Google Has No Duty To Refund Gift Card Scam Victims, Judge Finds (arstechnica.com) 72
A federal judge in California has dismissed most claims in a class-action lawsuit against Google over its handling of gift card scams, ruling the tech giant is not liable for millions in consumer losses. U.S. District Judge Beth Freeman found Google bears no responsibility for scam victims' losses since third-party fraudsters, not Google, induced the purchases.
The ruling came in a suit filed by Judy May, who lost $1,000 to scammers demanding Google Play gift cards for a fake government grant. The lawsuit cited Federal Trade Commission data showing Google Play gift card scams comprised 20% of reported gift card fraud between 2018-2021, totaling over $17 million in losses. Google earns 15-30% commission on gift card purchases but denies refunds, citing industry-standard policies. Freeman ruled Google had no duty to investigate reported scams or refund victims.
The ruling came in a suit filed by Judy May, who lost $1,000 to scammers demanding Google Play gift cards for a fake government grant. The lawsuit cited Federal Trade Commission data showing Google Play gift card scams comprised 20% of reported gift card fraud between 2018-2021, totaling over $17 million in losses. Google earns 15-30% commission on gift card purchases but denies refunds, citing industry-standard policies. Freeman ruled Google had no duty to investigate reported scams or refund victims.
Sympathy (Score:4, Insightful)
It's hard to sympathize with someone who is this gullible.
Did Google know?...like pawn shop stolen goods (Score:5, Insightful)
It's hard to sympathize with someone who is this gullible.
Did these organizations know their product was being used in a crime is the real question. If someone buys a Google Play Gift Card in a Wisconsin WalMart, but redeems it in the Emirates, to an account known to be involved with past scams, then that's pretty suspicious. You can make fun of the victim all you like, but remember, soon Generative AI will make it a lot harder to identify scams. They're going to unleash the full power of AI to generate perfect marketing materials and flood Google search with articles stating they're legit and flood reddit with discussions saying a site is legit. Scams are going to get a lot harder to identify in the near future.
Imagine Google was a pawn shop. Some young man comes in with lots of gold that a wealthy elderly lady would wear that was clearly burglarized...including a watch inscribed with someone else's name and a quick google shows that person's home was recently robbed. What would the law do?
I don't think companies should have fully liability for all scams, but if they know a scam is going on and fail to prevent action, yes, I think they should have to repay every cent of profit.
Re: (Score:2)
Google would not even lose money if they turned off the card before it's redeemed. My guess is that the overseas recipient is selling it on, so you can't really go by location. So a refund might be the only way to fix it. They could do the bare minimum and transfer the balance to a new card number if it hasn't been used yet.
The pawn shop example is a good one - but one that probably doesn't apply to digital goods. A legal loophole because laws are too old to cover it.
And there's no trigger for fraud if s
Re: (Score:2)
The pawn shop example is a bad one because it glosses over the actual problem. It assumes that the stuff is "clearly burglarized". Yes. If that's obvious, then it's the pawn shop's fault. But recognizing that is the difficult part. And no, coming to the shop with a bunch of old lady jewelry that you obviously wouldn't wear is not suspicious (if your home town doesn't look like a warzone) "That's not my style and I'm never going to wear that" is probably the most frequent reason why people pawn/sell their gr
Re: (Score:3)
If that's obvious, then it's the pawn shop's fault. But recognizing that is the difficult part.
You know the Pawn shop would be legally liable even if it was Not obvious. They might be innocent, but let's say for example it is later discovered that property in their inventory is stolen. In fact: the Pawn shop is still liable to turn over the stolen property If it ever does come to light later while in their possession, and would be guilty of a crime if they do not. The Pawn shop may still be sued
Re: (Score:1, Interesting)
Re:Did Google know?...like pawn shop stolen goods (Score:4, Informative)
had to sign a document that it was my property with my personal contact information so if I was doing something fraudulent, they wouldn't be liable.
The pawn shop would still be liable. It is good for them to have the document, but the documentation doesn't make the sale legal.
