ORLANDO, Fla. — As we approach the holidays, gift cards are often a popular go-to item for family and friends, but Action 9 uncovered an issue where some of the cards were drained before consumers used them.
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These days it seems there’s a gift card for everything from your favorite store or restaurant to catchalls like the Vanilla Visa cards that can be used almost anywhere.
Gift card user Germania Perez said, “They’re like out on the aisle. So, you just come and pick whichever one you need, you know?”
Perez knows they’re popular to give and receive for holidays or birthdays, but she also uses them for every-day expenses and online purchases.
“People say, ‘Oh, don’t use your bank card or credit card online because some people are like scamming your information,’” she said.
But it turns out there is no shortage of reports about scammers going after gift cards, too. Action 9 found, InComm Financial Services, the company behind Vanilla Gift Cards and many other types of gift cards, has more than 1,300 complaints with the Better Business Bureau over the past year. Many of the complaints are for cards not working or emptied before the consumer could even use them.
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Perez claims the $100 Vanilla Gift Card she bought last year had just one penny on it. The company let her know the rest was spent on PlayStation gaming.
Perez told Action 9 Consumer Investigator Jeff Deal, “I was like, ‘Ma’am, I don’t even own a PlayStation.’ So, yeah, I was angry.”
But her attempts to get the money back from InComm have been unsuccessful and she’s demanding answers. Attorney Graham Lippsmith is, too.
“We’re trying to get people the value of the gift cards that they had received. And that at the end of the day is our goal,” Lippsmith said.
He’s filed a Class Action lawsuit against InComm alleging the company has allowed this to happen because of “sub-standard security practices” and that it intentionally erected “barriers through difficult and time-consuming customer service processes” to prevent people from getting their money back.
Lippsmith believes many of the victims are lower income who may not be able to get a bank debit card or credit card to pay essential bills or make online purchases.
Even though Germania complained about it last year, it was only after Action 9 inquired about it in October that she received a denial letter, telling her “these transactions are out of timeframe for recovery.”
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InComm wouldn’t comment on the lawsuit but sent a statement that reads in part: “If one of our customers reports an issue, we inform them of the information needed to conduct an investigation and the timeline required to complete it. We then review complaints on a case-by-case basis to devise an appropriate solution. Without receiving the necessary information in the provided timeline, our evaluations are limited to what evidence is available.”
Perez, a single mother living in an extended-stay motel, believes the process is just another excuse for the company to not pay out consumers like her.
Perez said, “It wasn’t $10, $5, you know? And no lie, I was heartbroken. I really really needed the money.”
The lawsuit alleges it’s likely not just cases of people tampering with the cards at the store, but could be InComm employees stealing information or bad actors figuring out the algorithm used to make the cards. InComm wouldn’t say how it’s happening, but Perez told Action 9 her card didn’t appear as though it had been tampered with.
Statement from InComm Payments:
InComm Payments takes concerns from cardholders very seriously. If one of our customers reports an issue, we inform them of the information needed to conduct an investigation and the timeline required to complete it. We then review complaints on a case-by-case basis to devise an appropriate solution. Without receiving the necessary information in the provided timeline, our evaluations are limited to what evidence is available.
Privacy regulations as well as our policy restrictions prevent us from commenting on individual consumer situations, but we can confirm that we contacted Ms. Perez to explain the status of her case. Fraud prevention is a top priority across our company. We are constantly working to ensure consumers can safely use their gift cards by developing new methods and techniques that mitigate the risk of potential fraud.
We do not disclose the tactics that fraudsters use in order to prevent copycat behavior. However, we can share that our dedicated fraud teams are constantly monitoring for new and emerging threats. We also review cases and consult with our merchant partners to fine-tune fraud prevention strategies.
If consumers have concerns about how to protect their gift cards, there are steps they can take to maintain vigilance against fraudulent activity, including:
Inspecting a gift card’s packaging prior to purchase for signs of tampering, such as slits along the seams, glue residue or color distortion.
Regularly monitoring for transactions by reviewing the account balance 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 immediately to report an issue.
To find out more information about their card, consumers should visit their product’s official website by typing in the URL as it is printed on the back