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Apple faces prosecution over suspected multimillion Dollar gift card scams

*The company is willingly enriching itself while vulnerable seniors are exploited in about $300million gift card scams ─Plaintiffs

*Most scammed consumers never file a report to FTC about incident due to shame or process involved, says report

Alexander Davis | ConsumerConnect

You would probably never think it, but gift card scams can be quite a cash cow for the brands the gift cards are from.

At least, a new class action lawsuit thinks it is for Apple, says a report.

The lawsuit claims that the “ecosystem” of Apple’s App Store insulates the company from liability or loss resulting from iTunes gift card scams, according to ConsumerAffairs.

The suit states: “Any attempt by Apple to disclaim liability for loss or damage resulting from iTunes gift card scams would be unconscionable and unenforceable in light of its role in those scams and the profit that it makes and retains from such scams.”

What is the cash cow? For some reason, perhaps the shame of having the wool pulled over their eyes or the hassle of filing a complaint, most of the scammed consumers never file a report to the US Federal Trade Commission (FTC) about the incident.

It was learnt that the aggregate losses of those who do step up, however, exceeded an estimated $93.5 million during 2015-2019, with the Dollar amounts increasing significantly each year.

iTunes gift cards make up nearly 24 percent of all gift card scams. Applying this percentage to the total haul works out to be more than $90 million for Apple, report quotes FTC data.

The plaintiffs in the class action said: “As a result, this publicly reported $93.5 million figure appears to be only the tip of the iceberg.

“If only 10 percent of scam victims reported to the FTC (versus local police, attorney general offices, Apple, or nobody at all), the iTunes gift card scam would approach $1 billion in scammed proceeds, with Apple retaining $300 million in commissions,” the plaintiffs explained in the lawsuit.

Report further indicates the suit contends that Apple is fully cognizant of the boundless nature of the scam and has been for some time.

The plaintiffs also claim that the company has the ability to lay hands on who might be responsible, but doesn’t because it is motivated to let the scam play out since it reaps a 30 percent commission on any purchase made using the gift cards.

The lawsuit states: “Apple dedicates a webpage to [the information regarding the scam], but apparently does little more.

The plaintiffs argued that Apple opts for the profit off the scam-related commissions while “falsely inform(ing) the public that all scammed proceeds are irretrievable.”

In relation to the elder abuse, the plaintiffs are asking the courts to decide whether Apple aids and abets scammers in perpetrating gift card scams, the suit is also seeking a determination on whether Apple’s conduct constitutes financial elder abuse.

The attorneys lay out the possibility that Apple’s inaction essentially adds up to financial and/or elder abuse “because it took, secreted, appropriated, obtained, and/or retained” money from seniors that was wrongfully obtained.

Elder abuse has become a top topic in consumer protection circles in recent times, added the report.

United States Attorney-General William Barr in an earlier speech in the year said that everyone needs to step up and not be afraid to report anything unusual in regard to scams.

Barr stated: “What makes these crimes particularly heinous is not only the vulnerability of the victims, not only the breach of trust involved, but also the victims’ stage in life – the victims usually do not have the opportunity to recover from the financial loss.”

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