It just helps them avoid the criminal charges, And makes sure the pawn shop can sue the person who sold the shop the item after the police seize the item from their inventory.
Re: (Score:2)
Hell, we are already seeing it in my org.
We have seen a marked increase in the number of scams from senders impersonating valid local and national businesses. The messages appear very similar to standard marketing messages from these places including logos and messaging.
The main telltales are still the same (send address, destination links, etc) and can still be used to distinguish them, but they definitely will fool a lot more people.
Re: (Score:2)
Imagine Google was a pawn shop. Some young man comes in with lots of gold that a wealthy elderly lady would wear that was clearly burglarized...including a watch inscribed
It is a crime to receive and deal in stolen property with intention to sell it Or in fact any intention other than to turn it over to the authorities.
The trouble with the gift cards is they are not stolen. They are a piece of property legally purchased by the owner of the funds that was used to buy the gift card. And they work as be
Re: (Score:3)
Imagine this scenario instead: A scammer persuades you to go to the local pawn shop to purchase a gold coin, And then ship the gold coin to the scammer as a payment.
Then you find out it is a scam. Should the pawn shop be responsible to refund you for the gold coin? How come?
It's not any different from buying a Gift card and handing it to the scammer.
What this analogy leaves out is that the gold coin is only redeemable for purchases at the pawnshop itself. This arguably creates an incentive for them to turn a blind eye to abuses because they benefit from money being injected into their ecosystem.
I'm not personally convinced Google is liable here, but they are certainly more involved than someone selling a fungible bearer instrument like a gold coin.
Re: Did Google know?...like pawn shop stolen goods (Score:1)
Google is in receipt of stolen goods.
Just because they were obtained via fraud of a 3rd party, does it make them not liable, just like the pawn shop.
Re: (Score:2)
So what? Mens rea is necessary to make that an offense.
Re: Did Google know?...like pawn shop stolen good (Score:1)
Mens rea is necessary for an offence, but not necessary for liability.
Isn't that for a judge to decide? (Score:2)
Google is in receipt of stolen goods.
Just because they were obtained via fraud of a 3rd party, does it make them not liable, just like the pawn shop.
Aren't there existing laws for this? I am pretty sure Pawn Shops are required to comply with Law Enforcement and eat losses in the case of theft.
While I agree Google shouldn't have to make everything right in the world, if they're one of the world's largest companies and aiding fraud, I think we should probably adjust the laws to hold them more reasonably accountable. Common-sense would say they can't detect everything, but some stuff they can detect. If it was their money, they would definitely trac
Re: (Score:3)
How is it Google's fault if someone falls for a scam to use Google Play gift cards? Did Google tell the person to buy the cards? The person willingly bought the cards for the scammer.
The judge ruled correctly. Google had nothing to do with this and is not liable for people's gullibility and stupidity.
Re: (Score:2)
Agreed. I would settle for being privately gullible. Now there is public, record. So gullible and now embarrassed. If she had to pay the lawyer a dime up front, then she's also a repeat offender when it comes to being a fool. The case had no hope of being won, without redefining how debit cards work via precedent from this case.
Why should they? (Score:1, Troll)
This has been around since the first moron got an e-mail address.
No legitimate government has ever accepted gift cards as a payment method.
If you are stupid enough to fall for any of this, then you deserve to l
Re: (Score:3)
Re: (Score:2)
Re: (Score:2)
The fact that there is not legitimate party to pay you back doesn't mean you deserve to loose your money, sometimes life is unfair.
Saying the victim deserves to loose their money is con man talk, "if you where stupid enough to let me steal it you deserve to loose their money"
Re: (Score:2)
The one the actual culprits, not google.
I scowl when corpos get bailouts, but if I'm to remain objective that goes for commoners getting them too.
The difference in this scenario is that corpos are bailed out after gambling and losing; commoners would be bailed out of being defrauded. I'm sympathetic to the latter; despise the former.
Re: (Score:2)
If they lose their money, they might think twice before doing stupid stuff like that again.
