Suburban woman's American Express gift cards used by fraudsters or missing their balances

CHICAGO (WLS) -- Gift cards are popular holiday gifts, but a suburban business woman said she was horrified to find the gift cards she purchased and gave to people didn't work.

Patricia Shelton said she bought the cards directly from the American Express gift card website.

"Each person's gift card was declined," Shelton said.

Shelton owns a private transport business in Woodstock. She buys gift cards in bulk from American Express, and every year gives them out as gifts to friends, vendors and work associates.

"I wanted American Express because it's a brand name and they can do whatever they want," she said. "If someone wants to go to Home Goods or if they want to get their nails done, or they can pay bills with it if they want."

Recently, Shelton gave out some of the gift cards while meeting business associates at a pub, but those recipients told her the cards didn't have money on them.

"I wanted to crawl and hide, I was so embarrassed. It looked like it had just stolen them off of a kiosk and never paid for them," she said.

So Shelton checked the remaining gift cards, which she keeps in an office safe. She said those, too, didn't have money on them,

"I found five more. And it was mostly the $100 ones," Shelton said.

She reached out to American Express who, after completing an investigation, replaced the compromised cards. But months later Shelton said she found four more without a balance. She said American Express told her they're still investigating.

Shelton said her co-worker put the card numbers into American Express's website and found out where some of the money had gone. One $100 gift card was used weeks earlier to buy a gaming app and $70 worth of Taco Bell in California. Others were used for PayPal purchases and gas.

"We gave out, throughout the year, $2,700 or $2,800 in gift cards and not everyone has the guts to say, 'hey did you steal this instead of paying for it'," she said.

American Express and a separate company InComm Payments which manages and processes American express gift cards, responded to the I-Team saying they can't comment on individual customers because of privacy reasons, but they "take concerns from cardholders very seriously" and, "We recognize the frustration Ms. Shelton has experienced."

The companies added, "Fraud prevention is a top priority, and our dedicated fraud teams are constantly monitoring for new and emerging threats so we can develop advanced methods for protecting cardholders."

Shelton bought her cards directly through American Express's website, so it's unclear how the alleged fraud occurred.

American Express reminds customers that they can also review account balances and check transactions online.

Also, when buying in person, consumers should inspect all gift card packaging prior to purchase and look for signs of tampering. Make sure the numbers have not been exposed.