Google is off the hook: it is not responsible for Google Play gift card scams

Gift card scams are a very popular tactic worldwide, where scammers trick people into buying the cards and providing the codes they contain so that criminals can access the money without leaving a trace.

Companies like Google, for which Google Play gift cards represent a large part of the business pie, take a commission on these gift card purchases ranging from 15 to 30% per purchase. And now a federal judge says that Google has no responsibility in the scams with all that it implies.

A federal judge dismissed a proposed class action lawsuit accusing Google of illegally profiting from Google Play gift card scams by refusing to refund millions of dollars stolen from victims https://t.co/OGT0W6mRIL pic.twitter.com/Xn8jrel5gR

— Reuters Legal (@ReutersLegal) November 5, 2024

Story of a scam that led to a federal complaint

The story begins in April 2021, when Judy May, a resident of Brownsville (Indiana), was the victim of a scammer who pretended to be a relative and told her she could qualify for a federal grant if she purchased Google Play gift cards.

Judy May was told she had to send codes from the back of gift cards to cover certain costs in advance and receive the grant money on the same day. She says she lost $1,000 due to the scam, money that Google refused to reimburse her.

May filed a class action lawsuit against Google in which she accused the company of illegally profiting from scams by refusing to refund money to victims. The lawsuit also claimed that Google engaged in a series of unfair practices and should place warnings on its gift cards informing buyers of potential scams.

District Judge Beth Labson Freeman dismissed the lawsuit this week. The judge stated that it was the scammers, not Google, who persuaded May to buy the cards, and added that the plaintiff had not demonstrated that Google knew it was receiving stolen funds or that it was the cause of the losses.

By the way, Google receives between 15% and 30% commission for the purchase of gift cards. Despite this, Judge Freeman said that the tech giant was not responsible for keeping the money, as Google’s conduct was not related to the original fraud.

Freeman also said that Google did not engage in unfair practices and agreed with the company’s opinion that the funds were not considered stolen when May purchased the cards.

According to the FTC, Americans lost $217 million in gift card or reload card scams last year, and that only includes the cases that were reported.