Microsoft Points Subject Of Class Action Lawsuit

Microsoft's Microsoft Points virtual currency has become the subject of a class action lawsuit alleging that Points-based pricing is deceptive to consumers, according to Information Week. The suit was filed by Pennsylvania attorney Samuel Lassoff, who argues that Microsoft charged him for purchase of digital items he never received, due to problems occurring during data transfer. Lassoff claims that the charges were not accidental, but part of a systematic plan on the part of Microsoft to defraud Xbox Live users. 

Key to Lassoff's suit is how Microsoft sells its virtual currency. Users can purchase Microsoft Points in minimum batches of 500 or 1000, but many digital items (including virtual goods and pets for avatars) have prices ranging from 200 to 400 points. Most consumers who purchase Microsoft Points end up with unspent increments sitting around in their accounts that they simply can't spend. Lassoff is clearly arguing that Microsoft's price structure is, in effect, charging consumers for amounts of virtual currency that they may never be able to spend.

Lassoff is well-known for suing large tech companies over personal grievances. He sued Google in 2006, claiming that search ads he placed with the company were victims of click fraud. He also sued Bally's Casino in 2005, claiming a drunken patron attacked him while he was sitting at a poker table. Despite this, it seems very likely that Microsoft's decision to begin downplaying the role of Microsoft Points in pricing digital goods on Xbox Live was influenced by this lawsuit. 

The outcome of this suit could set major precedent for how publishers are allowed to sell virtual currency to users. Right now Microsoft's practice of only selling virtual currency in bundled amounts is fairly common among MMOs and social games that monetize through sales of virtual goods. If courts ruled that Microsoft was misleading or defrauding consumers by doing this, then it could certainly lead to changes in the way virtual goods are priced and virtual currencies sold to users. 

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