Apple faces allegations it profited from stolen gift card scheme

What do you want to know

  • A judge has dismissed most lawsuits against Apple for gift card scams.
  • However, the company will face charges over whether it took advantage of the scheme.
  • A court found that Apple may have benefited from the schemes by refusing to refund the fraudulent funds.

A judge says Apple will face allegations that it benefited from a stolen gift card scheme because it refused to refund the fraudulent funds.

As reported by Courthouse News Service on Tuesday:

Apple will face allegations that the company profited from criminal enterprise schemes featuring stolen gift cars after a federal judge refused to dismiss claims that the company benefited financially from sophisticated schemes that use fake apps to defraud consumers.

A district judge dismissed most of a lawsuit against Apple, but said “the plaintiffs plausibly alleged that the company received a portion of the fraud proceeds and failed to repay the victims appropriately”.

In a written judgment, Judge Edward Davila ruled that Apple “should benefit from the proliferation of the scam” and was fully capable of determining which accounts redeemed the stolen gift card funds to prevent them to pay, but chose not to.

The scammers targeted victims by giving “an urgent reason” to hand over the money, encouraging people to buy gift cards and provide the codes, before selling the funds or spending the money.

One of the scams involved scammers spending the stolen funds on apps hosted on Apple’s App Store that they themselves owned as a means of transferring stolen funds. Apple would have received some of the money from these transactions due to its 15/30% fee on the App Store.

A judge disagreed with Apple’s argument that it could only operate within its stated refund policy and said that “by refusing to refund the fraudulent funds, Apple prevented them from taking possession of their property and, in fact, benefited from the perpetuation of the scam. “

The case will now move on to the discovery and production of documents.

In April, a man was sentenced to 60 months in prison and ordered to repay $1.26 million by the DoJ for a gift card scam that saw him issuing thousands of dollars in card funds- fraudulent gift by stealing point-of-sale devices from Apple store employees and then issuing credits in his own name.

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