Kalboz

I was really surprised about how hostile Hyatt representative was with me during my call about this issue. Not that it is required, she hanged up on me without the customary thank you, salutation, or any sympathy!

Currently in touch with Alex - The Points of Life the author of the following and will see what happens: http://frequentmiler.boardingarea.co...rate-mischief/

Would like to add that I only want to recoup the $745 I dished out, nothing more and nothing less.

cdancer20

My thoughts exactly!! It seems though that in any case where there has been issues, Hyatt plays dumb and does nothing towards the theft. If they were to do that than I imagine that less thefts would happen. There is no sense of accountability for this happening. They have a clear trace to when/where it was used. This is unlike for instance the issue with US Bank gift cards that were compromised. It's easy to go into a store with stolen GC info and never be traced back to the who used it.

cdancer20

And I would say that that would be easy to be able to fight the ebay seller since you could prove that you never used the GC but they can trace selling the GC to XYZ person. Would take some leg work yes but they are clear paths to who did what.

josephstern

Sure, if nine months hadn't elapsed.

cdancer20

I'm referring to in small claims court.

seawolf

Sure Hyatt has the information of who used it but the question is how does Hyatt legally establish which claim is genuine and which is fraudulent without this going thru the court system?

Take Kalboz's drained gift card as an example. Let's say according to Hyatt records, the gift card was used by Jane Doe at the Andaz Maui shortly after Kalboz "purchased" the card.

From Hyatt's perspective, how does Hyatt establish the true owner to "make whole? (if applicable)"

• Perhaps Jane Doe is the true owner all along and have no idea that hackers cracked the Hyatt gift card algorithm and sold her gift card number to CardCash who then sold it to elizabethperez55 who then sold it to Kalboz.
• Perhaps the hackers who sold the card to elizabethperez55 sold it to multiple gift card resellers and one of these other resellers sold it to Jane Doe who then used it before Kalboz did.
• Perhaps elizabethperez55 obtained the card legitimately as a gift for her wedding but couldn't use it and sold it in good faith to Kalboz without realizing the gift card# has been compromised by another party.
• Perhaps elizabethperez55 is the Jane Doe who used the card at Andaz after selling it to Kalboz.
• Perhaps elizabethperez55 sold it to multiple people and one of them is Jane Doe who used it before Kalboz.
• Perhaps Kalboz is Jane Doe and used the card (not accusing Kalboz but just using this as an example).

In the last three scenarios, how is Hyatt (or Gap or Disney or American Airlines or The Cheesecake Factor etc) liable at all? These three scenarios are inherent risks to the secondary gift card markets even if the Hyatt gift card algorithm was not compromised to begin with. That is why certain resellers offer guarantees.

From Hyatt's perspective, any of these can be true or none of it. Accessing the gift card transaction history is the easy part. Determining who to make whole (if applicable) is the hard part.

Taking someone here to small claims is a shot in the dark. Kalboz does't even know who the guilty party is except it is not Kalboz.

cdancer20

Actually Kalboz knows that they bought a card from the ebay seller. They should be able to take that person to small claims court. If the seller got it from somewhere then they should fight that person/company. That's not on Kalboz's side to do. Take for instance, if I go to Kmart and buy a vacuum cleaner. If the vacuum breaks or has a recall, etc, then I return it to Kmart. From there, it's up to Kmart to return to the manufacturer for a refund.

You have very valid points. However, it is a very sticky situation but the point is that whatever Hyatt has done, little to nothing, hasn't fixed the problem. This is a solution that could help slow down the fraud. Someone has to be accountable for using these cards. Notice that other gift cards aren't having these same issues. This is a huge Hyatt specific problem that stems even further than from the 3rd party seller.

SportsTech

I agree with Mary2E, there's a fairly simple audit trail for almost anyone who paid for a card that was drained. I still have the PDF for the cards I bought from Cardcash, and a Paypal receipt to prove I paid for them. And I have (Hyatt) Visa card receipts for every Hyatt stay between the time I bought the electronic gift cards and the time I tried to use them. So I can prove that I bought the card, and I can prove that I didn't use it. Someone else did, and Hyatt can easily find out who it was; what they do about it I don't need to know - but I hope they (Hyatt) follow through and bust somebody, and they should make me whole regardless.

More to the point of this post's title - I bought my first set of these cards on eBay after Hyatt confirmed - in this forum - that the eBay seller was legitimate and that Hyatt sometimes sold these cards to resellers. I would never have purchased a card from a private individual on eBay, but a legitimate reseller? Sure, since hyatt told me it was ok:

Here's the thread this quote came from.

Small Claims would never find in favor of the eBay buyer when the seller proves - via Kalboz' first post in this forum - that the cards had the balance they were supposed to have when Kalboz first got them,

In my opinion, this is a lot better class action suit than Small Claims action; I think a good attorney could prove, with a bit of discovery, that Hyatt sold Cardcash the remaining balance of the gift card inventory at a huge discount knowing that some of CardCash's customers would experience fraud, and I'm further guessing that they promised to reimburse CardCash for claims that occurred within CardCash's 45 day refund window - giving Hyatt a way to get out of the business and essentially paying CardCash to take the heat from anyone like me who was dumb enough to buy a card that I didn't use within 45 days. CardCash has to have known about the fraud issue before they got into bed with Hyatt, it's all over the 'net, and I bet there's correspondence somewhere that proves Hyatt would make good any of CardCash's losses.

