Microsoft Points invites class-action suit

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By Ryan Burns

A Pennsylvania attorney is leading a class-action lawsuit against Microsoft because he believes Microsoft Points defrauds users, including himself.

Ever wonder why hot dogs are usually sold in packs of ten, but hot dog buns are sold in packs of eight? That way, you always have to buy more, and that is the marketing strategy that has Samuel Lassoff up in arms.

$5 from a credit card will net you 400 Microsoft Points, and Microsoft only sells the points in multiples of 400. The exchange rate has been frustrating gamers for years, especially when compared to the much simpler Wii points and Playstation Network wallet.

The PSN wallet loads only the exact amount of money you specify, with a 1:1 exchange rate, while 100 Wii points are sold for $1.

Since users can only buy Microsoft Points in bulk, they often have leftover points once they've downloaded what they want. So if a gamer wanted to buy a 1000-point game, he or she would have to pay $15 for 1200 Microsoft Points.

This leaves that gamer $2.50 worth of points and nothing to do with them. At best, those points can go toward a future purchase. At worst, Microsoft was able to collect $2.50 without giving anything in return. This happens a countless number of times, and most Xbox Live users have gotten used to it by now. However, Lassoff is not about to take it lying down.

Lassoff says the exchange rate was designed to deliberately overcharge him and other Xbox Live users. According to Lassoff, Microsoft contractually agreed to only charge for "the complete, whole, and or actual digital goods and services purchased."

"Microsoft breached that contract by collecting revenues for digital goods and services which were not provided," Lassoff said in the suit.

This is mostly due to the fact that when a game download from Xbox Live goes wrong, the money spent is sometimes lost entirely, effectively charging the user for nothing. Lassoff alleges that these errors are anything but accidental.

Lassoff is accusing Microsoft of "point fraud due to incomplete and or partial downloads," which he says has affected him and "hundreds" of other Xbox Live users. He also stated that Microsoft did not offer to recover the lost points after he contacted customer support.

Several complaints have come to light from other users whose accounts have been hacked and lost Microsoft Points that they already purchased. Many are calling for a reform of the points system.

Before this suit came about, Xbox product manager Aaron Greenberg told G4TV that Microsoft may do away with the point system altogether, and may instead employ a more direct purchase system, presumably similar to the Playstation Network wallet. "We never intended to mislead people," Greenberg said regarding the point exchange rate.

Lassoff is seeking monetary compensation for the class, as well as court-determined damages and interest. At the time of writing, Microsoft has not issued a formal response to the case.

Originally Published: Issue 863 - February 3, 2010

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