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Google wins lawsuit over gift card fraud
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Google wins lawsuit over gift card fraud

(Reuters) – A federal judge rejected a proposed class-action lawsuit accusing Google of illegally profiting from Google Play gift card fraud by refusing to return millions of dollars stolen from victims.

Plaintiff Judy May lost money because scammers encouraged her to buy a gift card and failed to show that Google knew she caused her losses or received stolen money, U.S. District Judge Beth Labson Freeman said in a ruling late Monday.

The San Jose, Calif.-based judge also said Google wasn’t liable for charging 15 percent to 30 percent commission on scammers’ gift card purchases because Google’s conduct was unrelated to the actual fraud.

May said she lost $1,000 in April 2021 after a scammer posing as a relative instructed her to contact a purported government official who told her she would be eligible for federal grant money if she purchased Google Play gift cards.

The Brownsville, Indiana, resident said he provided back-end codes to supposedly cover upfront costs, but scammers used those codes to make purchases.

May said she wouldn’t buy the cards if Google warned about fraud on the packaging, and that anyone demanding payment with cards was a scammer.

May’s attorneys did not immediately respond to requests for comment Tuesday. Google, a unit of Alphabet, did not immediately respond to similar requests.

Freeman said he might try to reopen May’s case, but the trio rejected the request for compensation outright. Alphabet is headquartered in Mountain View, California.

Americans lost $217 million to gift card or recharge card fraud in 2023, according to the Federal Trade Commission.

Since the data only includes reported cases, the actual amount is likely much higher. Citing FTC data from 2021, May said Google Play cards account for about 20% of gift card scams.

The case is May v Google LLC et al., U.S. District Court, Northern District of California, No. It is 24-01314.

(Reporting by Jonathan Stempel in New York; Editing by Tomasz Janowski)