The was a 50% increase in reported gift card swindles in a 2023 report from the Better Business Bureau.
Schuman, a resident of Scarsdale, New York, initiated the proposed class action after discovering that the eight $500 Vanilla cards he purchased as holiday gifts for his employees in 2022 and 2023 had been emptied.
The complaint highlights that these non-reloadable debit cards, commonly sold at major retailers like CVS, Target, and Walgreens, are packaged in thin cardboard sleeves that thieves can easily open, record account information, and reseal without detection.
According to the lawsuit, the perpetrators then monitor the official Vanilla website (http://www.vanillagift.com) to track when money is loaded onto the compromised cards.
Subsequently, they use the stolen account information to make unauthorized purchases.
Liability Issues
Schuman argues that Visa, Incomm Financial Services, and Pathward Financial were aware or should have been aware of the cards’ vulnerability to tampering but did not implement necessary security features.
