back to article Lawsuit claims gift card fraud is the gift that keeps on giving, to Google

Google has been accused of profiting from gift card scams. A class action complaint [PDF], filed Tuesday in federal court for the District of Northern California, claims that "Over nearly a decade, Google has knowingly kept millions of dollars in stolen money from victims of gift card scams who purchased Google Play gift cards …

  1. Rikki Tikki

    To sum up ...

    Google Play gift cards are poison ...

    1. Sora2566 Bronze badge

      Re: To sum up ...

      They may well be, but I still preferred using them to giving Google my credit card details.

      1. js6898

        Re: To sum up ...

        Agreed - which is why I don't use Google Pay (I use Samsung Pay)

        1. Killfalcon Silver badge

          Re: To sum up ...

          It still goes on my phone bill, I think. It's good to have options.

    2. doublelayer Silver badge

      Re: To sum up ...

      Not a very good summary, really. It comes to the difficult question of, when someone has been scammed out of money and the scam has succeeded in sending money to the scammer, then who should pay the cost for money that cannot be recovered from the scammer. There are a few other situations involved which are more clear, but the tricky one is the one I list above. Google is not the only place that has instruments that can be abused in such a way.

      1. Anonymous Coward
        Anonymous Coward

        Re: To sum up ...

        Google (and many other businesses like phone companies) are receiving the proceeds of crime. It's very simple. The money is stolen. Googles 30% is also stolen.

        If I buy a car that turns out to be stolen, I have to give it back to the original owner.

        At a minimum Google has to return it's 30%. But the App sellers also have to return their 70%, and Google can enforce that. If this was small time crooks and private citizens the situation would be perfectly simple and unambiguous.

        1. Killfalcon Silver badge

          Re: To sum up ...

          I think there's a bunch of technical, nitpicky law things in the way there.

          1) proceeds of crime - most places don't actually have laws on that, weirdly, and when they do they tend to be very specifically written (I think the UK one is one of the broadest, mind).

          2) stolen goods - turns out that if you personally walk into a shop and buy something with your money and give it willingly to someone, that's not theft. Morally, of course if fucking is. Legally, it's in a different bucket where the laws are written as much to stop unhappy customers from having the local grocer arrested. Fraud is different to theft, and modern anti-fraud laws just aren't built around this kind of thing.

          Genuinely, this is an area that requires competent legislation. If someone can draft some legalese to make this sort of scam *into theft*, without me being able to get you arrested by mailing you a giftcard and faking some text messages, then it would suddenly become a *massive* problem for Apple/Google/etc that they were suddenly on the hook for a lot of this shit. That would probably incentivise them to do something about it, but I'm not smart enough to guess at what that'd look like.

          1. samzeman

            Re: To sum up ...

            Honestly it plays into the bigger issue of faking digital evidence.

            If sources disagree (e.g I have no texts on my phone, you have your faked texts) the only 'reliable' source is the network provider, perhaps, which is a problem when you're trying to sue Google, the (payment) network provider, and it's in their interest to tamper with evidence. Not that they would dare probably, but laws aren't meant to leave things to "they surely wouldn't dare....".

            If texts can be faked, and the only person who can verify texts in most trials is the one actually being accused, you basically need multiple sources agreeing on the texts (so the scammer's phone and your phone?) to lend some credibility to it.

            There also doesn't seem to be an incentive for the gov to make this legislation yet. The pressure seems to be on banks to remind you that scams are a possibility. Our modern lawmaking seems to have a libertarian bent where if you're deceived into making a mistake with your money it's your own fault.

        2. jmch Silver badge
          Boffin

          Re: To sum up ...

          "Google (and many other businesses like phone companies) are receiving the proceeds of crime. It's very simple. "

          No, I don't think it's as simple as that. Google are not making money at the point that the card is redeemed, they do it at the point of sale, ie if I buy a $50 Google Play card, that $50 minus a small seller commission goes to Google, and I am in possession of a 1-time code that grants me $50 worth of goods on Google Play. Once the code is redeemed eg by buying an App off Play Store, Google will send 70% of the purchase value to the developer and keep it's usual 30% fee. But there is really no way that Google can police whether a code entered into Play has been scammed off the original purchaser.

          Maybe Google need to make it much clearer on the packaging etc that the card is only redeemable in the Play Store, code is valid once only, and absolutely not to give the code to anyone else (or to be aware that giving someone the code is equivalent to giving them the card value). And there should be better mechanisms for users to for example block gift card purchases linked to their accounts. But if a scammer convinces me to give them the code, I am the one being scammed, so if the money isn't recoverable from the scammer, why should Google cover it? Look at it another way, if Google were to refund the value of the card to anyone who said "hey I bought a card but someone scammed the code off me", it would be an invitation for scammers to make such fake claims themselves directly to Google.

          Now, there is one other issue to raise, which is if Google's voucher system is generating codes that are guessable - then fraudsters can guess a code, and use it if it is correct, active and not redeemed yet. If that is the case it is certainly Google's responsibility (but in that case it's a serious flaw that would destroy the whole voucher business)

        3. doublelayer Silver badge

          Re: To sum up ...

          It often doesn't work like that. Let's say that I am a criminal and I convince you to give me some cash. That crime I just committed was more likely to be fraud (I lied to you to get you to willingly hand over money) than theft (I took money from you against your will). Either way, though, that money is the proceeds of crime and you should have it back. If I get caught, they'll try to take it off me and give it back to you. If I spend it somewhere, you don't automatically have a claim against wherever I spent it. Frequently, you still have to try to recover the money from me directly. The exception to this is when the place I spent it knows that they are receiving something I have no right to give them, but most merchants are not accessories to the crime.

