Visa was sued by consumers on Tuesday, alleging its card payment network failed to reduce the likelihood that prepaid “vanilla” gift cards would end up in the hands of thieves.
Ira Schuman, who is leading a proposed class action lawsuit in federal court in White Plains, New York, said she purchased eight $500 vanilla cards as holiday gifts for employees in 2022 and 2023, but the cards were empty. He said he later found out that it had become.
According to the complaint, the non-reloadable debit cards are sold in thin cardboard sleeves at CVS, Target, Walgreens and other grocery stores and retailers, and thieves open them and After recording account information, it can be resealed without detection.
Thieves will be able to monitor http://www.vanillagift.com According to the complaint, the fraudsters wanted to know when the money was deposited and use the stolen account information to make purchases.
This scam is known as “card drain.”
Mr. Schuman, of Scarsdale, New York, said Visa and the two vanilla card issuers knew or should have known that their cards were susceptible to tampering, but did not add security features. He also said he has not refunded the money if it was stolen.
Visa and the other defendants, Incom Financial Services and Password Financial, did not respond to requests for comment.
November, San Francisco City Attorney David Chiu sued Two card issuers: Incomm, Pathward, and Vanilla Cards. San Francisco-based Visa is not named as a defendant.
In Tuesday’s lawsuit, the defendants are accused of violating New York state law against deceptive and unfair consumer practices.
It seeks compensatory and punitive damages for people who purchased Visa-branded vanilla cards in New York after January 30, 2021, and whose funds were depleted.
The case is Schumann v. Visa USA Inc. et al., United States District Court for the Southern District of New York, No. 24-00666.
