Apple To Settle iTunes Gift Card Scam Lawsuit

By Chris Thompson

According to Reuters, Apple recently agreed to settle a class action lawsuit through settlement. The lawsuit accuses Apple of knowingly allowing scammers to take advantage of its gift cards and keep the stolen funds for itself.

Apple filed a document with the federal court in San Jose, California, on Wednesday, stating that after the mediator intervened, it had reached an agreement with the plaintiff on substantive settlement terms.

The parties are drafting a formal settlement agreement to be submitted to U.S. District Judge Edward Davila for preliminary approval.

Apple and the plaintiffs’ attorneys did not immediately respond to requests for comment.

In this lawsuit, the plaintiff stated that the victims received a phone call that gradually made them panic and urgent, asking them to go to nearby retail stores (convenience stores, electronic product retailers, etc.) to purchase App Store and iTunes gift cards or Apple Store gift cards.

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After the victim purchases the gift card, the caller will ask for the code on the back of the card over the phone in order to make payment.

The plaintiffs argued in the lawsuit that Apple knowingly deposited 70% of the stolen funds into the fraudsters’ bank accounts and kept 30% for itself in exchange for commissions.

The complaint alleges that victims likely lost “hundreds of millions of dollars” in the scam.

The lawsuit covers anyone in the United States who purchased gift cards redeemable on iTunes or the App Store between 2015 and July 31, 2020, provided the code to fraudsters but did not receive a refund from Apple.

The plaintiffs fully allege that the Cupertino, California-based company’s refusal to take responsibility even after victims claimed they were defrauded was unconscionable.