Has a black cat crossed Apple’s path? The Cupertino giant settles lawsuit over iTunes gift card scam

Some will say that the end of 2023 and the beginning of 2024 is just not Apple’s best of times.

It’s not known if a black cat has crossed Apple’s path recently, but a countless procession of lawyers, prosecutors, judges and lawsuits have come their way.

You can’t possibly have not heard about the Apple Watch Series 9 drama that’s been playing out since December 2023; next, the Cupertino giant settled a suit over its Family Sharing feature for $25 million (if you’re eligible to get your money back, here’s how to get some); and finally, a report claimed that Apple sold fewer flagship iPhones in 2023 than it 2022.

Now, there’s more lawsuit action

Per Reuters, Apple has agreed to settle a lawsuit accusing the company of knowingly letting scammers exploit its gift cards and keep stolen money for itself.

This sounds bad and Apple’s bid to dismiss the lawsuit was rejected by US District Judge Edward Davila in June 2022. Judge Davila said the plaintiffs sufficiently alleged that Apple’s effort to disclaim liability, even after victims claimed they were scammed, was “unconscionable”.

Now, it seems that both sides have agreed on material settlements in federal court in San Jose, California and are drafting a formal settlement to be presented to Judge Davila for approval.

The scam, as the report has it, involves fraudsters who instill panic or urgency by insisting by phone that victims buy App Store and iTunes gift cards or Apple Store gift cards in order to pay for taxes, hospital and utility bills, bail and debt collection.

Victims are then told to share the codes on the backs of the cards, despite a warning on the cards that reads: "Do not share your code with anyone you do not know."

According to the complaint, Apple would typically deposit only 70% of the stolen funds into fraudsters' bank accounts, and keep 30% for itself as a "commission" for knowingly converting stolen codes into dollars.

Victims likely lost "hundreds of millions of dollars" in the scam, the complaint said, Reuters reported.

If you (between 2015 through July 31, 2020) bought gift cards redeemable on iTunes or the App Store and provided codes to fraudsters, and did not receive funds from Apple, this lawsuit may be your fortune cookie and the chance to get some money back.