SAN JOSE, Calif. (CN) — A federal Judge Monday dismissed a class action against Google brought by consumers who claim the tech company is not protecting victims of Google Play gift card scams or helping them obtain refunds.
In her 33-page decision, U.S. District Judge Beth Labson Freeman wrote that several of the claims were inadequately pleaded or misplaced in their interpretation of the relevant case law, although she permitted the plaintiffs to amend and refile the lawsuit at a later date.
“The Court finds May has failed to adequately plead that Google committed a wrongful act,” the Obama appointee wrote.
Lead Plaintiff Judy May filed the lawsuit after a scammer contacted her in early 2021 and, posing as her family member, convinced her to buy $1000 in Google Play gift cards at a local store in Indiana. After she sent the codes to her scammers via text, she realized she had been scammed and contacted Google. But the company said there was nothing it could do — the money had been spent.
In her suit, May accused Google of profiting off these scams. Google charges a commission of around 15-30% on all paid apps, in-app purchases and app subscriptions from the Google Play Store. This applies to all transactions conducted on the platform, including those made with Google Play gift cards.
She additionally claimed that Google also tracks redemption codes and serial numbers of Google Play gift cards and therefore the company knows when a gift card is redeemed and which Google Account was used to redeem it.
Thus, by refusing to go after these scammers with adequate knowledge of their accounts, which include identifying personal information like names, emails and phone numbers, May claimed the company violated California Penal Code and criminally profited off the scams.
May also accused the company of violating the California Consumer Legal Remedies Act and the California Unfair Competition Law.
She was seeking compensatory damages and an injunction to order Google to stop transferring any money to Google Play accounts associated with gift card scams and prevent the company from enforcing its terms and conditions on victims of gift card scams who did not redeem their cards.
May also claimed that Google does not go far enough to protect consumers from these scams, adding that Google could prevent future scams with something as simple as a warning printed on their retail packaging.
The judge, however, was unconvinced by her arguments and dismissed each of May’s claims, stating that she did not sufficiently plead any of them.
Freeman ruled that May failed to argue criminal intent by Google, because she did not put forth sufficient facts to support this claim. For example, she never claimed Google received her ill-gotten funds through any careful planning and deliberation or induced her to purchase the gift cards.
The court stated that even if it possessed funds used to purchase the gift cards, May has failed to adequately plead that Google knew the funds were stolen or that it knowingly withheld stolen property. Even though she claimed to have reported the scam to the company, there is no allegation in her suit that Google had a duty to investigate her report or that the information she reported was enough for Google to identify the scam or stolen funds.
The judge said that May is free to amend and refile many of the claims in the lawsuit, but it permanently struck down her claim to seek triple her damages, stating the statute of limitations had passed.
Gift card scams are a rising problem in the U.S. In 2023, the Federal Trade Commission reported that Americans lost $217 million in gift card or reload card fraud alone.