Credit card issuer Visa has been hit with a proposed class action lawsuit after consumers alleged that the company purposely marketed and sold gift cards susceptible to thievery and then refused to refund customers who were scammed.

A consumer named Ira Schuman filed the complaint on Tuesday in the U.S. District Court for the Southern District of New York after claiming he lost $4,000 when bought eight $500 Visa Vanilla gift cards in 2022 and 2023 that were part of a “card draining” scam.

A “card draining” scam is when thieves remove the silver lining that covers the security code from the back of gift cards, record the security code, register the cards, and then put the card back on the shelf with another silver strip.

The complaint alleges that Visa knew that the gift cards were susceptible to this kind of theft and did not take appropriate security measures to prevent it from happening.

Related: Scammers Found a New Way to Steal Money From Your Gift Cards This Holiday Season — Here’s What to Look For

“When a consumer purchases a Vanilla card, he or she selects a card at a retailer, then presents it to a cashier who loads the consumer’s desired amount of funds onto the card,” the lawsuit explains. “Thieves, however, can monitor the balances of the Visa Vanilla cards they previously accessed on Vanillagiftcard.com. When funds are loaded onto Visa Vanilla cards, thieves make transactions with the cards until the funds are depleted before the consumer has had a chance to use them.”

The card information and balance can be accessed online by anyone with the 16-digit number on the front of the card, the expiration date, and the CVV number. Once a card has been depleted, it can not be reloaded.

“Visa Vanilla cards do not include a registration process that protects against fraudulent transactions. Typically, this ‘card draining’ occurs even before the card purchaser has an opportunity to use the card or give the card as a gift,” the lawsuit states. “Defendants are aware of this problem and have failed to make necessary improvements to the security features of Visa Vanilla cards to prevent the known and widespread fraudulent conduct.”

The lawsuit did not specify how much the class action is seeking in damages.

Visa did not immediately comment on the pending allegations.

How to Avoid Card ‘Draining’ Scams

In December 2023, Target warned customers against gift card scams, telling customers not to buy, sell, or check the balance on a gift card anywhere that is not on Target’s website.

Check the front and back of the card and look to see if the silver strip appears to have been manipulated.

“Do not purchase a gift card if it appears that the packaging has been altered or manipulated,” the retailer says. “If you have questions about a gift card, ask a Target team member for assistance.”