As we enter the holiday season, I wanted to let you know about a consumer protection lawsuit my office just filed against the makers of Vanilla gift cards, which are readily available at many retail stores.
Due to packaging design flaws and lax security, a Vanilla gift card is susceptible to “card draining,” when a scammer opens the packaging, photographs the card number, returns the card to its original package, and makes fraudulent purchases once the card is activated, but before a consumer is able to use it.
Despite knowing about this design flaw and ignoring hundreds of customer complaints over many years, Incomm Financial Services, which makes and sells Vanilla gift cards, has refused to address this security issue or refund many consumers after card draining, as required by law.
My office is seeking restitution for impacted customers, penalties, and security changes to prevent future fraud.
This holiday season, Californians deserve the peace of mind that they won’t be the victim of a scam when they buy gift cards for their loved ones.
Michael Finney, with ABC 7 On Your Side, has more details.