Google Not Required to Refund Victims of Gift Card Scams

In an order dated Nov. 4, Judge Beth Labson Freeman of the United States District Court for the Northern District of California granted Google’s motion to dismiss the case.
The judge found that the plaintiffs’ arguments were inadequately presented but provided them the opportunity to amend and refile the complaint.
The lawsuit stemmed from incidents where consumers were deceived by scammers into purchasing Google Play gift cards under false pretenses.
May, the lead plaintiff, claimed she lost $1,000 in 2021 after being tricked by individuals posing as government agents who instructed her to buy gift cards to cover supposed fees for a nonexistent grant.
May alleged that Google did not offer sufficient warnings about such scams on its gift card packaging or within its terms and conditions, nor did it assist her in recovering her funds after she reported the incident.
“Over nearly a decade, Google has knowingly kept millions of dollars in stolen money from victims of gift card scams who purchased Google Play gift cards,” the lawsuit said.
Google argued that it was not liable for third-party misconduct and that its terms and conditions explicitly state that the company is not responsible for lost or stolen gift cards or unauthorized use.
The company also highlighted that it provides warnings about potential scams on its website and through customer support channels.
Judge Freeman agreed with Google’s position, noting that the company’s disclaimers and policies were clear and that the plaintiffs failed to demonstrate that Google had a legal obligation to refund the scammed funds.
However, she acknowledged the seriousness of gift card scams and allowed the plaintiffs to amend their complaint to address the deficiencies identified in her ruling.
The court order cited Federal Trade Commission data that gift card scams have resulted in significant financial losses for consumers nationwide, with $433.5 million in total gift card scams from 2018-2021—though the agency said this is likely an under-representation of actual cases.
May has 45 days to amend and refile many of the claims in the lawsuit, but the judge permanently struck down a claim seeking damages, stating that the statute of limitations had passed.