Empty gift cards tied to Atlanta-based company. How were they drained before hitting store shelves?

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Todd Edlin says he spends more than $5,000 every year on gift cards from American Express for customers and employees of his metro Atlanta business.

“Every year I buy gift cards because I’m lazy and it’s easy,” Edlin said.

Edlin owns Allied Fence in Mableton and told Channel 2 Consumer Investigator Justin Gray he was shocked when he tried to use one of the cards himself and discovered it was empty.

“I was told that there was not enough balance on it,” Edlin said.

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He told Gray he tried several cards and each one showed little to no balance.

Daniel Rechel told Channel 2 Action News the same thing happened to him when he tried to use his Vanilla Visa and American Express gift cards.

“Boom zero-dollar balance. What? So, I’m like, oh, here we go,” Rechel said.

Both Edlin and Rechel said the gift cards came in a sealed envelope.

‘They don’t have a scratch off pin number, and they don’t come through a middleman, I thought, they come to me in an envelope directly from American Express,” Edlin said.

When he started digging, Edlin discovered the cards don’t come from the credit card company but a third-party company, InComm Payments.

In fact, Atlanta-based InComm is responsible for the gift card distribution of multiple companies including American Express, Vanilla, Visa, Apple iTunes, Google and more. Both Edlin and Rechel told Channel 2 they got nowhere with InComm customer service trying to get their money back.

Gwinnett resident Ron Lowe helps people in need through the Saint Vincent Depaul Society. Lowe told Gray he bought a $500 dollar gift card for a woman who needed to get out of an abusive situation.

“Walked out of the store and immediately handed to her and I said, just go, go your car with gas and go,” Lowe said.

But the card was deactivated before she was able to spend a dime.

Lowe said he battled the company for months because he was so concerned with what could have happened.

“Her safety was very much compromised…It’s a nightmare to get any customer support,” Lowe said.


Graham LippSmith is an attorney in California. LippSmith filed a class action lawsuit on behalf of Vanilla gift card users.

“Corporate America truly does have issues with cybercrime.

It’s an inside people, outside people,” LippSmith said.

The lawsuit alleges the gift card theft could be an inside job from a rogue InComm employee, the result of a cyber breach of InComm security, or that criminals may have cracked InComm’s algorithm for creating card numbers.

“If that’s happening thousands of times. Tens of thousands of times. Millions of times. That’s what class action lawyers are here to try to prevent from happening,” LippSmith said.

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LippSmith told Channel 2 Action News that the problem is much larger than gift cards. He said many people rely on prepaid cards to pay bills and buy groceries. According to a FDIC study, unbanked households are twice as likely to use prepaid cards.

Edlin told Gray he feels embarrassed that he may have given people worthless gifts.

“What about the people I’m giving the gift to? Are they going to tell me, Hey, you gave me a bogus gift card,” Edlin said.

Rechel echoed that sentiment, “I was too embarrassed to say to them, hey, just so you know this, there’s nothing on this.”

Both Edlin and Rechel said they are giving up on gift cards.

“Don’t buy one. Never buy. Don’t ever do it,” said Rechel.

Channel 2 Action News started asking InComm months ago to sit down and talk on camera, but they declined. They told Channel 2 in a statement:

The gift card ecosystem is more complex than consumers may realize. InComm Payments is just one part of it, serving as the program manager and processor for products such as Vanilla Gift Cards. This means we facilitate transactions between cardholders, the issuing banks and retailers.

Unfortunately, fraud is not limited to gift cards. The issue is escalating across the financial industry, and we’re constantly working alongside merchants and law enforcement to combat emerging threats. To prevent copycat behavior, we do not publicly disclose the tactics that fraudsters use, as is the industry standard.

Fraud prevention is a top priority at InComm Payments. We invest significantly in technology enhancements and new security techniques. We also review cases and consult with the industry at large to fine-tune fraud prevention strategies. Consumers can also take action in the fight against fraud by:

  • Inspecting a gift card’s packaging prior to purchase for signs of tampering, such as slits along the seams, glue residue or color distortion.

  • Reviewing the numbers on the packaging to ensure they match those on the card.

  • Only monitoring account balances and transactions on their product’s official website, which is printed on the back of their card.

  • Calling the customer care phone number on the back of their card if an issue arises.

If a customer reports an issue with a product we manage, we inform them of the information needed to conduct an investigation and the timeline required to complete it. We review every complaint on a case-by-case basis to devise an appropriate solution.