Apple Settles Lawsuit Tied To iTunes Gift Card Scam

Apple Inc AAPL has agreed to a settlement in a lawsuit alleging the company’s involvement in scams utilizing its gift cards and withholding stolen funds.

What Happened: Apple and the plaintiffs have come to a settlement agreement through mediation. The formal settlement document is presently in the works and is set to be submitted for preliminary approval to U.S. District Judge Edward Davila, according to a Reuters report.

The scam in question involved con artists persuading victims to buy App Store and iTunes gift cards or Apple Store gift cards to pay for taxes, bills, bail, and debt collection. Despite warnings on the cards against sharing codes with others, victims were instructed to provide the gift card codes. Apple allegedly transferred only 70% of the stolen funds into the scammers’ accounts, keeping 30% as a “commission” for converting the stolen codes into cash. The lawsuit claims that victims lost “hundreds of millions of dollars” in the scam.

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The lawsuit covers anyone in the United States who purchased gift cards redeemable on iTunes or the App Store from 2015 through July 31, 2020, gave codes to scammers, and did not receive refunds from Apple.

Why It Matters: This settlement follows a series of legal troubles and challenges for Apple. Last year, in August, the tech giant agreed to a $500 million settlement in the ‘Batterygate’ lawsuit. The lawsuit accused Apple of covertly slowing the performance of certain iPhone models, leading to consumer frustration and mistrust.

In December, Apple faced a hefty antitrust fine from EU regulators due to its feud with Spotify Technology SPOT.

Around the same time, the company also settled the Family Sharing class action lawsuit for $25 million. First filed in 2019, this class action lawsuit accused Apple of misrepresenting how app subscriptions work with the family sharing feature.

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Image Source – Shutterstock


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