Apple Sued for Not Taking Action Against iTunes Gift Card Scams

Recently, Apple was sued for not taking the proper action against iTunes gift card scams. According to the court documents, Apple has to deal with a class-action lawsuit from seven customers who are criticizing Apple for enabling an iTunes gift card scam to steal hundreds of millions of dollars from the users, after knowing about the scam.

This is a type of scam that pretends as an IRS agent and asks the users to make payment through the iTunes gift cards. The security experts affirmed, these scams are quite often, and they occur to steal money differently, and these scams have been targetting peoples for many years.

iTunes gift card scam – a million-dollar scam

This iTunes gift card scams started happening after Apple launched a gift card facility for the iTunes store. The experts asserted that this scam could be done in several ways, but most of the threat actors prefer the same procedure. 

In this type of scam, initially, the scammer calls the user telling him/her about the urgency, and they say to the user that they have a limited time to carry out the gift card procedure.

After convincing the user, the threat actor tells that the procedure needs payment for stuff like taxes, hospital bills, bail money, debt collection, and service bills. And then, they ask victims to purchase an iTunes gift card from a social retailer and transfer the card’s serial code along with the card PIN to the scammer as evidence of payment. 

Once the users do all the procedures, the threat actors get all the money that they have stolen from the user.

Causes of action

As per the Court Document, there are a total of eleven causes of action, and here they are mentioned below:-

• Violation of the California consumers legal remedies Act
• Violation of the California unfair competition law
• Violation of the California false advertising law
• Breach of contract
• Money had and received/unjust enrichment/restitution.
• Breach of the implied covenant of good faith and fair dealing
• Aiding and abetting intentional torts
• Violation of the California elder abuse law
• Violation of the elder abuse law od other states
• Violation of the Oregon elder persons and persons with disability abuse prevention Act
• Declaratory judgment

Methods used by the scammers

The security experts mentioned in their reports that the scammer used several methods to carry out their scams, but among them, there are three standard methods that are used by most of the scammers:-

• Initially, the scammer uses funds to buy the desired Apple device.
• They also buy perks or digital currency in an app or game they have set up with the help of the funds, thus creating real-world profits for a company they held or have partnered with.
• The scammers resell the gift card code and PIN to other criminals after stealing them from the users.

Here, the threat actors scammed the total amount of value from users is almost $1 billion, which implies that $300 million would have arrived in Apple’s pockets. 

Among all other gift card scams, the FTC stated that iTunes cards valued for 23.7% of all claims in 2018, and it’s one of the high rated scams till now.

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