New Class-Action Lawsuit Against Microsoft Alleges "Microsoft Point" System Fraudulent

Microsoft has always taken a certain amount of flak over the fact that its XBox Live Marketplace (as well as the Zune and Games for Windows - Live stores) all use Microsoft Points as currency, but the recent actions of one unhappy customer have given the situation a new twist. Last week, Pennsylvania attorney Samuel Lassoff filed a class action lawsuit against Microsoft, claiming that the company's customers had been "exposed to point fraud, following fraud, breach of contract, negligence, unjust enrichment, and unfair business practices on the part of the defendant Microsoft Corporation."

Underneath the legal verbiage, Lassoff's complaint is that the XBox Live store improperly charged Microsoft Points for partial downloads that were unable to complete. According to the complaint, this rises to the level of illegal fraud because Microsoft collected "revenue for digital goods and services which were not provided." Lasshoff was forced to file the suit after calling XBox Live Customer Support and spending "several hours" contacting his credit card company.

The filing describes these activities as "extremely burdensome" and states that they required "15 attorney hours over several days." Unfortunately, Lassoff neglected to provide the definition of the extremely suspect phrase "attorney hour," which we suggest most likely converts into just 1-2 of our normal Earth hours. The plaintiff is no stranger to frivolous lawsuits, having previously sued Google and Yahoo over click fraud, as well as an Atlantic City casino in 2005.

The lawsuit is unlikely to achieve its goal given that Lassoff probably spent all of $5-$20 dollars, but it could provide additional impetus for Microsoft to scrap the Microsoft Point system in favor of direct currency charges. While it's not a factor in the current complaint, customers have roundly disliked the fact that it's impossible to purchase a specific number of points that would correspond to the number actually needed to buy a particular item. Instead, gamers must buy points in pre-set blocks, the remainder of which are spent at a later date. Depending on how often one buys from the store, these unspent points effectively function as a free loan to Microsoft.

Microsoft has yet to file a formal response to the case, but will presumably do so after its lawyers manage to stop snickering.

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