Apple agreed this week to settle a lawsuit that was filed in 2020 over its gift cards. One of the key issues was not just that consumers lost the value of their gift cards due to fraud, but that Apple offered minimal or nonexistent help to victims of the scam.
According to the Apple news site 9to5Mac, the criminals in the newly settled suit would pose as IRS agents when committing the fraud. In recent years, though, there have been many flavors of scams that have centered around Apple gift cards. Despite the resolution of this suit, there are reasons to think that Apple gift cards will continue to be problematic.
In the world of gift card fraud, Apple stands out for many reasons. As a very well-known consumer brand that sells many big-ticket items, it’s a popular choice not just for holiday gift cards but cards with amounts in the $100 or $200 range. And Apple items are fairly easy to resell for significant amounts of money.
A Wide Variety of Scams
Some of the Apple scams include:
- Victims receive a call from someone claiming to work for the IRS and are told that they owe additional monies on their taxes. The victims are told they can pay off their debt with Apple gift cards.
- Scammers take photos or write down the card number from a gift card on a rack in a store. They use that number to purchase Apple goods. The person who ends up buying the card subsequently discovers that the balance has already been spent.
- Criminals have sent emails to Apple users saying that their Apple account has been suspended after the company “recently failed to validate your card information.” These phishing attacks attempt to retrieve gift card numbers from unsuspecting victims.
Compounding the problem, Apple has been accused of not doing enough to safeguard customers who have purchased compromised Apple gift cards in-store, or who have been scammed after a purchase. According to the lawsuit, Apple told scam victims that there was nothing the company could do once the money was spent, since it maintains a no-refund policy for gift cards. In June 2022, a judge rejected Apple’s appeal to dismiss the current suit, noting that the company had not done nearly enough to help the victims of gift card fraud.
No Relief
In one instance, a New Jersey man bought $500 worth of Apple gift cards at Target, only to find that all ten cards had been drained of funds. Apple said it could tell the cards had been compromised within five to 30 minutes after they had been activated at Target. But neither Apple nor Target was willing to reimburse the individual for the financial loss. Retailers often deny responsibility for reimbursing fraud victims, claiming that Apple is the responsible party.
Despite the settlement, there could be more claims against Apple in the offing, as gift cards become more popular. The Better Business Bureau revealed a 50% increase in gift card fraud reported to its BBB Scam Tracker over the previous year.