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The plaintiff initially filed the complaint in March, after she became a victim to gift card fraud.
A federal judge dismissed a proposed class-action lawsuit alleging that Google knowingly allowed fraudulently obtained Google Play gift cards to be redeemed, keeping millions in “stolen” money from victims.
US district judge Beth Labson Freeman on Monday (4 November) said that the plaintiff Judy May, who was a victim of the scam, lost money through being induced to purchase and share details of the gift cards she purchased, and that she failed to show that Google caused her loss or knew it was receiving stolen funds.
“The Court finds May (plaintiff) has failed to adequately plead that Google committed a wrongful act,” Freeman ruled, adding that May also failed to explain how Google had a “duty” to investigate and refund the alleged scam.
A class action complaint was filed in Northern California by the plaintiff and Indiana resident May earlier this year seeking to take Google to trial for allegedly playing a “direct and vital role” in gift card scams, employing practices to perpetuate the theft and “knowingly keeping stolen funds” ranging in the millions.
In 2021, May purchased $1,000 in Google Play gift cards as a result of a gift card fraud – and subsequently shared the codes with a scammer. However, when she contacted Google to report the crime, she was informed that nothing could be done and that Google cannot refund the money she had paid for the cards.
In her ruling, the district judge of Northern California said Google was not liable because it keeps 15 to 30pc in commission on purchases made on Google Play gift cards by scammers. The complaint had alleged that the Alphabet-owned company takes the commission despite knowing that the gift cards were purchased as a result of fraud.
It is estimated that US gift card fraud amounts to between $5.5bn to $27.5bn annually, with millions of people falling victim to scams that give criminals a more portable alternative to cash while staying anonymous.
While this is a win for Google, last month the company lost its appeal against a €2.4bn antitrust fine in the EU. And the US Department of Justice has said that it may propose that Google should be forced to divest from some of its biggest businesses in order to address the company’s illegal monopoly on internet browsing.
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