Apple Settles Lawsuit Over iTunes Gift Card Scam
Apple has reached a settlement in a lawsuit that accused the company of allowing scammers to exploit its gift cards and keeping the stolen funds for itself.
The settlement comes after Apple and the plaintiffs agreed on material settlement terms with the help of a mediator. The formal settlement will be presented to U.S. District Judge Edward Davila for preliminary approval.
The lawsuit alleged that scammers would pressure victims into buying App Store and iTunes gift cards or Apple Store gift cards to pay for various expenses such as taxes, hospital bills, and debt collection. Despite warnings on the cards not to share the codes with unknown individuals, victims were instructed to provide the codes to the fraudsters.
According to the complaint, Apple would deposit only 70% of the stolen funds into the scammers' bank accounts and keep the remaining 30% as a commission for converting the stolen codes into dollars. The lawsuit estimated that victims lost "hundreds of millions of dollars" in the scam.
The lawsuit covered individuals in the United States who purchased gift cards redeemable on iTunes or the App Store between 2015 and July 31, 2020, provided codes to fraudsters, and did not receive refunds from Apple.
In June 2022, Judge Davila rejected Apple's attempt to dismiss the lawsuit, stating that the plaintiffs had sufficiently alleged that Apple's disclaimers of liability, even after victims reported being scammed, were unconscionable.
Apple and the plaintiffs' lawyers have not yet commented on the settlement.
Apple has agreed to settle a lawsuit over its alleged involvement in a gift card scam.
Scammers would pressure victims into buying gift cards and sharing the codes.
Apple would deposit 70% of the stolen funds into the scammers' accounts and keep 30% as a commission.