Apple has agreed to resolve a US lawsuit alleging that the Cupertino-based tech giant knowingly permitted scammers to misuse its gift cards, even retaining a portion of the pilfered funds.
As reported by Reuters, Apple and the plaintiffs, with the assistance of a mediator, have reached substantial settlement terms, as outlined in a recent filing in a San Jose, California federal court.
The parties engaged in the lawsuit are reportedly formulating a formal settlement for preliminary approval by US District Judge Edward Davila.
How fraudsters employ Apple’s gift cards to ensnare users
In this scheme, scammers pressure victims over the phone to purchase App Store and iTunes gift cards or Apple Store gift cards, claiming it’s for taxes, hospital bills, utilities, bail, or debt collection. This tactic aims to induce panic or a sense of urgency in their victims.
Subsequently, the fraudsters request victims to divulge the codes found on the backs of the cards. Notably, the cards carry a cautionary message: “Do not share your code with anyone you do not know.”
According to the lawsuit, Apple typically transfers 70% of the pilfered funds to the fraudsters’ bank accounts, retaining a 30% “commission” for itself.
The lawsuit contends that Apple “knowingly” permits scammers to convert stolen codes into currency, resulting in victims likely losing “hundreds of millions of dollars.” It applies to anyone in the United States who purchased gift cards redeemable from iTunes or the App Store from 2015 to July 31, 2020.
To qualify for settlement claims, users must submit proof of providing these codes to scammers and evidence of not receiving refunds from Apple.
The remarks made by the U.S. judge regarding the lawsuit
In June 2022, Judge Davila in the U.S. denied Apple’s request to dismiss the lawsuit, stating that the plaintiffs presented ample evidence of how the company disclaimed liability, which the judge deemed “unconscionable.”
