[Previous] Potential Debate Topics | Home | [Next] Discussion about Animal Rights and Popper

Fraud and Big Companies Supporting Fraud

As a followup to my post on Deplatforming and Fraud, I’m going to share two examples of other frauds which were supported by large tech companies (Airbnb, Apple) but aren’t related to deplatforming. I think this will help people better understand what fraud is and that our society has inadequate mechanisms for dealing with fraud.

Airbnb’s Fraud

So, a journalist runs into scammers listing places to stay on Airbnb. They defraud her and she has to stay in a hotel. Full article. Then:

When I asked about the status of my refund, [the scammers] ghosted, which led me to contact Airbnb. Though I had been moved to a flophouse and then told to leave early, Airbnb only refunded me $399 of my $1,221.20, and only did so after I badgered a number of case managers over the course of several days. The $399 didn’t even include the service fees Airbnb charged me for the pleasure of being thrown out on the street.

Airbnb is a party to fraud. It should have been easy to get a full refund. They are protecting and profiting off fraud. Their policies aid fraud. They are playing the middleman and substantially siding with blatant fraud.

Why doesn't she chargeback the whole thing on his credit card? I think the reason is simply that Airbnb would blacklist her as punishment for getting his money back in case of fraud. Without Airbnb in the middle, putting effort into it, the fraud couldn't succeed.

Why doesn't she sue Airbnb? That'd be quite hard. Should it be hard? No. They are blatantly a party to blatant fraud.

In a more capitalist world, with a better legal system that better protected individuals against fraud, stuff like this wouldn't happen. Airbnb would predictably get sued and lose, repeatedly, until they stopped participating in fraud. The people suing would find it adequately cheap and easy, and their payouts would more than cover their legal fees and the hassle, leaving them better off than if they hadn't sued.

We in the USA live in an over-regulated world with too many laws covering everything, and people can get in legal trouble over dumb stuff. But at the same time, we also live in an under-regulated world where there's too little law and order. The basic elements of a minimal government which protects against violence, threat of violene, and fraud, are not actually functioning very well. (Mainly the issue is for fraud. I think our protections against violence, while imperfect, work reasonably well.)

The article shares specifics of Airbnb's unreasonable actions supporting fraud in this case and in many other cases.

Apple’s Fraud

This one is my own story from a couple months ago. I made some in-app purchases in the mobile game Archero, by Habby, from Apple's app store. A few days later, Archero had major technical problems. Although it's a single player game, it requires an internet connection to communicate with their servers for anti-cheat reasons. Their servers were unstable and frequently down. It was frustrating to try to use the game because it was broken so much. I stopped playing. I waited a few weeks and expected the problem to be fixed. It wasn't, and I eventually moved on to playing a different game.

About a month after their game was broken, Archero sent out an in-game message to all players (or maybe just US players, I don't know what's going on in other regions) saying sorry for the technical problems, they are now fixed, here's a couple dollars worth of in-game currency as an apology. Over the next month, Archero sent out four more similar messages, each claiming they had now fixed the problem. I know it wasn’t actually fixed for two months but I’ve stopped checking. Maybe the fifth announcement that they’d fixed it was finally true instead of lying. Their subreddit has lots of complaints and memes about the ongoing problems. I observed the problem on multiple devices and with multiple internet connections, and many other people also had the same issue.

After it wasn’t fixed for several weeks, I contacted Apple and asked for a refund since I hadn't gotten to actually use what I paid for. They told me to contact Habby for customer support. I did. I waited over a week. There was no response at all.

I followed up with Apple and they told me they wouldn't give me a refund. I asked why. I got a non-answer. I asked why again. Non-answer. I asked why again, for the third time. Apple escalated my case to a supervisor on their own initiative. The supervisor did not say why I was ineligible for a refund and told me the case was now closed, final answer. I asked why again and also asked what would happen if I did a credit card chargeback. Apple responded to the allegedly closed case with a non-answer that still didn't tell me what their refund criteria are, what aspect of my case disqualified me for a refund, nor what their chargeback policy is. I asked again about a chargeback and received no response from Apple. This is ridiculous, unfair, and dissimilar to refund policies I experience with major companies in general. It violates my reasonable expectations, based on Apple’s advertising (including all public communications like their website and support documentation), of what sort of customer service would be available (that means Apple’s advertising/public-communication is fraudulent).

I did not chargeback Apple with my credit card for fear that they would punish me, e.g. lock my iCloud account or block me from future App store purchases. Those outcomes would be far worse for me than losing the money.

So Habby got my money by fraud. The only reason they kept it was because Apple played middleman and took their side. Apple was a party to fraud. I think Apple getting in the way of refunds is a significant part of what a lot of shadier app developers are paying for when they give Apple a 30% cut.

