Don’t count on Google to save you if you’re caught in a gift card scam

Key Takeaways

• A federal court ruled that Google is not liable for refunding the victim of a Google Play gift card scam.
• 20 percent of all gift card scams in the United States involve Google Play gift cards, resulting in over $17 million in losses.
• Consumers must be vigilant as scammers exploit gift cards, and companies hold no duty to protect.

Scammers love using Google Play gift cards. It allows them to collect vast sums of money from around the world, and a judge has ruled victims of such scams can kick dirt.

A federal court has ruled that Google is not under any obligation to refund users who lose their money to Google Play gift card scams (via Android Authority). The ruling was handed down by Judge Beth Freeman, who dismissed a class-action lawsuit against Google by the victim of one such scam. The plaintiff, Judy May, argued that Google profits from these scams thanks to the 15 to 30 percent commission the company makes on each purchase. But the judge didn’t have it, and asserted that Google had no control over third-party scammers.

Issuers have no liability for gift card scams

Judge Freeman noted in her ruling that May’s loss was entirely the fault of third-party scammers and their fraudulent inducement. She said Google did not omit details or misrepresent its gift cards. Finally, she found that Google’s policy of refusing refunds in gift card scam cases is the same as other retailers, including Walmart and Target.

May lost $1,000 to scammers in 2021. They told her she was eligible for a large government grant but had to pay certain up front costs to cover delivery of the grant money. The scammers tricked her into purchasing Google Play gift cards and sending them the codes. After she realized she had been scammed, she contacted Google, but the company refused to provide a refund.

Federal Trade Commission data shows Google Play gift card scams amounted to 20 percent of the scams reported between 2018 and 2021, resulting in more than $17 million in losses. However, Judge Freeman ruled that May’s losses didn’t warrant a refund from Google because she had not used the gift cards as designed.

So what now for victims of gift card scams?

Judge Freeman left room for May to amend certain claims within 45 days, but that’s a steep legal path to take if there are any revisions to be made. This decision underscores the limitations of consumer protections when it comes to digital gift cards. The court determined that Google does not have a specific duty to warn or protect consumers in these situations.

Scams are on the rise. This ruling highlights the importance of being aware, and puts the duty of viligance squarely on the consumer’s shoulders.