Apple hit with lawsuit alleging poor security measures on gift cards

Posted:
in General Discussion
Apple has been hit with a lawsuit alleging that its gift card security features are not strong enough to deter thieves.

Credit: Apple
Credit: Apple


The complaint, originally filed on May 28 in San Diego County Superior Court, was on Friday moved to the U.S. District Court for the Southern District of California. In the lawsuit, which seeks class status, the plaintiff claims that Apple has failed to "implement and maintain reasonable security procedures and practices to properly secure" its physical gift cards. As such, it alleges that Apple gift cards can be targeted and compromised by thieves at the point of sale.

According to the plaintiff, Apple's gift cards have personal identification numbers that are covered with silver scratch-off tape. It likens these PINs to a customer's "personal information" once a gift card is purchased. As such, the lawsuit claims that, if the PIN is compromised, then personal information has been stolen.

Apple recently launched a new type of universal gift card applying across its services, hardware and software sectors, but the complaint specifies gift cards that apply to iTunes and the App Store.

The plaintiff, Rachel Shay, says she purchased a gift card for her son's birthday but ended up receiving a card that didn't have any value left on it -- since "third parties intercepted the activated funds."

"As a direct and proximate cause of Apple's conduct, Plaintiff and Class Members suffered injury in the amount of money loaded onto the gift cards," the complaint reads.

The lawsuit alleges that Apple violated the California Consumer Privacy Act, and claims that the company has "reaped enormous profits" from its "unlawful, unfair and deceptive business practices."

It seeks to represent a class comprising all "consumers in the United States who purchased an Apple gift card wherein the funds on the Apple gift card was redeemed prior to use by the consumer," as well as a similar subclass in California.

The complaint seeks damages for class members, an injunctive relief barring the "unlawful practices" from continuing, and "restitutions and disgorgement" of the defendants' revenues to the plaintiff and class members. It also asks for an order compelling the defendants to "engage in a corrective advertising campaign."

Comments

  • Reply 1 of 17
    DAalsethDAalseth Posts: 1,725member
    “According to the plaintiff, Apple's gift cards have personal identification numbers that are covered with silver scratch-off tape. It likens these PINs to a customer's "personal information" once a gift card is purchased. As such, the lawsuit claims that, if the PIN is compromised, then personal information has been stolen“
    Uh...yea...no. 

    Anilu_777watto_cobra
  • Reply 2 of 17
    Isn't that pretty much how every other gift card on the planet works?  Best Buy, Starbucks, Timmy's... Am I missing something?
    The card would have been intact at time of purchase/loading. A loaded card is like cash in a wallet. Somewhere along the line she lost custody of the card. Someone scratched the back, got the number, and redeemed the cash, leaving her with an empty card. Kind of like taking the cash out of someone's wallet and putting the wallet back.  How is this different than gold coins in a sack dating back thousands of years?
    Anilu_777dewmen2itivguywatto_cobra
  • Reply 3 of 17
    mike1mike1 Posts: 2,749member
    Huh?! Pick me for that jury, pretty please.
    watto_cobra
  • Reply 4 of 17
    A cup of hot coffee comes to mind.....
    headfull0winewatto_cobra
  • Reply 5 of 17
    Isn't that pretty much how every other gift card on the planet works?  Best Buy, Starbucks, Timmy's... Am I missing something?
    The card would have been intact at time of purchase/loading. A loaded card is like cash in a wallet. Somewhere along the line she lost custody of the card. Someone scratched the back, got the number, and redeemed the cash, leaving her with an empty card. Kind of like taking the cash out of someone's wallet and putting the wallet back.  How is this different than gold coins in a sack dating back thousands of years?
    Exactly.  Frivolous suit is what I call it.  There is no “personal information” on the card as it simply carries cash value and no other value.
    n2itivguywatto_cobra
  • Reply 6 of 17
    JohnDee said:
    A cup of hot coffee comes to mind.....
    Except McDonald's coffee was hotter than other restaurants… >20F.

    You should watch the documentary - it's pretty informative about business lawsuits in general.
    ciaStrangeDayswatto_cobra
  • Reply 7 of 17
    Countersue to shut these frothy lawsuits down.
    watto_cobra
  • Reply 8 of 17
    entropysentropys Posts: 3,111member
    Apparently in Australia you can pay your tax office debt with iTunes cards supplied to a very helpful chap who volunteers his services. 
    So funny it has become a meme.
    ciawatto_cobra
  • Reply 9 of 17
    Rayz2016Rayz2016 Posts: 6,957member
    This one really is desperate. 

    About time laws were introduced to allow lawyers to get sued. Let’s see how they like spending money defending themselves. 
    fotoformatwatto_cobra
  • Reply 10 of 17
    ciacia Posts: 145member
    JohnDee said:
    A cup of hot coffee comes to mind.....
    mknelson said:
    Except McDonald's coffee was hotter than other restaurants… >20F.

    You should watch the documentary - it's pretty informative about business lawsuits in general.
    Yea, the hot coffee thing wasn't just "Oh, this coffee is too warm".  That coffee burned that woman like napalm.  It was so hot it wasn't safe for anyone to even consume.  Those pictures of her burns are insane.
    StrangeDayswatto_cobra
  • Reply 11 of 17
    fred1fred1 Posts: 830member
    From what I can discern with my tiny mind, the card value was used only after someone had scratched off the protective film. Did these people not notice that or were they just too ignorant to realize what had happened? Just how is Apple supposed to protect people against this?
    watto_cobra
  • Reply 12 of 17
    dewmedewme Posts: 3,822member
    This suit is totally whacky town. The base level of security for nearly all personal information, secrets, etc., is physical security. There's an implicit expectation that if you have a physical item that contains something that you want to keep private, you must take active measures to keep it safe and secure. This applies to your credit cards, wallet, car keys, id cards, activated gift cards, your secret diary, your Enigma code book, ... whatever. I know we all like to rail against people who think that they should be compensated for their stupidity, but obviously there are armies of lawyers (and some clueless juries) out there who will disagree with us.
    watto_cobra
  • Reply 13 of 17
    jungmarkjungmark Posts: 6,868member
    Waste of court’s time. Dear custormer, was the PIN visible when you purchased the card? 
    watto_cobra
  • Reply 14 of 17
    The fact that scammers often demand to be paid in Apple gift cards is an absolute red flag. This has been going on for decades and Apple has been fully aware of it the whole time. Apple's stance on security only goes so far, I guess.
  • Reply 15 of 17
    Rayz2016Rayz2016 Posts: 6,957member
    According to the plaintiff, Apple's gift cards have personal identification numbers that are covered with silver scratch-off tape. It likens these PINs to a customer's "personal information" once a gift card is purchased. As such, the lawsuit claims that, if the PIN is compromised, then personal information has been stolen.


    And banana is in fact, a starship, just because I say so.

    watto_cobra
  • Reply 16 of 17
    Rayz2016Rayz2016 Posts: 6,957member
    According to the plaintiff, Apple's gift cards have personal identification numbers that are covered with silver scratch-off tape. It likens these PINs to a customer's "personal information" once a gift card is purchased. As such, the lawsuit claims that, if the PIN is compromised, then personal information has been stolen.

    And a banana is, in fact, a starship, just because I say so.

  • Reply 17 of 17
    Rayz2016Rayz2016 Posts: 6,957member

    The fact that scammers often demand to be paid in Apple gift cards is an absolute red flag. This has been going on for decades and Apple has been fully aware of it the whole time. Apple's stance on security only goes so far, I guess.
    Guess again.
    watto_cobra
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