Consumer Alert: Holiday gift cards this season may have a zero balance

JACKSONVILLE, Fla. — The gift card you give this holiday may be full of good intentions, but it may hold no monetary value. Someone may have swiped the money the moment the card was activated.

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“I’m embarrassed, said Todd Edlin. He is not feeling the holiday spirit despite the $5,000 in American Express gift cards he’s given out this year. He said all of the gift cards he gave out were empty or left with just a few cents.

“I was shocked when I went to try to use one myself, and I was told that there was not enough balance on it,” Edline said, “So, I tried a second and a third one.”

Daniel Rechell had the same thing happen to him twice. Once with an AmEx gift card and once with a Vanilla card. “It’s a sealed envelope. Boom zero-dollar balance. What? So, I’m like, oh, here we go.” The card might say Vanilla, Visa, iTunes, or American Express. But regardless of what name brand is on the gift card, the vast majority of them actually come from one company in Atlanta. It’s called InComm.

Even though you don’t see the name InComm anywhere on the packaging, that’s who handles the processing of the cards and the customer service. Action News Jax found Daniel and Todd are not alone. Hundreds, possibly thousands of other people say they are in the same boat Daniel said, “If you google InComm just look at all the complaints online. Everybody has the same complaints.”

Many of those complaints are now part of a court case. Attorney Graham Lippsmith filed this class action lawsuit against InComm on behalf of Vanilla gift card users.

Lippsmith said, “That’s happening thousands of times, tens of thousands of times, millions of times.” He said every time the user gets the card, still sealed and unopened, it’s seemingly drained of its balance.

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The lawsuit alleges the gift card theft could have been an inside job from rogue InComm employees, the result of a cyber breach of InComm security, or that criminals may have cracked InComm’s algorithm for creating card numbers. “When you have the electronic technology that cybercriminals have access to, they can do this on a scale that I think you can’t even imagine,” said Lippsmith.

The lawsuit aims to make his clients whole by repaying them the amount they were supposed to have in the first place.

Ron Lowe had the same thing happen to him. He notified the Department of Consumer Affairs about InComm after his charity organization tried to use a $500 gift card to get a domestic abuse victim out of town.

So, he contacted the company. “She said, ‘It’s been deactivated because of fraudulent activity’. I said, ‘There could have been no fraudulent activity. I bought that card, walked out of the store to the parking lot, handed it to this lady, and she tried to use it.” Lowe works for the St. Vincent de Paul Society and regularly hands out gift cards to people in need. He said it goes beyond bad gifts. For some, it’s the theft of critical funds. “She didn’t put 10 cents worth of gas in her car, and she had to call me and say, ‘It doesn’t work’, he added, “Her safety was very much compromised.”

InComm has moved to dismiss the class action lawsuit against it. We reached out to the company, but they refused to comment on pending litigation.

InComm wrote in a statement: 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.

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