This is how most online scammers collect money from their victims.