Apple To Refund Millions Over In-App Purchases

Posted on: 9:50 am, January 16, 2014, by

(Image Credit: Apple.com)

(Image Credit: Apple.com)

Apple plans to refund millions of dollars to consumers after allowing kids to make in-app purchases without their parents’ consent.

The company will pay at least $32.5 million, after reaching a settlement with the Federal Trade Commission on Wednesday.

WHNT News 19 has been covering the problems in-app purchases can pose for parents, airing a special report called “The App Trap” that featured a Huntsville family hit with a massive surprise bill.

In that Taking Action report, mom Christi League described how she discovered jaw-dropping credit card charges totaling more than $900. Her daughter Betty had been purchasing add-ons while playing mobile games, not realizing they cost real dollars.

FTC Commissioner Edith Ramirez said Wednesday that Apple failed to notify parents that once they enter their Apple passwords for children to buy virtual items for games on their iPhones and iPads, they leave open a 15-minute window during which children can make additional and unlimited in-app purchases without additional parental authorization.

Ramirez said the window allowed children to run up millions of dollars of charges on apps including “Dragon Story” and “Tiny Zoo Friends.” One consumer complained to the FTC that her daughter had spent $2,600 in the app Tap Pet Hotel, according to Ramirez. Others reported that their kids had racked up as much as $500 in in-app purchases.

Apple has agreed to provide full refunds to consumers who have been affected, Ramirez said.

Apple has also emailed consumers who may have been impacted by unauthorized charges, but Ramirez said consumers can also reach out to Apple if they believe they have been affected.

Apple will have to modify its billing practices as a result of the settlement by notifying parents of the 15-minute window. Apple has until March to make the changes.

Apple has already settled a class action lawsuit with parents who said the company’s policy let their children rack up charges without their permission.

Experts recommend talking to your kids about in-app purchases and how they work. You can also set some controls using a PIN. For tips on how to use a PIN to limit in-app purchases on an Apple or Android device click here.

 

9 comments

  • Speed Racer says:

    I don’t see why apple should be responsible for that. Don’t have your password saved in your i tunes account or teach your kids better. Even better don’t let them ” play ” on your phone.

    • Bryan says:

      The problem appears to be that after entering the password as required for a purchase then there was a bug(feature?) where you could purchase again without entering the password. It wasn’t a setting, it always happened. That is why Apple is responsible.

    • You-know-who says:

      When you enter the password the first time it saves it automatically to the phone so you dont have to eneter it again. my driod does it.

      • bryan says:

        Our android did the same, but our ipad does not. Our ipad has asked every time that I’ve noticed.

  • nik says:

    Parents should pay for spoiled kids. You should work to obtain a smartphone. This won’t do any good as the same kids will end up causing more bizzare expenses for years to come.

    • Bryan says:

      When I hand my credit card information then I expect them to use it only to process charges that I authorize. Your perception of my kids has nothing to do with a company charging my account without the expected method of authorization. I have signed one time authorizations, I have signed recurring authorizations, but no company has blanket authorization to charge my card without my consent.

  • Nuclear Mike says:

    Every retailer wants unto the pockets of the parents thru their children’s unchecked spending…Apple should pay back the parents for making it so easy to ‘steal’ their money thru their kids since Apple targeted the children on purpose!!!

  • Speed Racer says:

    I have passwords saved on my xbox accoun, net flix and numerous others. ( except itunes ) I have never had any isuse with unknown charges, they just know better.

  • Beth says:

    I believe there should be a feature that allows the user to either have the password as it is now or to change it to where you need to enter your password each time a download or purchase has been made. Say if you let your child play with your device, you can select it to require the password for each download or purchase. Maybe when the child is at school or wherever, then you can select to have it like it is now so your not constantly having to re-enter the password. Just a thought.

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