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Apple Faces Lawsuit Over $1 Billion iTunes Gift Card Scam

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Apple Faces Lawsuit Over $1 Billion iTunes Gift Card Scam

A new class action lawsuit filed against Apple claims the company profits from iTunes gift card scams. It alleges that Apple knowingly enables scammers who trick their victims into paying large amounts of money via iTunes gift cards, because it keeps a 30% commission on the proceeds.

The scammer often pose as Internal Revenue Service (IRS) agents and tell victims they have outstanding hospital bills or other types of debt to scare them. Sometimes the debt is real, and the scammers make it scarier by claiming they victims need to pay within a short time frame or they will be arrested or taken to court. Payment is requested by way of iTunes and App Store gift cards. Victim are told to purchase them and then provide the authorization codes to a specific phone number. Scammers either sell the gift cards or use them for purchases. In both scenarios, the plaintiffs say, Apple keeps its 30% cut.

It sounds far fetched, but it is indeed a very successful scam and has even forced Apple to put up a dedicated page warning about it.

The complaint claims that Apple has made a $300 million profit from the scam. At a 30% cut, that would put the amount of the scammed iTunes gift cards at $1 billion. The plaintiffs say Apple should be able to catch the scams at various points, according to Apple Insider, thanks to the company’s ability to track all the key points in the process, from point of sale to Apple ID upload to payment.

The plaintiffs claim Apple has committed a breach of contract, become unjustly enriched through the scams, breached the Implied Covenant of Good Faith and Fair Dealing and aided and abetted international torts.

HT: Top Class Actions

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  1. Frivolous lawsuits and excess monetary awards add 30% of the cost of medical care to patients in the United States. Other countries don’t have laws which allow these ridiculously inflated awards and excessive lawsuits.

    Anyone who falls for this scam is an idiot. Only an idiot would send iTunes gift cards to some company requesting it as payment for debt.

  2. I agree wholeheartedly with @Barnum. These types of lawsuits as just a waste of judicial time. Whatever happened to due diligence?

  3. So Apple risks their reputation for $300 Million in gift card scams??? They earn that in a day or two on legit sales. This lawsuit is beyond stupid.

    • The only happy lawyers will be Apple’s when the case is dismissed. Apple has no duty to prevent anyone from misusing its gift cards. Any product can be misused. An auto dealer is not responsible for selling a car that killed someone because the driver killed someone while driving impaired.

      Garbage lawsuits like this send the message that personal responsibility is not important and someone else is to blame for our misfortune.


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