Visa was sued Tuesday by consumers who said the card payments network failed to reduce the likelihood of prepaid “vanilla” gift cards being stolen by thieves.

Ira Schuman, who leads the proposed class action lawsuit in federal court in White Plains, New York, said he purchased eight $500 vanilla cards as holiday gifts for employees in 2022 and 2023, but later I learned that the card had been cleared.

Non-reloadable debit cards sold at CVS, Target, Walgreens and other grocery stores and retailers come in thin cardboard sleeves that allow thieves to open the cards and reseal them without being detected after recording account information, the complaint said.

The complaint alleges that thieves could monitor to see when money was being deposited and use the stolen account information to make purchases. This scam is called “card depletion.”

Shuman, of Scarsdale, N.Y., said Visa and the two Vanilla card issuers knew or should have known that their cards were easily tampered with, but did not add security features and did not provide refunds when funds were stolen.

Visa and fellow defendants Incomm Financial Services and Pathward Financial did not immediately respond to requests for comment.

In November, San Francisco City Attorney David Chiu sued Incomm, Pathward and two card issuers over the Vanilla card. San Francisco-based Visa is not named as a defendant.

Tuesday’s lawsuit accuses the defendants of violating New York state laws against deceptive and unfair consumer practices.

It seeks compensatory and punitive damages for people who purchased Visa-branded Vanilla cards in New York since January 30, 2021, resulting in their funds being depleted.

The case is “Schuman v. Visa USA Inc et al.”, U.S. District Court for the Southern District of New York, No. 24-00666.

(This story has not been edited by News18 staff and is published from a Yonhap news agency feed – Reuters)