Google Illegally Pockets Money Stolen in Play Store Gift Card Scams, Class Action Alleges

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A proposed class action lawsuit accuses Google of having kept millions in stolen money from victims of Google Play Store gift card scams. 

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The 38-page complaint says that Google, for nearly a decade, has knowingly pocketed money stolen by way of common gift card scams, even from consumers who have contacted the tech giant directly and provided it with information needed to identify and return the stolen funds. Google has done this despite having acknowledged that Google Play gift cards are often used by scammers to steal money from regular consumers, the lawsuit alleges. 

“Google’s practice of knowingly keeping stolen funds is, standing alone, unfair,” the suit contends. “It is also, standing alone, unlawful.” 

As the lawsuit tells it, the first step in a “typical” Google Play gift card scam is to convince the victim to purchase a Play Store gift card and share the code on the card so that they can pay for something outside of the Google Play Store. If a scammer successfully convinces a consumer to do this, the case says, they will often demand that the victim buy more Google Play gift cards and share those codes as well. 

Once a scammer has a Google Play redemption code in hand, the filing continues, their next move to obtain money is to redeem the gift card and transfer the stored value from the card into a Google account, which can be used for purchases from the Google Play store and in-app purchases. Digital items bought via in-app purchases can then be sold on third-party markets, the suit says, noting that, in this situation, Google earns a commission from the in-app purchase while the scammers “profit by reselling their in-app purchases.” 

Alternatively, a scammer can resell the redemption code from a Google Play gift card, the case goes on. When this happens, the buyer of the redemption code is the one who redeems the money on a Google Play gift card into their Google account, the suit mentions. Though this method, for more than one reason, is “less profitable” and less common than the former, Google nevertheless earns a commission when a scammer resells a gift card redemption code, the lawsuit says. 

Per the complaint, a Google account that redeems a stolen gift card, which “is nearly always controlled by the scammer,” will spend the stored value of a card on digital content, namely apps or in-app purchases. By this point, the filing stresses, Google has several key data points about the apparent scam, including the store where the gift card was bought, along with the date and time of purchase; the amount stored on the card; the identity of the Google account used to redeem the card; and the nature and timing of any Play Store purchases made with the gift card. 

All told, when a purchase is made in the Google Play Store with stolen gift card funds, Google will pay the app developer 70 to 85 percent of the purchase price for the digital goods and retain the rest for itself as a commission, regardless of whether the gift card is redeemed and spent by the scammer or by a third party who bought the stolen gift card redemption code, the suit alleges. 

The case goes on to share that when a gift card scam victim contacts Google, which often occurs before any of the stolen money has been paid out to developers, the defendant at that point is made aware that the money from a particular gift card has been stolen, and that scammers are attempting to “launder” it through the Play Store. However, Google “neither returns [the money] nor informs the rightful owner of its whereabouts,” and effectively discourages scam victims from contacting the company, the suit alleges. 

“Instead, Google represents it has a ‘no refund’ policy. Google states on its cards and packaging that its gift cards are not refundable, and directs victims to its Online Terms of Service, in which Google states that it is ‘not responsible if a Gift Card or Credit is lost, stolen, destroyed or used without your permission.’”

The lawsuit says that Google, despite possessing ample resources and technology that could be used to aid fraud victims, uniformly represents that there is nothing it can do in the event of Play Store gift card fraud.  

The case looks to cover all persons in the United States and its territories who, between January 1, 2015 and the present, bought one or more Google Play gift cards “at the direction of people whose identities they did not know” and did not redeem the gift cards for themselves or give them as a gift but instead provided the redemption codes to the people whose identities they did not know and were not refunded the money they paid for the gift cards by Google or any other source. The suit also looks to cover all individuals who fit the aforementioned criteria and who contacted Google and reported the scam. 

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