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Home News

VISA Sued for Gift Card Scam

January 31, 2024
Reading Time: 3 mins read
in News
VISA Sued for Gift Card Scam

Visa is facing a lawsuit from consumers who claim the card payments network neglected to secure prepaid “Vanilla” gift cards, making them susceptible to draining by thieves. Lead plaintiff Ira Schuman, filing the proposed class action in a White Plains, New York federal court, purchased eight $500 Vanilla cards as holiday gifts for employees in 2022 and 2023, only to discover later that the cards had been emptied.

The complaint outlines that non-reloadable debit cards, sold at major retailers, come in thin cardboard sleeves that thieves can easily open, record account information, and reseal without detection.

The scam, known as “card draining,” involves thieves monitoring the Vanilla gift card website to determine when money is loaded onto the cards. Subsequently, they make purchases using the stolen account information.

Schuman argues that Visa and Vanilla card issuers were aware of the vulnerability but failed to implement security features or provide refunds for stolen funds. Visa, Incomm Financial Services, and Pathward Financial are named as defendants in the lawsuit, accusing them of violating New York state laws against deceptive and unfair consumer practices.

Reference:
  • Visa sued over ‘Vanilla’ gift card draining scam
Tags: CryptoCyber NewsCyber News 2024CybercriminalCybersecurityJanuary 2024NetworkpaymentsPhishingRansomwareVisa
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