A company that provides gift cards is being sued for not taking steps to protect their prepaid cards from a common scam.
Last month, San Francisco City Attorney David Chiu filed a lawsuit claiming that Incom’s non-reloadable cards, known as “Vanilla Gift” and “One Vanilla”, had inadequate packaging and weak security measures which left them vulnerable to fraudulent activities.
The complaint states that the packaging of the gift card allows for simple retrieval of the card inside, making it possible for thieves to capture the barcode and PIN details. This allows them to perform unauthorized transactions, which is commonly referred to as card draining.
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According to the complaint, victims who reported having their money stolen were not reimbursed or given refunds by Incomm and its partners.
How to prevent card draining and what it means.
According to Consumer Reports, card draining is a fraudulent act where scammers deliberately remove a gift card from its packaging without purchasing it, take note of its number and PIN, and then reseal the packaging to make it appear untouched.
When someone buys a tampered card and adds money to it without knowing, the thief will take the stolen details and use them to buy things without permission, taking all the prepaid money from the gift card.
According to Pennsylvania Attorney General Michelle Henry, there are multiple ways for consumers to safeguard themselves from being deceived by compromised gift cards, even though they may be difficult to detect.
According to Henry’s consumer notice, shoppers should carefully check the packaging of a gift card for any signs of damage and make sure that the scratch-off covering the PIN number is still intact before making a purchase.
According to Henry, if a consumer finds out that a card they purchased has been compromised, they should promptly notify the card company and request a refund.