A Georgia gift card maker is facing a lawsuit in California after users said the gift cards they purchased were drained of their funds in a scam that has been all too popular this holiday season.

The lawsuit was filed by San Francisco City Attorney David Chiu against InComm Financial Services’ popular “Vanilla Gift” and “One Vanilla” gift cards. These pre-loaded and one-time-use gift cards are sold around the country and are accepted wherever debit cards are allowed. Chiu filed the lawsuit on behalf of California residents who were victims of the growing gift card scamming technique. Under California law, Gift card providers are obligated to reimburse cardholders if they've been the victim of an unauthorized transaction.

In announcing the lawsuit, Chiu shared, “Incomm’s negligence has opened the door for scammers to defraud thousands of consumers,” adding, “For over a decade, the company has ignored hundreds of consumer complaints calling for security improvements and refunds for fraudulent charges. As we kick off the holiday season, we are filing this lawsuit to sound the alarm, compel Incomm to adopt industry-standard security features to stop card draining, and obtain restitution for consumers who have been harmed.”

Chiu has also accused the company of providing poor customer service in that "InComm regularly refuses, in violation of state law, to refund consumers who are scammed out of their money as a result of Vanilla gift card draining."

Regarding the manufacture of these gift cards, the lawsuit accuses InComm Financial Services of not taking appropriate precautionary measures to protect consumers. The lawsuit describes that the gift card’s “insufficient” packaging and “lax security features” have allowed the gift cards to be susceptible to scams.

The complaint goes on to accuse the gift card maker of failing to improve the packaging design despite knowing that the flawed packaging enabled scammers to deplete the gift cards of their value even when consumers thought they were purchasing a new card.

Chiu says, "As the direct result of Incomm's years-long negligence, numerous consumers and gift recipients have been needlessly subjected to card draining."

Gift card draining has become a popular scamming technique used by both novice and experienced scammers. The scheme essentially entails a fraudster carefully removing an unpurchased gift card from its packaging and then recording the number and the PIN code.

Once they have this vital card information, the fraudsters place the card back in its packaging and back on store shelves so that an unsuspecting victim can purchase the card. Once the tampered card is purchased, the funds a buyer loads onto the card are immediately drained out.

Often, gift card holders won't realize the fraud has taken place until days or even weeks after they've purchased or been given the card.

Tampered gift cards have become increasingly difficult to spot with hackers often reverting to high-level techniques like using commercial tape and packaging to conceal their crime.

The Better Business Bureaus scam tracker has been following cases of drained cards and reports a 50% increase in card draining as compared to the same time last year. Between January and September, over 1,000 card-draining crimes have been reported to the BBB.

Sacramento County Police Department has also conducted at least 285 felony and misdemeanor arrests related to card draining.

In response to the lawsuit, a representative for the company issued a statement to CNN in which they maintained " categorically denies the baseless allegations made in the San Francisco complaint and are proud of our long history of innovation and consumer focus that has made us an undisputed industry leader."