Atlanta-based company being sued following Channel 2 investigation into empty gift cards

ATLANTA — The city attorney of San Francisco is suing an Atlanta-based gift card company that was the focus of a Channel 2 Action News investigation.

InComm Payments is the company behind many of the gift cards for sale on store shelves under names like Vanilla and American Express.

“What we understand is it’s a mere penny on the dollar for them to provide a little additional security,” San Francisco City Attorney David Chiu said.

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Chiu told Channel 2 consumer investigator Justin Gray he filed the lawsuit against InComm to get restitution for gift card customers whose cards were drained by criminals.

The lawsuit alleges InComm knowingly packages the cards in a way that criminals can easily tamper, stating: “As the direct result of InComm’s years-long negligence, numerous consumers and gift recipients have been needlessly subjected to card draining.”


“We know that InComm financial services has been aware for years that their inadequate packaging and their lack of security has allowed criminals to steal money from unsuspecting consumers,” Chiu told Gray.

In a Channel 2 Action News investigation in November, we told you about InComm gift card customers whose cards were somehow tampered with before they ever touched them.

Todd Edlin told us how he buys thousands of dollars of American Express gift cards each year for customers and employees at his fencing business.

But when he pulled some of the cards out of a desk drawer earlier this year, he found several were all empty.

He called us again last week after finally getting his money back. He was sent more than $1,400 by InComm. But he started his fight for a refund, all the way back in March.

“The microphone of WSB has a very broad reach. I was contacted by a friend who runs a much larger company than mine in Chicago, and he had the same issue. He contacted a high-ranking American Express official,” Edlin said.

That intervention from the American Express executive is why Edlin believes he finally got his money back 9 months later.

That is what the second part of the lawsuit focuses on. It alleges difficulties for customers getting refunds.


The lawsuit claims InComm, “Simply never responds to many Vanilla cardholders who wait for hours on hold, complete Incomm’s transaction dispute form, and supply all required information and documents. For those who do hear back, Incomm denies refunds on unlawful and implausible grounds.”

Edlin said he experienced that difficulty firsthand with his months-long effort to get a refund from InComm for his empty American Express cards.

“I had multiple phone calls, on hold many times, passed from one office to another asking to speak to a supervisor and never getting anywhere,” Edlin said.

Edlin said he donated $500 of the refund he received from InComm to Clark’s Christmas Kids as a thank you to WSB-TV for reporting on this issue.

Gray did reach out to InComm, which provided the following statement:

“Nobody is more committed to protecting consumers from prepaid gift card fraud than our team at InComm Payments. That is why, for years, InComm Payments has maintained an unwavering commitment to industry-leading security practices, including secure card packaging. We continually collaborate with security experts, merchant partners, federal agencies, and law enforcement to combat emerging threats and support industrywide solutions. Thanks to these efforts, only a tiny fraction of our prepaid cards are affected by fraud. We won’t stop until we get that number to zero.

“We categorically deny the baseless allegations made in the San Francisco complaint. The unfortunate reality is that the retail landscape has seen increasingly sophisticated fraud activity in recent years, and InComm Payments, as the industry leader for many prepaid products, has inevitably been affected. We have seen zero information – in the San Francisco complaint or elsewhere – indicating that other packaging techniques are more secure than ours or result in less fraud.

“In the meantime, our higher priority is to support our consumers who have been affected by this issue. We urge any consumer who believes they have been victimized by fraud to call the customer care number on the back of their card right away, and customers can now make more inquiries online, including checking the status of a case they have initiated with our customer care team. In addition, we urge consumers to keep these tips in mind, to reduce the risk of fraud and enable us to promptly assist in the unlikely event of fraud:

  • Carefully inspect the card packaging before purchase for any potential sign of tampering, no matter how small.
  • When purchasing a gift card, retain or take a photo of the receipt. If you give the card away as a gift, include the receipt or photo of the receipt as well.
  • If you receive a card as a gift, open the package immediately and inspect the card. If any part of the card number, expiration date or security code is missing or appears altered, contact our customer care team immediately.
  • Visit the website listed on your card to check your card balance and review your transaction history. If you see a transaction you don’t recognize, contact our customer care team immediately.
  • Do not provide your card information via text or email.
  • Write down your card information and store it in a secure place.