Maker of popular gift cards sued over alleged ‘card draining’ scam risk
December 20, 2023 – Published on CNN
A Georgia-based company that makes many popular gift cards faces a lawsuit in California alleging it failed to take precautions to prevent scammers from draining gift cards of their value – a scam that experts say is common.
The lawsuit alleges InComm and its partners have “known for years that its nonreloadable Vanilla debit card’s lax security features (have led) to numerous card-draining incidents,” but have “not sufficiently improved the cards’ packaging or implemented other changes to prevent those losses.
Gift card buyers and users need to be especially vigilant about this type of scam, said Christopher Peltz, cyber security expert with GuidePoint Security. “So far, card draining is the most prevalent scam this holiday season,” he said.
“Card draining” is particularly nefarious and has become the go-to scam of the moment for thieves because of the prevalence of gift cards and the fact that consumers are loading gift cards with more value than ever, said Peltz.
Thieves target preloaded gift cards more than credit or debit cards because gift cards generally are less protected with multiple security and fraud protection measures, he added.
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