A federal judge has dismissed a proposed class action lawsuit against Google, which accused the company of illegally profiting from Google Play gift card scams, Reuters reports.
The plaintiff, Judy May, claimed that Google had refused to refund millions of dollars stolen from victims of scams, where fraudsters tricked people into purchasing Google Play gift cards. However, U.S. District Judge Beth Labson Freeman ruled that May did not prove that Google caused her losses or knew it was receiving stolen funds.
May, who lost $1,000 in a scam in April 2021, was persuaded by a fraudster pretending to be a relative, who instructed her to buy Google Play gift cards to access federal grant money. The scammer then used the codes from the cards to make purchases. May argued that Google should have warned consumers on the card packaging about the risk of scams, particularly advising that anyone demanding payment via gift cards is likely a scammer.
Judge Freeman stated that Google was not liable for retaining its 15% to 30% commission on purchases made with the stolen gift cards, as the company’s conduct was unrelated to the fraud itself. While the judge allowed May the option to refile the lawsuit, she dismissed a claim for triple damages.
In 2023, the Federal Trade Commission reported that Americans lost $217 million to gift card and reload card fraud, with Google Play gift cards accounting for approximately 20% of these scams. However, the actual amount is believed to be much higher, as the data only covers reported cases.
