On June 23, 2025, Patterson Belknap successfully obtained a dismissal of a putative class action complaint on behalf of our client, InComm Financial Services, Inc. ("InComm"), in the Southern District of New York.  Plaintiff alleged that InComm’s Vanilla Prepaid Gift Cards were deceptively marketed because the “VISA” logo on the card suggested the cards were immune to third-party fraud and did not explicitly detail the risks of package tampering fraud.  On that basis he asserted claims under New York’s General Business Law (“GBL”).

The Court granted InComm’s motion to dismiss the complaint for failure to state a claim.  The Court held that "no reasonable consumer would fail to recognize the possibility that a gift card they bought may be subject to a third-party scam” and that the packaging of the cards “would not mislead a reasonable consumer into believing that the cards were immune from fraud.”  To the contrary, the Court found that the Vanilla gift cards do contain warnings about the possibility of package tampering fraud.  The Court also highlighted that Plaintiff failed to adequately allege that InComm denies refunds to consumers impacted by package tampering fraud, noting that Plaintiff was in fact granted a refund in the one instance he requested one.  Furthermore, the Court found that Plaintiff lacked Article III standing to seek injunctive relief because, even assuming he was deceived in the past, he is at no risk of future deception because he is now aware of the possibility of third-party fraud.

This is not the first such victory that Patterson Belknap has achieved.  In the past year alone, the firm has defeated three additional putative consumer class actions relating to alleged shortcomings of prepaid gift card products. Through its strategic advocacy, the firm has drilled down on the severe factual and legal flaws of each case to secure a complete dismissal. In two of the three past cases, Patterson Belknap achieved not just dismissal but an award of sanctions against the plaintiffs’ attorneys; and in one, Patterson secured a six-figure award of attorneys’ fees due to plaintiffs’ counsel’s “stunning, nearly two-year lack of diligence” in investigating the facts behind their claims.  In all of the aforementioned class actions, the Patterson Belknap team was led by Advertising Litigation partner Jane Metcalf and supported by attorneys from the firm’s Advertising Litigation group.

To read the Court's opinion, click here.

To read press coverage from Bloomberg Law and Law360, click here and here [a subscription may be required to view].