A U.S. judge has dismissed a proposed class action lawsuit against Visa over claims that its Vanilla prepaid gift cards were vulnerable to theft and lacked proper warnings.
The decision came on Monday from U.S. District Judge Gregory Woods in Manhattan.
The case was brought by Ira Schuman of Scarsdale, New York, who said eight $500 Vanilla cards he bought in 2022 and 2023 for employee gifts were emptied by thieves. Schuman claimed the non-reloadable cards, sold at stores such as CVS, Target, and Walgreens, came in thin cardboard packaging that could be opened and resealed after the card information was copied.
The lawsuit accused Visa and the card issuers of failing to warn consumers about the risk of tampering and sought damages under New York consumer protection laws.
Judge Woods rejected the claim, saying it was not reasonable to expect gift cards to be immune from scams or to assume that the Visa logo was a promise against fraud or a guarantee of support for victims.
The court also said Visa had not failed in its warnings, pointing to media coverage and online discussions that had already highlighted scams involving Vanilla cards. The judge noted that no reasonable consumer would expect Visa, as a major card provider, to be unaffected by such third-party fraud.
