Posted by tosh 12/18/2025
InComm is one of the two major program managers in the space, and they have had really severe fraud problems for a few years. They cracked down hard on prepaid card ("gift card") redemption about two years ago (right after the holidays).
This is an ongoing problem involving Visa, InComm, DHS, and a couple banks. Customers are being damaged, Visa's brand is being damaged, etc.
InComm is invisible to customers, but it was their action that made (most) Visa open loop prepaid debit cards difficult to use.
Notably, the other major program manager (Blackhawk Networks) also runs a few lower-volume Visa card programs, and they are still accepted normally.
Informed customers can make an explicit decision to purchase only Blackhawk-managed Visa cards. But that information is not trivial to obtain.
I am not a lawyer, but I have done this multiple times:
Read the T&C and search for "dispute" or "dispute resolution". Look for what you're supposed to do when you have a dispute. Follow the steps as outlined. Corporate lawyers generally take things seriously.
But what do the credit card companies get out of this arrangement? It seems like they’re taking on a whole lot of unnecessary risk and enabling these scams by allowing third party gift cards to be purchased using a credit card.
I work for a major gift card company. These views are my own and not that of my employer.
The credit card companies take zero risk in this transaction, because we, the company selling the gift card, take the risk.
To this end, my personal job is building systems to prevent and combat credit card fraud. It's not terribly complicated in fact. The team I originally started with a decade ago was like three people.
Every gift card purchased by a stolen credit card is a direct loss to our revenue. We strongly want to keep that amount small. We do a pretty good job of it.
We have a large department of REAL HUMANS you can call to get help with your gift card. In the past, they have had very upset grandmas calling in to ask about why they can't purchase iTunes gift cards because they need them to get their nephew out of prison. Those calls are very sad.
Physical gift cards have no value until you pay the cashier. Despite this, physical gift card security is tough. The plastic card has to be shipped out and sit on a shelf and be directly available to anyone to tamper with. We have made some efforts to reduce that threat, but there isn't much we can do.
If you are in the US you have absolutely used our company's products and if you have bought a gift card online there's a 90% chance your transaction details have run through my code.
Frankly, I do not understand why Apple would have banned an account for trying to redeem a scammed or tampered with card. That doesn't make any sense.
Presumably you could also take things back to the level of "store X, you have a serious problem."
>Are you able to track balance checks made against card numbers not yet activated?
Yes. Can't get into specifics. Not every card supports balance inquiry though. Not entirely sure how this applies to physical gift cards.
Usually what happens is that someone simply writes down the card number, and waits, and then tries to redeem it. They don't do a balance check.
>Presumably you could also take things back to the level of "store X, you have a serious problem."
We can get down to the register. Fraudsters are sometimes employees. But you can't treat customers like criminals so doing anything about it is hard. These same stores don't seem to mind customer info leaking and credit card data being stolen in the first place.
We sometimes have to replace these cards for consumers, because it's dumb to spend a hundred dollars for a giftcard and it was stolen previously, that's not their fault
Most consumers are blissfully unaware (as they should be!) of the complexities of ordinary payments transactions, never mind the even-weirder world of closed loop prepaid debit.
So you could use your existing apps but not download new ones from the App Store.
You could use iMessage with some restrictions. You could use Apple Music but only the free radios. You could use Apple’s photos but would lose sync.
Usability depends on how much you rely on those services, but the device itself is still useable for other things.
It's against apple's ToS to avoid bans as such.
That said, I choose to use it this way and it does everything I need it to.
Reasons:
1. Gift cards artificially tie-up value into a company that cannot be effectively converted into something else.
2. The value can disappear.
3. Weird other hassles like this can happen.
I'd put money on they had to restore backups of several systems, fish out his account-specific data, then insert it back into the main systems. This would have happened much faster if there was just an on/off switch.
This is the same reason I dont use GCP -- ever -- for business. If there is ever an unintentional linkage in GCP of your personal gmail account, and you have an issue on GCP, your personal account can get locked out.
They did The Right Thing™ which was to honor them, so that their reputation and brand were preserved.
lots of other examples, like new coke fiasco, the poisoned tylenol, etc...
But why would apple punish the secondary user of the card? That seems like the wrong person to punish.
... note an update on this story: Paris got his account unblocked today, thanks to the story being covered here and throughout the blogosphere. It's a good outcome but not a path open to most people: