On March 12, 2026, Patterson Belknap Belknap won dismissal of a putative class action complaint alleging that our client, grocery retailer Albertsons Companies, Inc., had inadequately informed consumers of the risk of prepaid card fraud. This is the most recent of several victories that firm partner Jane Metcalf, alongside a team of attorneys from the firm’s Advertising Litigation group, has secured for clients in the payments and fintech industry. In the Albertsons case, the plaintiff alleged that he had purchased four prepaid Visa gift cards at an Albertsons store, but that the cards’ balances were depleted by third-party fraudsters before he could use them. Though Plaintiff acknowledged that he had received a full refund for his cards after reporting the fraud, he nevertheless accused Albertsons of misleading consumers by advertising that prepaid cards’ balances were available for spending, and by providing what Plaintiff viewed as insufficient warnings about the risk of prepaid card fraud. 

Albertsons argued in its motion to dismiss that Plaintiff had failed to allege any actionable misrepresentation or omission, since Albertsons never implied that the prepaid cards were fraud-proof, nor did it have any duty to disclose the well-known risk of prepaid card fraud. In August 2025, the Court granted Albertsons’s motion to dismiss on these grounds but allowed Plaintiff leave to amend. Albertsons again moved to dismiss, and in March 2026 the Court dismissed with prejudice, concluding that Plaintiff’s amended complaint suffered from the same deficiencies as his previous one. The Court held that Plaintiff “still fail[ed] to plead an actionable misrepresentation,” since he did not allege that Albertsons had misrepresented any feature of the cards or their balances. The Court likewise found that Plaintiff “still fail[ed] to plead an actionable omission” by Albertsons, because Plaintiff did not “plausibly suggest active concealment” of the risk of prepaid card fraud, nor did Albertsons have “exclusive knowledge” of that risk. On the contrary, the Court observed, “widespread reporting” of episodes of prepaid card fraud “refutes any inference that Albertsons was in exclusive knowledge” that such a risk existed. In addition, the Court highlighted Plaintiff’s failure to plausibly allege that a generic warning of the potential for fraud “would have caused a reasonable consumer to behave differently.” This ruling brought the case to a final resolution in Albertsons’s favor. Jane Metcalf led the representation along with David Kleban and Benjamin Seymour.

In recent years, fraud and security risks within the fintech and payments industry have become a frequent topic of litigation, with some consumers and regulators arguing that payments companies should be held strictly liable for the conduct of third-party fraudsters. The New York Attorney General, for example, has sued a well-known payments platform for allegedly misrepresenting its security shortcomings; and in some putative class actions, major tech companies have paid eight figures to settle claims from consumers who claimed to have been targeted by fraud. In this environment, the Advertising Litigation group at Patterson Belknap is proud to have defeated numerous lawsuits that, like the Albertsons case, seek to capitalize on regrettable but rare occurrences of prepaid card fraud to extract monetary damages from card merchants. In 2025, Jane and the Patterson team won dismissal of a similar putative class action against three prepaid card providers in federal court in New York. The team also secured summary judgment on behalf of Walgreens in a putative class action relating to prepaid card security in the Northern District of Illinois. And in a similar case in the Central District of California, the team won not only summary judgment but also an award of attorneys’ fees, based on the plaintiffs’ “lack of diligence” and factual investigation. 

To read the Court's opinion, click here.