Class-action suit charges Microsoft with fraud

by Ben Gilbert on Jan 26th 2010 11:30AM

In a lawsuit filed by Philadelphia-area lawyer Samuel Lassoff, Microsoft is being sued for allegedly taking money from consumers for Microsoft Points that were erroneously used during "incomplete and/or partial downloads of digital goods and services and refused refund of same." The Horsham, Pa. resident claims that "an invoice he received early this month from Microsoft included charges for purchases he couldn't complete due to a balky download system," according to an InformationWeek.com report. Furthermore, he contends that this was no accident on Microsoft's part.

When we called Mr. Lassoff's law office for comment, we were met with a disconnected number message. However, the lawsuit's Facebook page (it's a brave new world, folks) calls the suit a "class action on behalf of several million US customers exposed to Microsoft Point fraud." Citing "fraud, breach of contract, negligence, unjust enrichment, and unfair business practices," Lassoff seeks a "full refund to all US consumers of all Microsoft Points fraudulently charged to consumers for incomplete or partial downloads of purchased digital goods and services."

Aside from his current lawsuit, Mr. Lassoff previously sued Google, Yahoo, and IAC Interactive in 2006 -- all three suits were eventually dropped.

[Thanks, Zo]

Source

Tags: class-action, class-action-lawsuit, facebook, fraud, google, iac-interactive, lawsuit, microsoft, microsoft-points, samuel-lassoff, Xbox-360, yahoo

Reader Comments (69)

Wow, it's not Erik Estavillo. I'm surprised.

what the hell is wrong with this comment system, it's like everytime i use the F word it never goes through.

anyways, this happened to me, i paid for point lookout, they took my points and never gave me the download option.

i made calls, sent e-mails etc, still no download

Hi, Eric.

I kinda wish someone would sue Microsoft for that sleazy MS points system. It's obviously made to make you think you're spending less than you actually are, and there's no easy way to really convert to points to dollars in your head.

Yes, it is very frustrating to have to purchase more points than one needs, always leaving left-over points. That way Microsoft almost always has a larger-than-normal profit from your point than they should.

80MS points = $1. I did that without looking it up. Also, 400 = $5, 800 = $10, 1600 = $20. There you go.

Yeah there is. Divide by 80. Most items divide evenly.

Its still sleazy due to the fact that you cant buy an exact amount of points, you're left over with a useless amount of points, and they get to keep the money off of that.

That's only true if you want to make a single purchase. Extra points aren't lost. That's kind of the whole idea of the point system: you buy a point card for a specific download and use the remaining points for something else.

That's also the whole idea behind money. Which works pretty well for me IN EVERY OTHER SITUATION WHEN I NEED TO BUY SOMETHING.

It would be nice to have both - being able to purchase things for their exact amount or purchasing a bunch of points that can be spent later. Of course this will never happen as it will result in less profit.

I know right? Why isn't there a $6.79 bill that I can pay for my lunch with? I had to give them a $10 bill and hold on to the rest!

@ Ian

That's a stupid comparison. Stupid. You can pay 6.79$ with a ten dollar bill or a debit card or a dozen other ways. If you pay with a 10 you can do whatever the hell you want with your 3.21 in change. I can't do anything with 80 leftover MS points!

"I know right? Why isn't there a $6.79 bill that I can pay for my lunch with? I had to give them a $10 bill and hold on to the rest!"

Ian, you win the award for the worst analogy on the internet. In your description, YOU hold on to the rest and you can spend the rest ANYWHERE. MS does not give you a refund on unused points, and you CANNOT spend them anywhere else. What if your Xbox dies and you don't want to buy a new one? Is there a way to get a refund on partially used points or a way to sell them to someone else?

Look, the Xbox does a lot of things right, but making things a good value is not one of them. Peripherals, accessories, points and reliability all make the cost of ownership much higher than they make it seem when you buy the system. You can still like the Xbox AND call MS sleazy at the same time, kinda like Madonna.

Almost as sleezy as the multi billion dollar gift card industry. Please. If you don't like the system don't use it.

If you really have to worry about a lousy $1 being leftover from points, maybe you need a new (cheaper) hobby...do you plan on only ever buying *1* item from Live and nothing ever again?

@lockheede

Well, the case itself seems to be about slightly different issue, but address your comment, you're missing the point. Sure, it may only be a buck or two left over, but it's MY dollar, not MS'. Also, while it may only be a couple of dollars for you, it's likely millions collectively for MS.

And how many items you purchase has very little to do with it. I've never managed to get my points back to a zero balance. I've always got some left over because I've never into a situation where the amount I had in my account was exactly the same as an item I was purchasing.

In truth I really don't spend any time worrying about it, but if given the choice I'd rather just be able to buy items at the exact price rather than having to had a preset number of points that don't match up with my purchase amount. They should really adopt the same system as Sony.

Damn, I need to edit my previous post. Made a few typos, but should be obvious what I was attempting to say.

@vid

I realize it's your dollar, but how is it any different that buying a PSN card or a Wii card? It's still money left over.

I think the reason MS did points the way they did was so they didn't have to worry about collecting and paying out sales tax on the purchases. I know you pay tax on purchases in PSN, but not sure about Wii.

Their system is very similar to Nintendo's with the exception that Nintendo's points match up with cents. So in that regard it's a bit less shady.

But Sony's system is not the same. Everything is priced in real world dollar amounts, no converting to points. You can also use a credit card and purchase items for their exact amount. The only caveat is that they require a minimum of $5 to be added to your online account. But it's easy to actually spend everything in your virtual wallet because if you buy anything over $5 then the exact amount will be added. So for a game that costs $9.99 exactly $9.99 will be added to your wallet and you'll have a balance of $0.00 after the transaction.

