Some have suggested that the true sum is likely around 10 times the official estimate.
However, this estimate is based only on reported cases, so the true amount is likely very much higher, as many victims are too embarrassed to admit that they have fallen for a scam. The Federal Trade Commission estimates that gift card scams cost victims $30M in 2020, and around a quarter of these involve Apple cards. “Apple stands to benefit from proliferation of the scam, that Apple is fully capable of determining which accounts redeemed the stolen gift card funds and preventing payout of those funds and that Apple nevertheless informed Martin, Marinbach, Qiu, and Hagene that there was nothing it could do for them despite those plaintiffs’ prompt notification of the theft,” Davila wrote in the 28-page decision. District Judge Edward Davila dismissed some of the claims from a class of plaintiffs that said Apple aided in the fraudulent schemes, but he did say plaintiffs plausibly alleged the company did receive some of the proceeds from the fraud and failed to appropriately reimburse the victims. A judge has now refused this motion, allowing the case to proceed.Ĭourt House News reports that most of the 11 counts in the claim were dismissed, including the claim that Apple aided in the scams, but two key ones remain: That Apple benefits from the scams, and that the company can do more to help victims.Īpple will have to face claims the company profited off of criminal enterprise schemes featuring stolen gift cars after a federal judge declined to dismiss claims the company benefitted monetarily from sophisticated schemes that employ fake apps to swindle consumers. Court rulingĪpple filed a motion for the case to be dismissed on a number of grounds, one of which is that gift cards are sold with a published refund policy which says no refund is possible after a card has been redeemed. Many scam victims are elders, so three of the eleven counts accuse Apple of being in violation of laws designed to protect elderly people from financial abuse. During this time, the company is in a position to refund 100% of the card value.Īdditionally, Apple takes a 30% commission, so would always be in a position to refund this much, even after the scammer has been paid In fact, Apple holds 100% of the funds for a period of 4-6 weeks, between the apps being purchased and Apple paying the developer. The lawsuit says that Apple tells scam victims there is nothing that can be done once the money has been spent, but argues that this isn’t true. The lawsuitĪ number of victims filed a class action against Apple back in 2020, arguing that in the case of iTunes cards in particular, the company is in a position to refund some or all of the money, but refuses to do so. Variations on the scam include claims that a relative or friend in distress needs urgent assistance, or that the victim will be taken to court for an unpaid bill. iTunes gift card scams usually work in a slightly different way, typically being used to buy paid apps owned by the scammers, so they receive 70% or 85% of the money when paid by Apple.Įither way, the cards are either immediately or very quickly used, at which point the victim’s money is gone. With store cards, the scammers usually buy high-value products like laptops and smartphones, which are then sold. What happens next depends on the type of card. However, some people are so panicked that they are taken in by the scam and buy the cards. This ought to clearly signal that it’s a scam: The IRS would of course never demand payment via gift cards.
#Itunes gift card how to#
When asked how to arrange payment, victims are asked to buy Apple gift cards (either Store or iTunes cards), and then pass the details to the caller. They are told that there is a problem with their tax filing, and that unless the matter is resolved immediately, they face arrest. A victim receives a phone call from someone claiming to work for the Internal Revenue Service (IRS). Apple asked for the case to be dismissed, a motion which has now been denied …Ī typical Apple gift card scan works like this. The scam victims filed a class action lawsuit alleging that Apple profits from the fraudulently obtained cards, and is in a position to block the use of them and refund purchasers. Apple gift card scams are one of the most common tactics of scammers impersonating the IRS, and a judge has now agreed with a group of victims who argue that Apple benefits from these scams, and ought to do more to help.
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