Google Kept 'Millions' of Dollars in Stolen Money From Gift Card Scams: Complaint

Google plays a “direct and vital role” in gift card scams by allowing cards it knows “were involved in fraud to be redeemed and spent on digital currency and/or digital products which scammers can resell for currency,” alleged a fraud class action Tuesday (docket 5:24-cv-01314) in U.S. District Court for Northern California in San Jose.

For nearly a decade, Google has “knowingly kept millions of dollars in stolen money from victims of gift card scams who purchased Google Play gift cards,” even though some theft victims have contacted the company and provided it with the information necessary to “identify and return their stolen funds,” alleged the complaint.

The company profits from the scams by depositing a percentage of the stolen money into Google Play developer accounts, “while unfairly and unlawfully retaining the remainder of the stolen money as its own commission of approximately 15%-30% of the face value of the gift card,” the complaint alleged. The company sometimes withholds payments for purchases made with scammed gift cards from Google Play developers and “retains 100% of the stolen money for itself,” it said.

Judy May of resident of Brownsville, Indiana, bought $1,000 in Google Play gift cards in April 2021 as a result of the scam, said the complaint. She received a link from someone purporting to be a family member instructing her to connect with a government agent for grant money she was eligible for from the Department of Health and Human Services. The agent told May that to receive the grant by same-day delivery, she had to cover certain costs, which would be reimbursed to her atop the grant money, it said.

The agent told May to buy Google Play gift cards on April 1, 2021, and provide the codes on the back to cover costs, the complaint said. May bought a $200 gift card from a Family Dollar store in Connersville, Indiana, and gave the code to the scammer, it said. The next day, she was instructed to buy additional cards to cover the remainder of the costs, so May bought four more cards from a CVS location in the same town and again shared the code with the scammer.

May was unaware of Google Play gift card scams and didn’t realize at the time she bought the cards that she was being duped, the complaint said. If the packaging had “clearly and prominently advised purchasers of the nature of gift card scams and/or stated unequivocally that anyone asking for payments via Google Play gift cards was a scammer,” May wouldn’t have bought the cards, it said. But no such information appeared on the packaging or the cards, it said.

When May contacted her relative about the agent she had spoken to, she learned then the person wasn’t a government agent at all, and she was victim of a gift card scam, the complaint said. May contacted Google to report the scam, but Google told her there was nothing the company could do, and it would not refund the money she paid for the cards.

May asserts claims of unfair and unlawful practices in violation of the California Unfair Competition Law, unfair practices and unlawful practices in violation of the California Consumers Legal Remedies Act, violation of stolen property provisions of the California penal code, plus conversion, She requests actual, general, special, incidental, statutory, punitive and consequential damages, and restitution for her and the class; pre- and post-judgment interest, attorneys’ fees and costs.

May also seeks injunctive or declaratory relief, including an order requiring Google “to refrain from seeking to enforce the Google Play gift card terms and conditions on victims of gift card scams who did not redeem the Google Play gift card, and to refrain from transferring any money to Google Play Developer accounts associated with gift card scams,” the complaint said. Google isn’t commenting on the lawsuit, emailed Public Policy Manager Jose Castaneda Wednesday.