Over the last ten years, Google has kept millions of dollars stolen from unsuspecting victims through gift card scams and subsequently spent in the tech giant’s store by refusing to refund victims, or even warn them of risks associated with the gift cards, a new lawsuit alleges.
The “highly sophisticated” technology industry giant has known of the widespread nature of the scam for years and received many requests from victims and law enforcement for help, but given the large profits it makes off the back of the stolen funds, it has done nothing, the lawsuit claims. “Google has a direct stake in the success of these scams,” it adds.
Indiana resident Judy May filed the proposed class action lawsuit after she was the victim of one such scam, where, in April 2021, someone pretending to be her family member instructed her to to purchase Google Play gift cards and provide the codes in order to qualify for a government loan.
In total, gave away $1000 in gift card codes before realizing the next day she was the victim of a scam. She immediately contacted Google to try and get a refund, but was told by the company there was nothing they could do, the lawsuit claims.
May said if Google had warned consumers about the scams on gift card packaging she wouldn’t have given away the codes.
In most situations, a scammer will call a victim and say they owe money for taxes, bail, debt collection, and more, the lawsuit says, and say to avoid getting arrested, or getting their SSN, or physical items taken, they have to pay the money off using gift cards. If the scammer is successful, they’ll often try multiple times with the same victim. The scammer then either sells the code again or, more often, redeems it in a Google account.
At this point, Google is fully aware which accounts the cards have been redeemed into. Even if the scammer immediately tries to spend the money in their account, Google puts a hold on fund transfers in case purchases are canceled.
The lawsuit argues that because of knowing where the money is, and keeping it there for a period of time, Google is able to refund victims given they normally contact the tech giant within a few hours or days of being scammed.
“When Google learns that it has possession of stolen property, it has a duty to return it to its rightful owner, the victim. However, Google neither returns it nor informs the rightful owner of its whereabouts,” the lawsuit claims, adding Google actually perpetuates the theft by failing to refund victims and failing to warn them at all about the risk of scams.
The Federal Trade Commission (FTC) said $433.5 million was lost to gift card scams during 2018-2021, and that is just the small number that were reported, according to the lawsuit. FTC data shows that Google Play gift cards make up around 20 percent of all reported gift card scams.
Other companies have also faced legal action over their alleged inaction in addressing the scams, including Apple, which agreed to settle a class action lawsuit this year over its iTunes gift cards, Reuters reported. A proposed class action was just filed against Visa for allegedly selling profiting from gift cards that are easily drained by thieves, Bloomberg Law reported.
Take note of the FTC warning that anyone who insists that you pay by gift card is always a scammer. If you have already given someone the numbers off a gift card, make sure to keep the receipt and follow these steps:
May wants to represent people from across the country in her proposed class action lawsuit and is suing Google for violations of the California Unfair Competition Law, California Consumers Legal Remedies Act, and Cal. Penal Code.
The plaintiff and proposed class are represented by Hal D. Cunningham of Scott and Scott Attorneys at Law, LLP.
The Google gift card scam class action lawsuit is May v. Google LLC et al, Case No. 5:24-cv-01314-SVK, in the U.S. District Court Northern District of California.
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