Yes, Sony also has cards, but those are for people who don't have or don't want to use credit cards. The point is though that you have better options with Sony's system than you do with Microsoft's. At least Microsoft started selling some of their games directly via cards.

As for tax, I don't pay any on PSN purchases. It varies state to state and country to country. It actually varies with Live too.

"Since when is spending more money a better option? "

That's exactly the point. You almost always have to spend more on points than what you actually need for the item. But, yes, you can sometimes find good deals on point cards (not all are legit, BTW). I just find it more convenient to skip the cards and buy online. The download stuff is generally more of an impulse buy for me, I don't stock points.

Nintendo uses the point system too, even though a lot of games are the exact amount of the minimum point purchase - $10 : 1000pts, plenty of games cost 500, 600, 800, 1500 points. Of course there are games that cost exactly 1000points, Overall its the same bullshit as the xbox system, designed to make you feel like you won't lose money by buying more.

So the guys suing because he's a lazy dumbass. Hey I'll sue instead of calling customer service over a stupid movie rental (cause otherwise he could just download it again)- or maybe he's just that stupid to realize he can download content he buys as many times as he wants.

Keep me out of your class action suit and stop trying to speak for me. MS has been taken to court over legit reasons, but this isn't one of them

if you read the actual story, it says he is suing for "refused refund of same". Which sounds like hes called microsoft to get a refund and they said "no"

He must not use Live very much as all purchases can be redownloaded at any time.

I know I did it a lot when I had only the 20 GB drive.

Yeah....that is what I was going to say.

If you delete purchased map packs, arcade games or extra DLC you can redownload it any any point. If the download didn't come through, select to redownload it and try again. I don't think a class action lawsuit is in order here. Seems like MS should countersue for their time in fighting a frivilous lawsuit based on BS like this.

I would think that if you are going to bring a lawsuit against someone you would do a little research before you start accruing court costs.

Actually, it depends who offered the download. I grabbed a throwback jersey set for NCAA 2007. During spring cleaning, I deleted it. I popped the game back in, and went through my history to redownload it. It's now one of the handful of "Unknown Game" items I have. It's and EA product, so obviously they decided to stop offering it, and the pack was free. But right there is evidence that you can't download everything forever.

@Deezul: Thats the problem with the whole digital distribution, someday your purchases will be useless if the service remove the download from its catalog, or, in a worst case scenario, the service simply ceases to exist.

You have no real guarantees with digital distribution.

@Sean

you simply don't understand,

there is a bug that when you pay for a DLC, it takes your points, but it doesn't give you the rights to the dlc.

it happened to me, it took 800 points for point lookout, and i have no option to redownload it.

i go to my download area, and it isn't there, i go back to the point lookout page, and the only option is "purchase", but on my receipt it shows 800 deducted for point lookout.

By the gods... this may be the first video game lawsuit that has a leg to stand on!

Does Live have an option to re-download or a limit to the amount of downloads?

So he's giving the money back to the people, right?

Asinine lawsuit in that anyone who initiates a download and is charged money has a perfectly legitimate remedy available at their fingertips: try the download again! The system will allow you to "re-download" anything you've purchased before, so partial downloads can be completed.

Specific performance at your own hands, buddy. Class-action FAIL.

Now that I think of it, MS should seek Rule 11 sanctions against this guy. Lawyers are required to make a reasonable investigation into the law and facts before filing suit. A five minute inquiry would have shown that this is a non-issue.

Future lawyer here: lawyers are out of control.

...not that you didn't know that.

Hey Sam do me favor ,please do not speak or sue on my behalf . cause i am capable of doing for myself . as for your issues these could have been solved if you called the customer service # when they occurred .you useless ratbag.

I was wondering how long it would take people to say that they didn't have any trouble with their Live downloads. If this guy (somehow) wins (which will be coincident with my running a marathon on the moon), I, and I would venture to guess every other Live user, would be entitled to a refund of a whopping $0.00. Adjusted for inflation over the time Live's been in service, and that comes out to a hefty $0.00. And if you're in Canada, that number goes up to the even more impressive $0.00.

Wife: "Hey hubby these bills are pilling up, why don't you get a job."
Husband: "but I'm currently downloading this cool ass horse armor off XBOX live"
Wife: "I'm going to be currently heading downstairs to pull the router out of the wall if you don't get your shit together."
Husband: "Well instead of punching you in the face I'm gonna sue someone again, so I can sit on my ass all day."
Wife: "Good idea, I'll get Samuel Lasoff's number"
Husband "speed dial #4"

made me laugh, good on ya!!

Are you laughing at your own comment?

God no. This comment and every one I have below it were supposed to be replies. The first one I thought maybe I hit the wrong link. But the next couple times I made no mistake but yet they came in as new comments.

I used to think people complaining abot the comment system just clicked the wrong link.....now I'm wondering what the f&ck.

"now I'm wondering what the f&ck."

So am I, after I read your last message.

I Demand that Microsoft refunds the VPN proxy fee that I paid in order to circumvent the "item not available in your current location" error when I wanted to spend my points. And also refund or let me transfer the 10 MS Points that are remaining in my second XBL account.

errrrr, this is supposed to be a reply to John Z's comment. !@#$%^

for real???

Real.

...but you can re-download anything you buy from XBL, so how could a partial download result in a fraudulent sale?

Ummmm, last time I checked you could go back and download anything that you have downloaded before or anything that didn't download fully without having to pay. Where's the problem here?

The bastards conned me out of my CoD:WaW map packs downloaded them played all the maps came back to it at the weekend (3 days later) and they didnt work redownloaded 4 times and contacted them to no avail they didnt even care

I'd very much like interest on my unused points please.

Did Balki create this "perfectly strange" points system?

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Class-action suit charges Microsoft with fraud

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