InComm Financial Services, the company behind the widely sold Vanilla prepaid gift cards, has agreed to create a restitution fund for California consumers who lost money to card-draining scams, resolving a lawsuit brought by San Francisco. Eligible residents now have until February 19, 2027, to file claims, with payments expected to go out around June 19, 2027.
The settlement stems from a 2023 lawsuit filed by San Francisco City Attorney David Chiu's office against InComm, according to SFGATE. The suit alleged that InComm failed to prevent its cards from being accessed before purchase and used for unauthorized charges, and that the company did not always refund money that had been siphoned from card balances without the cardholder's knowledge. Vanilla gift cards are prepaid cards licensed by major credit card companies including Mastercard and Visa, and the cards at the center of the dispute were sold between November 2019 and October 2024, per SFGATE's reporting.
As part of the deal, InComm has not admitted any wrongdoing, SFGATE reports. A separate account of the settlement, reported by PRNewswire, likewise states that InComm denies the allegations.
How the Scam Allegedly Worked
At the heart of the city's case was the design of the cards themselves. The lawsuit alleged that the “insecure cardboard packaging” of Vanilla gift cards left them susceptible to tampering, according to KQED. That vulnerability, the city argued, allowed scammers to drain some or all of a card's funds before a consumer ever got the chance to use it. The nonprofit government watchdog SF.gov adds that Chiu's office also alleged InComm regularly refused to refund consumers hit by this kind of draining.
The problem isn't unique to San Francisco's case. Consumers separately sued Visa in January 2024, alleging the payments network failed to make prepaid Vanilla gift cards less vulnerable to being drained by thieves, according to Reuters. Gift cards generally remain the most common payment method reported by consumers who lose money to scammers, per a Federal Trade Commission data analysis.
How Much Money Is Actually Available
Reports differ slightly on the size of the fund. KQED reports that over $1.5 million in funds will be made available to Californians, while PRNewswire states the total Restitution Fund is $1,525,000. Either way, the money is earmarked for consumers who purchased or received a non-reloadable Vanilla Prepaid Gift Card in California between November 1, 2019, and September 30, 2024, and who lost some or all of its value to unauthorized transactions without getting a refund from InComm, per the same reporting.
How much an individual claimant can recover depends on the paperwork they can produce. A claimant who submits a complete Proof of Claim — including a purchase receipt, photos of the card's front and back, transaction history showing the unauthorized charges, and documentation of any prior refund request to InComm — may be eligible for the full value of their reported losses. Claimants who submit an incomplete Proof of Claim may be eligible for up to 75% of their reported losses; those who submit no Proof of Claim may receive up to $15 per card, capped at two cards and a maximum payout of $30, according to PRNewswire.
How to File a Claim
Eligible Californians must submit their Claim Form and Attestation by February 19, 2027, with payments slated to go out around June 19, 2027, KQED reports. Those looking to check eligibility or file a claim can find information at cagiftcardsettlement.com, call 1-888-808-2479, or email [email protected], according to SFGATE.
