Apple Gift Card Scams Cost Canadians Millions a Class Action Lawsuit Claims

Apple has been targeted in a class action lawsuit Canada initiated over gift card scams. The Apple gift card scams class action lawsuit claims victims have not been reimbursed all of their money from the scams and that Apple is profiting from them. 

The Apple gift card scams class action lawsuit alleges that Apple breached duties to the Class Members by acting in bad faith. 

The lead plaintiff, Michael Ferracci, and the Class Members are seeking a total of $100,000,000 in damages including statutory damages, damages for negligence, breach of contract, and breach of the duty of good faith. 

Around Oct. 4, 2019, Michael received several emails from a scammer pretending to be his employer, who was abroad. The emails demanded he buy ten $100 Apple gift cards and send each of the gift cards’ redemption codes back in an email. 

Michael was unaware he was corresponding with a scammer and he completed the directions in the emails. He bought ten Apple gift cards at Shoppers Drug Mart, according to the Apple gift card scams class action lawsuit. Then, the scam allegedly continued asking Michael to buy more Apple gift cards. He went back to the same store to purchase them, but the manager of the store advised him that the gift card purchases were very suspicious. He directed Michael to contact his employer directly to confirm the directions. 

At this point, Michael realized he was the victim of a scam and contacted Apple to seek advice. A representative reportedly told him that this gift card fraud is very common and Apple regularly receives calls from customers asking for their money back. Luckily, Apple had the ability to deflect seven of the gift card balances from the scammer and give $700 back to Michael. However, he did not receive the other $300 back. According to the Apple gift card scams class action lawsuit, Apple knows whether the other $300 was accessible or not. It is allegedly suspected that they kept it as a “commission” on Michael’s purchases. 

The Apple gift card scam class action lawsuit is alleging that Apple owes the Class Members contractual and statutory duties under the Consumer Protection Act and Equivalent Consumer Protection Legislation. 

The Apple gift card scam class action lawsuit Canada accuses Apple of breaching their duties and inducing damages. According to Apple’s terms, they take fraud seriously and they hold the right to cancel credits and accounts. The Apple gift card scam class action lawsuit argues that there is an implied term in the Apple agreement that explains the rights to protect gift card purchasers from scammers. In addition, more implications in the agreement say that Apple will not ignore scam activities involving their gift cards. Apple reportedly asserts that its terms are limited to gift cards being stolen, lost, or used without consent. Apple does not claim liability for loss due to gift card scams. 

Apple gift card scams commonly begin with the crook creating a situation that gets the victim into a panic in order to get them to comply with the “urgency” of demands. Canadians reportedly lose millions of dollars annually due to scams. Scammers often use gift cards to funnel money and according to the Canadian Anti-Fraud Centre, between $6 million and $7 million annually has been lost in gift card scams between 2017 and 2019.

The Apple gift card scams class action lawsuit says that Apple is aware that their gift cards are popular amongst scammers. Fraudsters make money from the Apple gift card scams by selling the redemption codes at a discount, or they make purchases with the gift cards in the Apple Store app. When the scammers make purchases with the Apple gift cards, Apple makes a profit. Or when people purchase Apple redemption codes from the scammers, they too are making purchases from Apple, bringing in profits. 

The class action lawsuit Canada alleges that Apple makes money by telling scam victims that there is no way to recoup their stolen funds, but in reality, they do have the know-how to reverse the funds back to the victims. 

The “Class” and “Class Members” include all Canadians who bought at least one Apple gift card since Jan. 1, 2016, and gave the redemption code to unknown people and were not given their money back by Apple.

Have you fallen victim to an Apple gift card scam? Do you plan to join the class action lawsuit Canada? Let us know in the comment section below!

The lead plaintiff and Class Members are represented by David Sterns and Jonathan Schachter of Sotos LLP.

The Apple Gift Card Scams Class Action Lawsuit is Michael Ferracci v. Apple Inc., et al., Case No. CV-20-00645295-00CP, in the Ontario Superior Court of Justice, Canada. 

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