Very sleazy behavior on Hyatt's part, and I'm sorry I (and Kalboz, and anyone else who bought these cards in good faith and got ripped off) ever listened to Hyatt's representation that the deals/dealers were legit. And I'm outraged that Hyatt hasn't taken any responsibility for the mess I believe they knowingly created.

josephstern

Pretty interesting - I hadn't seen that thread or auction.

But is there any link between Kalboz's situation and that one? Sure, they're both on eBay, but are you implying that his cards were originally from that lot?

seawolf

If you can track the the card as You->CardCash->Hyatt, then easy to claim you are rightful owner as you indicated. But who knows if Kalboz's card and others on ebay is the same.

It could been Kalboz->elizabethperez55->CardCash->Hyatt or it could be Kalboz->elizabethperez55->elizabethperez55's uncle->another ebay account that is fly by night=trial goes cold and from Hyatt's side they sold it Jane Doe but used by John Smith. Kalboz might have receipts showing payment was made to elizabethperez55 and also provide evidence Kalboz was not at the hotel at the time the gift card was used. But it doesn't necessarily mean Hyatt should make Kalboz whole.

My point is Hyatt knowing when/where it was used is not enough to "make whole" until you go thru the legal system to establish who is the real owner.

In the meantime, I would think the continuing losses from replacing gift cards of those purchased directly from Hyatt would give them financial incentive to change/fix their gift card security shortcoming.

SportsTech

No clue re Kalboz' card; I highly doubt that elizabethperez55 was a reseller with a direct purchase relationhship with Hyatt and as I said, I would never buy a gift card on eBay from a private individual no matter how good their feedback score is.

My point is that Hyatt is responsible for the integrity of gift card balances until redeemed by the purchaser, whether the card is physical or an eCard. If you buy a retail gift card at Stop & Shop or Ralphs, the card itself is the currency, not the # on the card. I have ordered eCards online as gifts for other people and not one of them - except, of course, for my Hyatt cards - has ever been compromised.

Hyatt f'd up their gift card program by making the number the currency, and they did so in a manner that clearly can be hacked (I've been told that if you know one card number, odds are very high that there are valid numbers on either side of that number because they numbered the cards sequentially in blocks of 10 - if true, how incredibly dumb is that? Would be an automatic fail in any freshman programming class.) They shouldn't make good customers like Kalboz (and me) pay for this mistake.

josephstern

Feels like, if you do that (make Kalboz and similar whole) then you open the floodgates.

First, there's probably a ton more fraud where people will want to be made whole. Right now, they may be thinking, 'OK, I bought this garbage on eBay, and it's really garbage. I learned my lesson.' But if data points start showing up, then everyone will want to be made whole.

Next, you encourage more fraud, for sure. If there's no downside to selling a Hyatt GC on eBay because you can collect the money, use the card anyway, and expect Hyatt to make your buyer whole, then Hyatt has a huge problem.

Finally, if scammers realize Hyatt is making people whole, what's to stop them from sending a gift card that they have used in full to a friend and telling them to complain to Hyatt?

Sure, Hyatt screwed up. Or, more likely, their gift card contractor did. But I don't think you can expect them to step into situations like this and a) try to divine the "true" owner (still arguable here, to me) and then b) come out of pocket to compensate them.

seawolf

There are two kind of risks here.

1.) Risks inherent to secondary market. This exist regardless of whether we are dealing with Hyatt, Disney, Starbucks, Walgreen's etc gift cards. The issuer has zero responsibility for replacing such a card and is accepted practice reflecting in the secondary marketplace offering guarantees provided by resellers such as card cash/raise/gift card spread etc.

2.) Risk of getting gift card drained due to compromised number. This is specific to Hyatt.

IMO Hyatt should only replace value lost due to 2.) and only if the card was purchased directly from Hyatt (or Hyatt authorized channels). Reports in this thread indicate Hyatt is doing just that.

SportsTech

I completely agree - but note that my earlier post proves online commercial resellers are effectively "Hyatt authorized channels". [I doubt that any individual eBay giftcard sellers have a direct reseller relationship with Hyatt, but that's conjecture on my part; perhaps some do?]

When I bought my Hyatt card from Cardcash, they had hundreds of each price category - WAY more than their normal secondary market-maker inventory. I'd bet another $500 that CardCash bought them direct from Hyatt. But Hyatt - which certainly knows who they sold my card to/through - isn't standing behind their reseller here, and they aren't giving me or anyone else who bought a card through a reseller - even one they authorized - a way to prove that the card was purchased legitimately. Did I miss a post earlier where Hyatt is reported to have taken care of a drained card purchased through an authorized reseller? If not, I submit that Hyatt is not taking appropriate responsibility for the damages from their defective card numbering system.

Kalboz

Based on what Todd Tomlin (Director - Hyatt Gift Cards) says, there might be a cause for a class action there -

can our legal eagles comment here?