Vanilla lawsuit overview:
- Who: Vanilla is facing a lawsuit from the city of San Francisco over its lack of security in the way it mails cards to customers.
- Why: Vanilla uses insecure packaging that leads to rampant card draining and fraudulent transactions, the San Francisco city attorney says.
- Where: The Vanilla gift card lawsuit was filed in San Francisco Superior Court.
Vanilla gift cards is facing a lawsuit claiming that its use of insecure cardboard packaging while mailing cards has led to rampant card draining and fraudulent transactions.
Parent company Incomm has known about the card security issues for a decade but has not fixed the issue nor has it provided customers with refunds for the fraudulent transactions as the company is required to do.
“Incomm’s negligence has opened the door for scammers to defraud thousands of consumers,” San Francisco City Attorney David Chiu said in a statement. “To add insult to injury, Incomm regularly refuses, in violation of state law, to refund consumers who are scammed out of their money as a result of Vanilla gift card draining.”
Vanilla gift cards are non-reloadable debit cards that are available at grocery stores and retailers throughout the country.
Scammers are obtaining the Vanilla card number from beneath its cardboard packaging, resealing the card and then spending the balance as soon as the card is activated but before the consumer can use the card, the San Francisco lawsuit says.
The issue has been reported for at least a decade and Incomm has been aware of those issues but Incomm has not adjusted the packaging.
Vanilla refuses to issue refunds, places customers on long holds and denies fraudulent use, lawsuit says
Consumer laws require companies to refund unauthorized transactions, the gift card lawsuit says.
Consumers say that Vanilla either never responds to reports of theft, places customers on hold for hours or that the company refuses to issue a refund while claiming an investigation shows that the gift card was physically present for the transaction even though it was purchased hundreds of miles away right before the transaction, the Vanilla lawsuit says.
Apple agreed to a $1.8 million settlement in November to resolve claims that it misrepresented the security and value of its gift cards that were later redeemed by unauthorized third parties.
Have you ever used a Vanilla gift card? Let us know in the comments.
The plaintiff is represented by San Francisco City Attorney David Chiu.
The Vanilla lawsuit is People of the State of California v. Incomm Financial Services, Inc. et al., Case No. CGC-23-610333, in the San Francisco Superior Court.
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14 thoughts onSan Francisco city attorney files lawsuit against Vanilla gift card maker
I have used Vanilla cards before, had issues getting the money out/using it at some retailers.
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