Apple is being sued for allegedly refusing to come to the aid of victims of an iTunes gift card scam. An 11-count class action lawsuit has been filed against the company by victims that says Apple is lying to them when it says there is no way to trace or refund the value of the gift cards.
A large and growing number of scams to steal money from victims involve pre-paid gift cards like department store cards and gift cards like iTunes gift cards.
The FTC says anyone that demands payment by gift cards is always a scammer. These can include various imposters that might call you and claim to be from the IRS, collecting back taxes, interest, and fines. The caller may even claim to be from tech support of some sort, requiring payment for fixing your computer. Some scams involve the “Grandparent” scam where a caller poses as a family member in trouble that needs money immediately.
All of these scams have one thing in common though, as they involve an urgent need for the victim to send money immediately. Once victims buy a gift card, they will be instructed to supply the gift card number and the PIN number on the back of the card. That information allows the scammers to immediately access the money stored on the card.
Scammers then use the value of the store cards to buy laptops, smartphones, and other high-value items. iTunes gift card work a bit differently, as the gift cards are used to purchase apps owned by the scammers, resulting in a 70% payout of the money when paid by Apple.
The lawsuit – filed in the United States District Court, Northern District of California. San Jose Division – claims Apple tells scam victims that it has no way to recover gift card funds once the money has been spent, but argues that this is not true.
Apple actually holds 100% of the funds for a period of 4-6 weeks, between the apps being purchased and Apple paying the developer. During this time, the company is in a position to refund 100% of the card value. Plus, Apple also takes a 30% of all App Store app sales, so it would always have the ability to refund at least that much, even if the scammer has already been paid.
Unfortunately, many scam victims are elderly, so three of the eleven lawsuit counts accuse Apple of being in violation of laws designed to protect the elderly from such abuse.