SF residents warned about Vanilla gift card scam amid holiday shopping season
SAN FRANCISCO (KRON) — With the holiday shopping season in full swing, shoppers are also more vulnerable to scams. San Francisco residents are being warned about Vanilla gift card scams.
SF City Attorney David Chiu announced in a press release he filed a lawsuit against the maker of Vanilla gift cards because of it is “insecure cardboard packaging” that leaves the cards susceptible to being tampered with.
Chiu warns residents about “card draining,” which is when a scammer takes a gift card off the shelf, tampers with the card and records the card’s information. The scammer then places it back onto the shelf. A victim customer then legitimately purchases the gift card and loads money into it. The scammer then tracks when the card has been activated and uses the value of the card for themselves.
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Vanilla gift cards can be used at any establishment that accepts Visa and/or Mastercard. United States consumers load more than half a trillion dollars per year into prepaid debit and gift cards, according to the press release.
KRON4’s Stephanie Lin spoke with Chiu about the consumer warning. Watch the full interview in the video player above.
Tips On How To Avoid Gift Card Scams
According to Better Business Bureau’s ScamTracker, some websites claiming to check your gift card balance are a way to steal money off your card. These websites ask for your gift card’s ID number and PIN or security code.
The U.S. Federal Trade Commission (FTC) has a list of tips on how to avoid scams when using gift cards. The agency recommends inspecting the card before buying it and making sure no protective stickers or scratch-off codes have been tampered with.
Chiu filed a lawsuit against parent company Incomm Financial Services, Inc. and its partner banks (TBBK Card Services, Inc., Sutton Bank, and Pathward N.A.). The lawsuit, People of the State of California v. Incomm Financial Services, Inc. et al, was filed in November.
Incomm’s negligence has opened the door for scammers to defraud thousands of consumers. 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. For over a decade, the company has ignored hundreds of consumer complaints calling for security improvements and refunds for fraudulent charges. As we kick off the holiday season, we are filing this lawsuit to sound the alarm, compel Incomm to adopt industry-standard security features to stop card draining, and obtain restitution for consumers who have been harmed.
SF City Attorney David Chiu
The full lawsuit filed by Chiu can be viewed below.
Lawsuit_filed__by_David_ChiuDownload
WFLA’s Shannon Behnken contributed to this report.
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