          This is where the law is unclear and where the ethical question is even less clear. It is not as simple as you have painted it, and attempting to implement a law that works as simply as you have described it will break things.

    3. Richard 12 Silver badge

      Re: To sum up ...

      Google Play is only about 20% of the gift card scam market.

      What's the rest?

      How big is the Apple gift card scam market now that it's been a few years since they settled? Have they done anything the court can point to and tell Google to do as well?

      Or did they do nothing, thus telling Google to do nothing?

      1. DS999 Silver badge

        Re: To sum up ...

        I know Walmart and Lowes gift card scams are fairly rampant. Really any big company that a lot of people will use means their gift cards are effectively "cash" to people. I'm sure Amazon gift cards are huge for scams, probably big grocery chains (at least regionally in the areas that have those stores) because everyone buys groceries.

        1. Anonymous Coward
          Anonymous Coward

          Re: To sum up ...

          Amazon gift cards are (or were) being given out by some companies in return for 5-star reviews... Taking money from someone illegally isn't the only gift card scam these days.

          Walmart cashiers (in theory anyway) are taught to be suspicious of large purchases of gift cards, but some don't care enough to bother questioning them. Much like the one person who seemed to be using Money Orders from Walmart to pay their employees (probably under the table)... there are methods for reporting such things. He told me he didn't feel comfortable answering all the questions I was asking, and never came back, but perhaps his employees got paid in a more official manner afterwards.

      2. Phones Sheridan Silver badge

        Re: To sum up ...

        "How big is the Apple gift card scam market now"

        Weekly I get an email from "Dad" asking me to go buy him 5 x £50 apple gift cards and reply back with the codes when I have. For me the first request was not out of the ordinary, I'm his tech son and he often relies on me for his tech purchases. The dead giveaway was that he'd changed his name to webmaster@topunigirls.com without telling me (NFSW site, don't visit it).

        1. Not Yb Bronze badge

          Re: To sum up ...

          Mom keeps telling me that the next time her "grandson" calls up for money she's just going to tell them he's a good-for-nothing waste of space and not to call again. (She has no grandchildren, yet...)

      3. Killfalcon Silver badge

        Re: To sum up ...

        Steam is a really common one too. It's a global distributor, so they can always find local buyers who'll buy a $10 steam credit for $5 and be very happy with their cheap games. Or they can buy games directly and resell the keys - supposedly some of the 'cheap' steam-key resellers get stock this way, but I would have thought that'd be traceable, but it is at least not an option with google/iTunes stuff that doesn't let you resell products.

  2. xyz123 Silver badge

    Google, Apple AND Amazon have all point-blank refused to allow gift card purchases to be permanently blocked on their systems.

    Because Amazon makes over 1.5 BILLION a year pure profit, Google 433 million and Apple's scam profits are off the charts into the double digit billions.

    They could easily add a tickbox "DO NOT ALLOW GIFT CARD PURCHASES" and make it so unticking the option starts a 7day countdown to re-enable, but they refused.

    1. Mage Silver badge
      Coffee/keyboard

      "DO NOT ALLOW GIFT CARD PURCHASES"

      The problem is that in fact the opposite. Google refuses to redeem valid cards.

      Also Google treats your payment method like a Direct Debit. You have to go to web page, not playstore, to end it and also get the payment provider to remove Google. Also it's suggested in T&C that they may then block gift cards if you cancel a payment method. Yet, Gift cards are suggested by Google as the sole cash payment method.

      1. Not Yb Bronze badge

        Re: "DO NOT ALLOW GIFT CARD PURCHASES"

        Google Play's app installer keeps asking me to set up a payment method on my accounts, I keep hitting "skip". So far, so good!

  3. Mage Silver badge
    Devil

    How much fraud by who?

    Get the sales receipt and the validation receipt from the gift card giver or you can never redeem it.

    In 2015, Google was sued for allegedly refusing to redeem Google Play gift cards once the balance dropped below $10. That case appears to have been settled…

    They won't say why an account is blocked once they admit the card is valid. It looks like they still block redemption for any account with no other payment method, or no balance. Four accounts tried. Eventually Google unblocked one, but never explained what the issue was. You need to email everyday for a few weeks and send photos of receipts and card.

  4. navarac Silver badge

    Working in retail

    When a relative worked in a "large UK Supermaket", anyone asking for, or trying to purchase a unusual £ amount of gift cards (any sort, but usually they were Apple or Amazon), would automatically ring the "alarm bells". She said it was very often obvious that the person concerned was the victim of potential scam, as they were usually noticeably nervous and not buying anything else. They made it as difficult as possible for them to buy that amount and generally called security to gently question them.

  5. mark l 2 Silver badge

    A friend of mine was given a Amazon gift card for their birthday but didn't particular want anything from Amazon at the time, but saw they had Costa gift cards for sale on Amazon and as they regularly went into Costa they figured it they could make use of that.

    But apparently buying another gift card with an Amazon gift card balance goes against their T&Cs, so Amazon cancelled their order and refused to refund the amount back to their Amazon account, so they lost £20 worth of money from their gift card.

    The moral is if wanna give someone a gift card they can spend on Amazon? Don't! Just give them cash which they can spend in pretty much ANY business without specific T&Cs on what is allowed or not.

    And if you must buy from ScAMazon at least if you pay with a credit or debit card so you can contact your bank if you have any issues, but using an gift card leaves you high and dry when the company that issues the card set the rules on how to use them.

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