Getting Your Money Back from Charges in Kids' Apps
NEW YORK (MainStreet) Parents are getting a break. A complaint by the Federal Trade Commission has compelled Apple to provide full refunds, to the tune of at least $32.5 million, to parents whose kids incurred charges via mobile apps without clear-cut consent.
Apple's App Store is loaded with apps for kids, many of which charge a fee to purchase virtual items or "currency" used while playing a game. The charges can range from 99 cents to a whopping $99.99.
The FTC complaint alleges that Apple did not inform account holders that by entering their password they were approving a single in-app purchase -- plus 15 minutes of additional unlimited purchases their children could make without further action by the parent.
In addition, according to the FTC, Apple has often presented a screen with a prompt asking a parent to enter his or her password in a kids' app without explaining to the account holder that the password entry would actually finalize a purchase.
Under the terms of the settlement with the FTC, Apple will be required to change its mobile apps billing practices, ensuring that it has obtained express, informed consent for a purchase prior to initiating a charge. Apple must make these changes no later than March 31, 2014.
"This settlement is a victory for consumers harmed by Apple's unfair billing, and a signal to the business community: whether you're doing business in the mobile arena or the mall down the street, fundamental consumer protections apply," said FTC Chairwoman Edith Ramirez. "You cannot charge consumers for purchases they did not authorize."
In its complaint, the FTC notes that Apple received tens of thousands of complaints about unauthorized in-app purchases by children. One consumer reported that her daughter had spent $2,600 in the app "Tap Pet Hotel," and other consumers reported unauthorized purchases by children totaling more than $500 in the apps "Dragon Story" and "Tiny Zoo Friends." The agency says consumers have reported millions of dollars in unauthorized charges to Apple.
Apple will be required to provide full refunds to consumers who were billed for in-app charges that were incurred by children and were either accidental or not authorized by the consumer. Apple is required to give notice of the availability of refunds to all consumers billed for in-app charges with instructions on how to obtain a refund for unauthorized purchases by kids.
--Written by Hal M. Bundrick for MainStreet