Watch out, your gift card may already have a $0 balance

CHARLOTTE — With the holidays quickly approaching, scammers are targeting gift cards.

Riquiyiah Smith says she went to use her gift card just about 24 hours after she bought it and that it was drained. All $500 was gone.

“Kind of hurt feeling. It’s not five dollars. It’s $500,” she said.

Todd Edlin says he had a similar experience with multiple American Express gift cards.

“I was shocked when I went to try to use one myself and I was told that there was not enough balance on it. So I tried a second and a third one,” he said.

Ron Lowe says he bought a gift card for an abuse victim who needed to get out of the state immediately.

“Walked out of the store and immediately handed [it] to her and I said, ‘Just go, go your car with gas and go,’” he said.

But he says the card -- a Vanilla one -- was empty.

“She did not spend one dime on that card. Nothing and it was deactivated,” he said.

Action 9′s Jason Stoogenke has been warning you about drained gift cards for years.

He recently realized they all have something else in common.

Your gift card might say American Express, iTunes, Vanilla, or Visa. But regardless of what name brand is on the front of the card, the company that really handles the money is on the back, and in the vast majority of cases, it’s InComm.

Graham Lippsmith is a lawyer who’s suing InComm on behalf of Vanilla gift card users. They claim the empty balances could be an inside job, could be the result of a cyber breach of InComm security, or that criminals may have cracked the company’s algorithm for creating card numbers.

“If that’s happening thousands of times, tens of thousands of times, millions of times, that’s what class action lawyers are here to try to prevent from happening,” he said.

InComm emailed Action 9′s sister station in Orlando:

InComm Payments takes concerns from cardholders very seriously. If one of our customers reports an issue, we inform them of the information needed to conduct an investigation and the timeline required to complete it,” the statement said. “We then review complaints on a case-by-case basis to devise an appropriate solution. Without receiving the necessary information in the provided timeline, our evaluations are limited to what evidence is available.”

Privacy regulations as well as our policy restrictions prevent us from commenting on individual consumer situations, but we can confirm that we contacted Ms. Perez to explain the status of her case. Fraud prevention is a top priority across our company. We are constantly working to ensure consumers can safely use their gift cards by developing new methods and techniques that mitigate the risk of potential fraud.

We do not disclose the tactics that fraudsters use in order to prevent copycat behavior. However, we can share that our dedicated fraud teams are constantly monitoring for new and emerging threats. We also review cases and consult with our merchant partners to fine-tune fraud prevention strategies.

If consumers have concerns about how to protect their gift cards, there are steps they can take to maintain vigilance against fraudulent activity, including:

• Inspecting a gift card’s packaging prior to purchase for signs of tampering, such as slits along the seams, glue residue or color distortion.

• Regularly monitoring for transactions by reviewing the account balance on their product’s official website, which is printed on the back of their card.

• Calling the customer care phone number on the back of their card immediately to report an issue.

To find out more information about their card, consumers should visit their product’s official website by typing in the URL as it is printed on the back of the card. To call customer support, they should only use the phone number that is printed on the back of the card.

Stoogenke emailed InComm for Smith.

“I just need something of my $500 because I can’t come across that every day,” she said.

About three hours later, she told him it worked, that she was getting her money back. She says she was just trying to buy clothes for her daughter.

“That was her one shot and I was like baby, I can’t get it back baby. I can’t. Because I can’t go oh, let me take out another 500, it’s OK. No, that’s not OK. That’s not OK at all,” she said.

(WATCH BELOW: ‘I feel ripped off’: Victim says check washing scam cost him $5K)