If all refunds for Archero have to go through Apple, then it’s Apple’s responsibility to know about Archero’s server problems. Apple won’t investigate the details of particular games, even though they are in charge of dealing with monetary transactions about those games, and Apples tells me to contact Habby for support, but it’s Apple controlling refunds and therefore Apple who needs to deal with it. If Apple’s policy was “developer offered no support and ignored customer, so we’ll issue a refund” it’d be OK, but Apple will refuse refunds when developers have broken apps and completely ignore customers.

Of course, having technical problems with your game servers isn't fraud in and of itself. But they advertised that I could play the game and I could buy things and use them to play the game. They failed to live up to that. So they should give me a refund since I didn't get what I paid for. Refusing the refund makes it fraud. They didn’t provide what I paid for and didn’t give me my money back. The combination is breach of contract and fraud. It’s fraud by Habby because they deceived me into believing they would honor their (implied, unwritten) contract with me that I’d get to experience certain gameplay in return for the payments. It’s fraud by Apple because they deceive the public by pretending to have civilized, law-and-order-compatible dispute resolution mechanisms for their app store, but they don’t. Habby also commited fraud by continuing selling the game throughout their technical problems with no warnings or disclaimers.

FYI Archero is a popular game which has been promoted by Apple and Pewdiepie. Some article says Archero earned $8,500,000 revenue in its first month alone. There are other articles with large numbers too. Either most customers are satisfied and they could refund the justifiably unsatisfied customers and still have a large profit. Or, in the alternative, they got a large portion of their millions of dollars by fraudulently tricking customers into thinking they’d get a gaming experience that they would not get.

Bonus Apple Story

One more quick story about Apple. Over 10 years ago I bought an Apple laptop, with Applecare, along with an Apple Cinema Display. Their website advertised that the Applecare for the computer would also apply to the display without having to separately purchase Applecare for the display. The display broke after the standard warranty but within the Applecare period. Apple refused to repair my display. They said the special deal only applied to desktop computers (or some set of computers that didn’t include the one I’d bought). I had records showing their website had advertised that the deal did apply for the computer I bought. That had apparently been an error. Over the phone, Apple absolutely refused to fix their error and repair my display. I talked to multiple people, escalated it, was assertive, had proof, and was refused service.

The money was a big deal to me back then. I wrote a letter to Apple complaining about the incident (and documenting again that I was correct), on paper, and mailed it to them. Apple responded to the letter by solving the problem for me and repairing the display. People should be aware that writing letters can get problems solved.

I’m not going to send a letter this time (I didn’t even phone in either, which would be too much hassle, I interacted with Apple over email about Archero). It’s significantly less money at a time when I have significantly more money, so it’s not that big a deal to me. I have better things to do. And the case is less clear cut. It involves a third party who didn't make specific guarantees, in writing, about the availability of their game – whereas Apple had literally posted, in writing, on their own website, a specific offer regarding the display purchase. And Apple is a bigger company now, with more unreasonable, evasive support people, and I’m not confident that a letter would solve the problem.

Conclusion

The Airbnb scammers are blatant criminals who can only get away with it due to Airbnb’s support. I doubt Habby are knowingly criminals on purpose. I doubt they think of it that way. But they’re committing some fraud that they can only get away with because of Apple’s support.

Our legal system makes it too hard to hold Airbnb or Apple accountable, which enables ongoing violations of basic capitalist law and order to continue. This is similar to how there is ongoing fraud by tech companies related to deplatforming, which they are getting away with, but could not get away with in a classical liberal society which had fewer laws but actually enforced the most important laws (that we have too, but don’t enforce well enough), in particular laws about fraud and following contracts.

I think it’s especially gross when standard mechanisms for solving these problems, like chargebacks, are prevented because of a company like Apple or Airbnb playing middleman for fraud, so it’s not possible to directly chargeback the company you have a problem with. (Credit card companies in my experience, and by reputation, are very customer-friendly, and it’s easy to get your money back over stuff like this. They basically demand that merchants keep customers satisfied. But Airbnb is sheltering scammers from that demand and Apple is sheltering Habby from it.)

We need a legal system that makes it easier to successfully do small lawsuits for fraud, with meaningful punitative damages. E.g. $10,000 punuitative damages on $100 actual damages, plus legal costs, would add up after many lawsuits and would give individuals the incentive to sue. When many individuals sue over fraud like this, as should be fairly easy to do in a reasonable legal system, companies will change. Similarly it shouldn't be that hard to sue e.g. Facebook if they delete one of my posts or groups on their website contrary to their advertised non-politically-biased policies or terms of service.


Elliot Temple on November 18, 2019

Comments

(This is an unmoderated discussion forum. Discussion info.)