Apple settles lawsuit for iTunes gift card scam

In welcoming the new year, Apple has embarked on the resolution of yet another legal challenge, reportedly reaching an agreement to settle a lawsuit related to a scam associated with its iTunes gift cards, as outlined by Reuters.

The lawsuit had asserted that Apple, the iPhone manufacturer, knowingly permitted scammers to exploit its iTunes gift cards, allowing them to retain stolen funds. Notably, this is not the first instance where scammers have targeted iTunes. In November 2011, malevolent actors employed a deceptive email on the eve of Thanksgiving in the United States, ostensibly offering $50 in credit for the iTunes Store. However, the email concealed malware capable of seizing control over a user’s system.

According to the complaint, Apple was accused of depositing only 70 percent of the pilfered funds into the bank accounts of fraudsters, while retaining 30 percent for itself as a “commission” for knowingly converting stolen codes into currency. The complaint suggested that victims incurred losses amounting to “hundreds of millions of dollars” due to the scam.

This legal action encompassed individuals in the United States who, from 2015 through July 31, 2020, purchased gift cards redeemable on iTunes or the App Store, provided codes to fraudsters, and did not receive refunds from Apple.

In June 2022, Judge Davila rejected Apple’s attempt to dismiss the lawsuit, emphasizing that the plaintiffs had adequately alleged that Apple’s attempt to disclaim liability, even after victims reported being scammed, was unconscionable, as reported by Reuters.