A class action lawsuit alleges that Google has retained millions of dollars belonging to victims of Google Play gift card scams despite being fully aware these funds come from fraud.
The lawsuit, filed on March 5 in a federal court for the District of Northern California, said Google doesn’t just let scammers redeem Google Play gift cards obtained fraudulently but refuses to reimburse victims when they contact the company.
Google Play gift card scams usually involve fraudsters tricking people into buying Google Play gift cards and sharing the code with them. Once they have the card details, scammers can redeem the card to make unauthorized purchases or sell the card details to others.
If successful, scammers will often repeat the process, convincing victims to buy multiple Google Play gift cards.
Google Gets Commissions for Gift Card Transactions
The lawsuit accuses Google of profiting from stolen Google Play gift cards by retaining a commission from the transactions made with these cards and failing to refund victims when they “provided Google with the information necessary to identify and return their stolen funds.”
Google takes a 15% to 30% commission when users purchase apps or make in-app purchases with Google Play gift cards. The rest of the money goes to the app developers.
“On information and belief, Google sometimes withholds payments for purchases made with scammed gift cards from Google Play Developers and retains 100% of the stolen money for itself,” the lawsuit added.
Google’s support page on gift card scams warns that these cards are “non-refundable, unless required by law.” Without detailing exceptions, it says that if you’ve shared gift card codes with scammers, the funds are likely already spent and irrecoverable.
“In approximately April 2021, Plaintiff May purchased $1,000.00 in Google Play gift cards as a result of the gift card scam. She thereafter contacted Google to report the scam. Google informed her that there was nothing it could do and that it would not refund the monies she had paid for the Google Play gift cards,” the lawsuit reads.
“Plaintiff May requested but has received no refund or reimbursement from Google or any other source,” it added.
Victims Lost $433.5 Million to Gift Card Fraud Between 2018 and 2021
The court filing references data from the Federal Trade Commission (FTC) showing that between January 2018 and September 2021, victims lost about $433.5 million to gift card scams. Google Play gift cards were involved in 20 percent of these fraud cases.
This lawsuit seeks class status, alleging violations of various laws, including unfair and unlawful business practices, and demands compensatory and injunctive relief.
Google is not the first tech giant accused of profiting from stolen gift cards. In January, Apple agreed to settle a lawsuit accusing the company of deliberately permitting fraudsters to exploit its iTunes gift cards while retaining fees generated from their fraudulent activities.
How to Combat Gift Card Scams
Gift card scams have been around for years, but they’re becoming increasingly sophisticated. In 2021, security researcher Brian Krebs exposed a cybercrime group that breaches up to 100,000 inboxes daily, targeting gift cards and loyalty points for quick online resale.
Gift cards are also often used in Facebook Marketplace scams. The FTC lists the following telltale signs of gift card scams and steps you can take to protect yourself:
- Urgency: Scammers create a false sense of urgency, claiming immediate payment is necessary to avert disaster.
- Specific Instructions: The fraudsters will specify which gift cards to purchase and may direct you to particular stores like Walmart, Target, CVS, or Walgreens. They aim to avoid raising suspicion and may even accompany you over the phone as you make the purchase. If you find yourself in this situation, disconnect immediately.
- Demand for Card Details: Once the cards are purchased, scammers will ask for the card numbers and PINs. Never share these details.
- Report Immediately: Contact the gift card company as soon as you realize the scam, regardless of how much time has passed. The FTC offers more information on how to contact gift card companies.
- Request a Refund: Some companies are actively fighting against gift card scams and may refund your money.
Remember, legitimate businesses never require payment through gift cards under the guise of urgency or secrecy. If you fall victim to this scam, we recommend reporting it to authorities like the FTC in the U.S. and to the retailer that issued the gift card.
For more safety tips, check out our guide to avoiding online scams.
Here’s a gift card scam video from famous YouTube scam-baiter Kitboga.
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