Is Apple Too Quick To Shut Down Potentially Hacked Accounts?

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A reader, Mike, sent in a tale of woe so odd and draconian that I’m not even sure what to think of it. On one hand, Apple is protecting its interests when it comes to fake gift cards and other potentially costly hacks and, on the other hand, their reaction is far out of proportion to the actual situation.

Mike’s account was hacked in January of this year and $80 worth of iTunes cash drained from his account. This is similar to the hack that occurred over the summer resulting in “about 400″ hacked accounts and continues even to this month as evidenced by this thread in Apple Support. Mike writes:

A few weeks after Christmas my iTunes account was hacked and the $80 in gift cards I was given for Christmas were drained by the hacker. I contacted Apple, was treated well and had the fraudulent purchases restored. After securing my account, things were back to normal until a week ago.

I tried to sync my iPhone and was given a message saying my Apple ID had been disabled. After contacting support and waiting 1 week for their “investigation” I was told my account would be permanently disabled and I would not be able to get updates to any of the approx $200 worth of apps I have purchased for 2 iPhones over the past 3 years. I have no idea how this affects music and video purchases I have made from iTunes in that same time period.

In the process of doing this they have made it impossible for me to redeem the $80 in gift cards I was given as gifts at Christmas. This is illegal and I have reported it to my attorney general in WA state.

Now I know $80 here and $200 there is nothing. But doing a quick search it appears this is standard Apple practice, and a widespread one at that. With word of the iPhone moving towards NFC payments and Apple becoming more ingrained in our financial lives this practice is extremely troubling.

I asked him what they told him when they killed his account and he wrote this:

They never say. The most I can pull is there is a part of the TOS that mentions they can shut you down if they suspect fraudulent use of gift cards or other payment – which I have not done. Also they do not mention they are removing my access to the $80 of legally purchased gift cards i had already loaded into my account The entire email is included below:

Hello Mike,

Thank you for your patience while we investigated your request to enable your iTunes Store account "[redacted]."

We have finished this investigation and have determined this account must remain disabled.

Please note that because your account was disabled, you will lose the ability to update applications purchased with this account.

For information about Apple's right to close customer accounts, please see the iTunes Store Terms of Sale:

http://www.apple.com/legal/itunes/us/terms.html

You will still be able to play all of the items that were purchased with that account, and you may certainly continue to purchase from the iTunes Store by creating a new account.

I apologize for any inconvenience.

Sincerely,

Al
iTunes Store Customer Support

Essentially they threw the baby, soap, and rubber duckie out with the bathwater, resulting in a few hundred dollar loss on Mike’s part and a set of useless, non-updatable apps on the iPhone. As Mike explains, the process was very fair at the beginning but after an odd period of “investigation” the decision to shut down his account can be described, at best, as ridiculous.

We’re going to drop Apple a line this afternoon to see what’s going on here, but hopefully this will serve as a lesson to us all: it’s Apple’s sandbox, we’re just playing in it.

Have you guys dealt with this sort of treatment on the iTunes store? Is there any recourse for a locked out user?