Apple to refund consumers US$32.5 million for in-app purchases made by their children without permission

At least US$32.5 million will be given back to parents for purchases made while playing games

PUBLISHED : Thursday, 16 January, 2014, 1:24pm
UPDATED : Friday, 17 January, 2014, 4:42am

Apple will refund at least US$32.5 million to consumers to settle a federal case involving purchases that children made without their parents' permission while playing on mobile apps, the United States government announced on Wednesday.

The Federal Trade Commission said Apple would make full refunds for any such in-app purchases made by children using mobile phones and other devices and incurring charges by accident or without parents' permission.

Apple will have to change its billing practices to make it more obvious that a purchase is taking place during the course of the game or app.

The commission said it had received tens of thousands of complaints about unauthorised charges.

Edith Ramirez, the agency's head, said the settlement involved mobile apps and charges racked up when children bought things such as virtual currency or dragon food.

In some cases, Ramirez said, charges ran into the hundreds and even thousands of US dollars.

One parent told the commission her daughter had spent US$2,600 in Tap Pet Hotel, a game in which children can build their own pet hotel.

The game is free to download and play but involves in-app purchases where children buy treats and coins for their pets.

Other consumers reported unauthorised purchases by children totalling more than US$500 in the apps Dragon Story and Tiny Zoo Friends.

"You cannot charge consumers for purchases they did not authorise," Ramirez said.

According to the commission's complaint, when parents entered their password while a child played a game, Apple did not make it clear that that they unwittingly might be buying something in the game the child had clicked on.

Parents also were not told, the commission said, that entering their password opened a 15-minute window in which children could make unlimited purchases without any further action by an adult.

Apple will have until March 31 to come up with a billing system that ensures the company obtains consumers' informed consent before billing them for in-app purchases.

The US$32.5 million payout is a minimum. As part of the settlement, Apple must pay full refunds to consumers for children's unauthorised purchases, so that figure could climb.