Visa was sued Tuesday by consumers who say the card payment chain failed to make prepaid “Vanilla” gift cards less likely to be spent by thieves.
Ira Schuman, who is leading the proposed class action in White Plains, New York, federal court, said he bought eight $500 Vanilla cards as holiday gifts for his employees in 2022 and 2023, only to find out later that the cards had been emptied.
According to the complaint, non-reloadable debit cards are sold at CVS, Target, Walgreens and other grocers and retailers in thin cardboard sleeves that thieves can open and, after recording account information, reseal undetected.
Thieves can then monitor http://www.vanillagift.com to see when money has been loaded, and make purchases using the stolen account information, the complaint said.
The scam is known as “card withdrawal”.
Visa was sued Tuesday over gift card fraud. Asian Grace
Schuman, of Scarsdale, New York, said Visa and the two Vanilla card issuers knew or should have known that their cards were vulnerable to tampering but did not add security features, and did not provide refunds when money was stolen.
Visa and the other defendants, Incomm Financial Services and Pathward Financial, did not immediately respond to requests for comment.
In November, San Francisco City Attorney David Chiu sued Incomm, Pathward and two card issuers over the Vanilla card. Visa, based in San Francisco, was not named as a defendant.
Tuesday’s lawsuit accuses the defendants of violating New York state laws against deceptive and unfair consumer practices.
The scam involves gift cards being emptied before they are redeemed. Getty Images
It is seeking compensatory and punitive damages for people who bought Visa-branded Vanilla cards in New York since January 30, 2021 and saw their funds depleted.
The case is Schuman v Visa USA Inc et al, US District Court, Southern District of New York, No. 24-00666.
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Source: thtrangdai.edu.vn/en/