Re:Why should they? (Score:4, Interesting)
My wife one time Googled a customer service number and ended up talking to a scammer. We are both sophisticated in this area. But it took her a few minutes to catch on.
I could easily see somebody not figuring it out until it's too late.
Re: (Score:2)
asking me to send them Zelle to clear myself as a suspect.
It's amazing anyone falls for that frequently enough to make the scam worthwhile.
Re: (Score:2)
Scam victims are still innocent (Score:2, Insightful)
It looks like I'm going against the grain here, but the US simply doesn't have robust enough consumer protection laws.
As people age, there are changes in the grey matter of the brain that cause them to be more trusting [ucla.edu] and more susceptible to scams. It's not just unhealthy people - it's all. It is not an inability to think. It's a physiological change. It has social advantages when someone is too old to take care of themselves and need help, but it happens even if you don't.
Google can make those cards w
Re: (Score:2)
That's a curious study. People get more trusting as they get older, while (anecdotally) also getting more racist and intolerant?
Re: (Score:2)
while (anecdotally) also getting more racist and intolerant?
Actually, to the contrary. Anecdotally, young people are more likely to be racist and intolerant. But those that are are less likely to openly acknowledge it. A more accurate statement would be that a lot of old people don't care what you think.
Its not clear to me that its the elderly are being preyed upon more often or if they are a more sympathetic media story victim. Is there some real data/information that suggests they are? It would certainly make sense that people with dementia might be more vulnera
Re: Scam victims are still innocent (Score:3)
Not sure they are getting more racist or intolerant. The racism 'appears' because they are still operating the same way as when they were younger, but society has changed. Once acceptable forms of discrimination are now being called out. Younger people are loving their lives different from what they were used to and it might just freak them out. The Old Folks would have reacted to these differences much the way they do now if it had occurred years ago.
Re: (Score:2)
Re: (Score:2)
Shipping usually takes more than a day. They can recall the shipment if it is already in transit. Nevermind that the consumer is also out the profit margins on the devices, where Google isn't. The fact is that if it was discovered before that phone was delivered Google still wouldn't do anything.
Separate but related issue: verifying card balance (Score:2, Offtopic)
It really was no good to me, so I tried selling it (at below face value). Tricky thing though: how could *I* prove to potential customers that the card was legit? As far as I could determine, the *only* way to know 1) if a card was legitimate and 2) what the available amount was is to...add it to your Google Play account.
Re: (Score:2)
How damn hard would it be to have a website where you could punch in the card's number, and get back some verification saying "Ah yes, this card is good for $X"?
Even full of CAPTCHAs that would be a huge target for automated attacks. Some retail gift cards get around this by having a PIN that's not required to verify balance. You only use the PIN when making a purchase or redeeming. That way, even an attack that returns a valid gift card number would still have to go through more checks at redemption.
Re: (Score:2)
There are third party websites that resell gift cards, they pay pennies on the dollar and are largely based on trust. They offer guarantees that the funds are there, etc, and I'm certain that they track bad players. I used to do retail arbitrage and this was a pretty good grift if the items our buyers wanted happened to be from a store I could use gift cards on. Some were discounted 12% or thereabouts.
As for your particular problem with Google Play gift cards, you can go to put it into your account where it
Why should Google be responsible? (Score:5, Informative)
I have to agree with the judge here. As far as Google can tell the purchase is legitimate: the person buying the card intends to buy it, their payment method is valid and legitimate, Google is giving a card worth the amount purchased to the person buying it. Google can't know what the person buying it's going to do with it after they receive it. They may suspect the person who finally redeems it is involved in something sketchy, but the card itself is perfectly legitimate.
It's the same as if you fall for a scam and send a check to the scammer before you realize it. You may have been scammed, but the check itself isn't fraudulent (you wrote it yourself, signed it and it's the person the check was written to who's cashing it). If the bank's already paid it it has no duty to credit your account back (unless the payee is on one of the government lists of people the bank isn't supposed to do business with).
If you're a grown adult and get scammed, that doesn't automatically make it someone else's responsibility to fix it.
