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1/22/2010
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Microsoft Points Draw Class Action Suit

Attorney says Xbox Live customers aren't getting what they pay for when they use Microsoft's virtual currency.

A Philadelphia-area attorney has filed a class action suit against Microsoft, claiming the software maker ripped him off after he bought points that were supposed to allow him to make purchases over the online Xbox Live Marketplace.

Samuel Lassoff, of Horsham, PA, said an invoice he received earlier this month from Microsoft included charges for purchases he couldn't complete due to a balky download system—and he claimed it wasn't an accident.

Microsoft "engaged in a scheme to unjustly enrich itself through their fraudulent handling" of his account, Lassoff charged in papers filed earlier this week in U.S. District Court for Eastern Pennsylvania.

Microsoft allows customers to buy games and other downloadable media from its Xbox Live Marketplace with "Microsoft Points" that users must purchase with real currency, typically through a credit or debit card.

But Lassoff claimed he and at least "hundreds" of other Xbox Live users have been overcharged. "Microsoft breached that contract by collecting revenues for digital goods and services which were not provided," Lassoff said in his lawsuit.

Microsoft's Points system has drawn separate criticisms from other corners—to the point where the company is considering scrapping it altogether. Microsoft Xbox product manager Aaron Greenberg told G4TV this week that it might do away with the points system and move to direct cash purchases on Xbox Live Marketplace.

The problem: Microsoft sells points in batches that frequently don't correspond to the number required to buy particular items, meaning customers often have leftover points—which they paid for—that they can't use. "We never intended to mislead people," Greenberg said.

Microsoft has also been hit with complaints that the Xbox Live Marketplace isn't secure, and that users have had their accounts hacked and Microsoft Points stolen.

As for Lassoff, he's no stranger to suing big tech companies and other organizations. Records show he sued Google in 2006, claiming the search ads he placed fell victim to click fraud. He also sued Bally's Casino in Atlantic City in 2005, claiming he was attacked by a drunken patron while sitting at a poker table.

Lassoff didn't immediate respond to a call seeking comment. Microsoft has yet to file a formal response in the case.

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