Gift Card ‘Draining’: How to Apply for Compensation After San Francisco’s Lawsuit
On Friday, San Francisco City Attorney David Chiu announced that over $1.5 million in funds will be made available to Californians who were impacted by a gift card scam in recent years.
The new fund, which Chiu called “a win for consumers,” is a result of a settlement from the city’s 2023 lawsuit involving Vanilla gift cards.
Vanilla gift cards — made by Georgia-based company Incomm — are prepaid cards sold in places like grocery stores or gas stations, which can be given as gifts or used by the purchaser as an alternative to cash. The city’s suit alleged that the “insecure cardboard packaging” of these gift cards was susceptible to tampering by scammers, who were able to take some or all of the money before the card recipient could use it.
The lawsuit, according to a 2023 press release, also claimed that Incomm and its partner banks knew “about the obvious security problems for a decade” and “refused to remedy the issue or provide consumers refunds for fraudulent transactions as required by law.”
Chiu said this scam is called “card draining” and that the funds would help “put money back into the pockets of those who were victims.”
He told KQED that while he did not know how many Californians were impacted by the scam, the city had been prompted in part to file the case by “hundreds of complaints [by] folks all over the state and the country who were victimized here.”
If you also believe you’ve faced a financial loss using Vanilla gift cards, you may be eligible for compensation through the fund. Read on to learn more about how to apply.
KQED also has a guide on other scams that are common in the Bay Area, including text scams and utility-based scams. “We’re living in a time where we’re seeing just record levels of consumer scams,” Chiu said. “And we’re really glad this case will be behind us.”
How can I check if I am eligible for the fund?
You can check your eligibility on the settlement’s official website cagiftcardsettlement.com. The deadline to apply for compensation is Friday, Feb. 19, 2027.
Criteria for eligibility include:
- Being a current California resident
- Having purchased a non-reloadable Vanilla Prepaid Gift Card between Nov. 1, 2019, and Sept. 30, 2024 in California
- Having received a non-reloadable Vanilla Prepaid Gift Card that was purchased in the above time frame in California
- Not being able to use “some or all of the money” on the card “because of charges you did not authorize”
- Did not receive a refund from the parent company, Incomm Financial Services, for money lost.
What do I need to submit on the website?
You can submit a claim form, an attestation and a proof of claim form. Since this is a lot of information to pull together, be sure to check out the website for the exact specifications.
According to the settlement’s website, the claim form is mandatory for receiving compensation. This is where you will provide details including:
- Your home address, including your address when you bought the Vanilla gift card, if different from your current address
- The stated value of the card when it was purchased
- The approximate date and location of purchase
- The amount of money spent in unauthorized transactions that you believe were the result of a person stealing money from the card by tampering with the packaging
- The 11-digit serial number on the back of the Vanilla gift card
- Either the 16-digit card number of the Vanilla gift card or a statement that the Vanilla Gift Card’s 16-digit card number was altered or scratched off when you opened the card
You’ll also be asked to make a mandatory “attestation,” in which you must affirm that the information you are providing is true under penalty of perjury.
Unlike the claim form and the attestation, submitting the proof of claim form is voluntary. But if you do submit it, you may qualify for even more money. Here, you need to submit details like:
- The receipt for the Vanilla gift card purchase
- Photos of the Vanilla gift card (front and back)
- The transaction history for the Vanilla gift card
When you submit your claim, the settlement allows that the SF City Attorney or the Claims Administrator “may share your claim information with the Company to be checked against the Company’s records.”
How much could I get paid?
Your potential compensation depends on whether you submit the proof of claim form or not.
According to the website, a valid claim with a completed proof of claim form might get all of the money back that you lost.
An incomplete proof of claim form can get you up to 75% of the money you lost — but this is subject to adjustments.
A valid claim without a proof of claim can get you “a flat payment of up to $15 regardless of the value of loss reported in the claim.”
However, this group gets lower priority, and if the first two categories get more slices of the fund, they could get less than $15.
So, ultimately, it could help to submit proof of claim form — regardless of how much information you have.
When could I get my payment?
According to the settlement’s website, payments are slated to be sent out around June 19, 2027.