Apple to settle lawsuit over multi-million dollar gift card scam
Apple has reached a settlement in a lawsuit that accused the tech giant of knowingly allowing scammers to profit from its gift cards. The company and the plaintiffs have agreed on the main terms of the settlement, which will be submitted to US District Judge Edward Davila for preliminary approval. The lawsuit was filed in a federal court in San Jose, California, and involved Apple working with a mediator to reach an agreement.
Scammers exploited gift cards for fraudulent transactions
The scam involved fraudsters pressuring victims via phone calls to buy App Store, iTunes, or Apple Store gift cards for expenses like taxes or bills. Victims were then told to share the codes on the back of the cards, even though there was a warning not to share them with strangers. The plaintiffs claimed that Apple funneled 70% of the stolen funds into the scammers' bank accounts and kept 30% as a "commission" for converting the stolen codes into cash.
Lawsuit covered victims from 2015 to 2020
The lawsuit covered those who bought gift cards redeemable on iTunes or the App Store between 2015 and July 31, 2020, provided codes to scammers, and did not receive refunds from Apple. According to the complaint, victims likely lost "hundreds of millions of dollars" in the scam. In June 2022, Judge Davila denied Apple's request to dismiss the lawsuit, stating that the plaintiffs had sufficiently alleged that Apple's attempt to disclaim liability was unconscionable, even after victims reported being scammed.