Same rules as cash (Score:2, Insightful)
If someone steals your cash, or scams you into giving it to them, we don't require some third party--like a bank or merchant--to make you whole.
Re: (Score:2)
"It's the same as if you fall for a scam and send a check to the scammer before you realize it. You may have been scammed, but the check itself isn't fraudulent"
The difference is that Google recognizes a profit out of the damages of the fraudulent transaction.
The bank cashing the check neither gained not lost anything, they just transferred the total value of the check out of the depositor's account. In that case the criminal receives the total value and that is where you seek to recover the total value.
Goo
Re: (Score:2)
In what way is the transaction with Google fraudulent? The subsequent transaction with the scammer may be fraudulent, but the transaction with Google is completed by that point.
Re: (Score:2)
Given your low user ID, it’s clear you’ve been around Slashdot since its early days—long enough to recognize a deflection when you see one. Your arguments here seem designed to steer the conversation away from Google’s responsibility and oversimplify the situation, making it look like the onus is solely on the individual victims. With your level of Slashdot experience, it’s surprising to see such a disingenuous approach that downplays the very real accountability that platforms
Re: (Score:2)
Yes companies like Google take on responsibility for fraud detection, just like credit-card companies do. But if you buy something valuable with a credit card and then go and send it to a scammer and realize you're now out the money you paid, is the credit-card company responsible for deciding that your original purchase was problematic? No. Because nothing about your purchase of the item was at all problematic. The same with Google. If Google flagged every purchase of a gift card (or even just those where
Re: (Score:2)
Google has the technology to detect certain scams and could warn users of high-risk transactions.
Google having the ability does not produce a legal obligation to do so. It's not up to the court to decide if Google ought to do something, only if it must do it. And there's no law forcing Google to do this.
Re: (Score:2)
I agree with this as well. You can't sue the bank if someone robs you on the street after you pull money out of an ATM.
The transaction you made was legitimate. People DO actually send gift cards over seas to relatives as gifts and for other things for legitimate reasons. So, google has no way to know the intentions of the person who redeems the card.
In fact, it might not be the scammer either, they potentially plan to resell the card to someone else, and that person has no idea the card was scammed, potenti
What was you first clue? (Score:4, Interesting)
The ruling came in a suit filed by Judy May, who lost $1,000 to scammers demanding Google Play gift cards for a fake government grant.
That is one dumb Judy. It may be victim shaming, but she deserves it.
And then it is Google's fault? The mind reels...
Re: (Score:2)
Re: (Score:2)
Even if you enforced a purchase/redemption geographic lock, they'd just set up a throwaway shell company in that region and use that. We make it shockingly easy for that to happen.
Money Laundering (Score:2)
Re: (Score:2)
Re: (Score:2)
The cards aren't used in other countries. They are resold for cash at a significant discount.
Why would someone pay for a card they weren't going to use?
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
If someone redeems the gift card they thought was legitimate, but later it is found to be stolen, what do you do? Take the funds from the persons account? Put them in the negative? Refund their purchases from the gift card?
The bike you can recover. It's much more difficult to recover the giftcard value unless you tell that person 'You have to pay 100$ for the 100$ gift card you paid for because it was stolen.".
How do you recover goods that aren't physical so don't actually exist? Refund the game they bought
Re: (Score:2)
There is an economical problem with that where people would stop using gift cards immediately
That is a business model problem, not an economics problem. Since Google is in the business of selling gift cards presumably that is one of the costs of doing business t
Re: (Score:2)
So if someone is scammed and is told to buy a car and then give the car to the scammer, the dealership is on the hook?
You have two choices. You're responsible to make your own purchases, or you're not. You won't like the world where they decide you're not.
You can punish the scammers, that's what you need to focus on, not making someone else responsible for it because it's too hard to go after the scammers.
Re: (Score:2)
So if someone is scammed and is told to buy a car and then give the car to the scammer, the dealership is on the hook?
If they take the car in trade-in? Yes. That's the way it works. Its stolen property. Its not like the "gift card" can be used without Google paying the holder.