Consumer Sues Visa For 'Vanilla' Prize Card Vulnerable To Theft

Visa was sued for failing to make a "Vanilla" gift card that was vulnerable to burglary by thieves. (photo: dock. pexels)

Visa was brought to court on Tuesday, January 30, by consumers who said card payment networks failed to make "Vanilla" gift cards vulnerable to theft by thieves.

Ira Schuman, who led a class action lawsuit at the White Plains federal court, New York, said she bought eight USD 500 Vanilla cards as holiday gifts for her employees in 2022 and 2023, but later learned that the card had been vacated.

According to the complaint, the non-reloadable debit card was sold insaran, Target, Walgreens, and other grocery stores and retailers in a thin cardboard layer that could be opened by thieves and, after recording account information, it was re-sealed undetected.

The thief was then able to monitor http://www.vanillagift.com to find out when the money had been loaded, and made purchases using stolen account information, the complaint said. This scam is known as "card drainage."

Schuman, from Scarsdale, New York, said Visa and two issuers of Vanilla's card knew or should have known that their card was vulnerable to infiltration but did not add security features, and did not provide a refund when the money was stolen.

Visa and other defendants, Incomm Financial Services and Pathward Financial, did not immediately respond to requests for comment from the media.

In November, San Francisco City Prosecutor David Chiu sued Incomm, Pathward, and two other card issuers on Vanilla cards. Visa, based in San Francisco, was not named a defendant.

Tuesday's lawsuits accused the defendants of violating New York state laws on misleading and unfair consumer practices.

They seek compensation and punishment for people buying Visa-branded Vanilla cards in New York since January 30, 2021 and see their funds drained.