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Crime Iphone The Almighty Buck Apple Games

Game Maker Says 40% of iTunes In-App Buys Are Fraud 114

Posted by Soulskill
from the most-of-the-remainder-are-probably-three-year-olds dept.
chicksdaddy writes "Hong Kong-based Lakoo, maker of the Empire Online game, says that 4 in 10 in-application purchases by users of the iOS version of its MMORPG are fraudulent, and made through compromised iTunes accounts. But Apple has turned a deaf ear to its requests for help to stop the bogus activity."
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Game Maker Says 40% of iTunes In-App Buys Are Fraud

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  • by ClaraBow (212734) on Friday March 11, 2011 @05:25PM (#35457250)
    I'd imagine that more developers would come forward and complain.
    • Re: (Score:3, Informative)

      It likely IS a problem but Apple..... like Paypal..... chooses to ignore the abusive, illegal payments. Paypal eventually ended-up before the US DOJ and forced to refund money back to various persons (I got $75). Perhaps the same will happen with Apple in a few years.

      • by PopeRatzo (965947) * on Friday March 11, 2011 @06:09PM (#35457714) Homepage Journal

        It likely IS a problem but Apple..... like Paypal..... chooses to ignore the abusive, illegal payments.

        What incentive do they have to protect their customers? This isn't the 1970s any more.

        Understand, it's not personal, it's just that the corporations have declared war on us. They're just doing what they were designed to do: profit no matter who gets hurt. Yet you still hear people say that there's "too much regulation". "Too much government". When corporations are the ones funding election campaigns, what do you expect lawmakers to do but whatever the donors say.

        The corporation is a person that doesn't pay tax like a person.

        • by maxume (22995)

          Part of the problem is that there is plenty of bad regulation.

          The over-protection of corporations is probably high up on the list though.

          • by h00manist (800926)

            Part of the problem is that there is plenty of bad regulation.

            The over-protection of corporations is probably high up on the list though.

            The other part of the problem is that people think the elections for powerless politicians who no longer control society mean there is actual democracy and freedom, and there is no need to protest control by corporations who effectively dictate how much of society works.

            • now how did that happen.... oh elections for politicians that created the system that rendered the people powerless... who'd have though, government wanting the people to be powerless. obviously not the voters.... or maybe it was..

              • by bball99 (232214)

                that's it! blame the Mexicans! blame the NRA! blame everyone and anyone *except* oneself!

                no such thing as personal responsibility nowadays...

                and anyway, overpriced phones and insipid apps are for idiots

                now all you geeks get off my Internet front lawn!

                • that would be:
                  DSM-IV antisocial personality disorder (ASPD), and the ICD-10 antisocial personality disorder and dissocial personality disorder (DPD).

                  aka psychopath or sociopath.

                  • compulsion to lie
                    blame other people
                    lack of empathy
                    no feeling of guilt.
                    seems to use words without actually understanding the meaning.

                    Apparent lack of remorse[4] or empathy for others
                    Persistent lying or stealing (my lawn)
                    Cruelty to animals[5] (e.g. geeks)
                    Poor behavioral controls — expressions of irritability, annoyance, impatience, threats, aggression, and verbal abuse; inadequate control of anger and temper
                    A history of childhood conduct disorder
                    Recurring difficulties with the law
                    Promiscuity
                    Tendency to

        • Yet you still hear people say that there's "too much regulation". "Too much government". When corporations are the ones funding election campaigns, what do you expect lawmakers to do but whatever the donors say.

          Do you not see the inherent contradiction in saying that there isn't too much government (at least that is how the first part of this parses for me), followed by saying that lawmakers do what the corporations tell them to do? If the lawmakers are passing laws that the corporation tell them too, how can getting them to get rid of some of those laws not be a good thing?

          • by KDR_11k (778916)

            The problem is that politicians have to obey both their bribers and the public (after all they don't get re-elected otherwise). The easiest way to do that is to cut the regulations big business wants gone and then throw up a smokescreen of misinformation so nobody complains that it's the wrong regulations being killed.

            • by PopeRatzo (965947) *

              The problem is that politicians have to obey both their bribers and the public (after all they don't get re-elected otherwise).

              No, the politicians have to "obey" their bribers, but they only have to fool the public. And with corporate ownership and consolidation in the media, that's becoming easier all the time.

              And when the telecoms and other big conglomerates finally take total control over the Internet, which is inevitable without Net Neutrality laws, then the media will be entirely under corporate cont

          • by PopeRatzo (965947) *

            Do you not see the inherent contradiction in saying that there isn't too much government (at least that is how the first part of this parses for me), followed by saying that lawmakers do what the corporations tell them to do?

            No contradiction here. There's not "too much government" there's "too much money in elections".

            Get a handle on campaign finance, and you'll see government magically become "right-sized".

            • Shrink government and you'll magically see the amount of money in elections diminish. I believe it is easier, with less chance of abuse of the system my way than your way. I don't see any way to reduce the amount of money in elections as long as so much of our economy is dependent upon the whims of the government.
              • by PopeRatzo (965947) *

                Shrink government and you'll magically see the amount of money in elections diminish.

                Shrink government and you'll magically see the amount of civilization diminish, too. "Size" when talking about government is a very misleading term. It doesn't mean how many people work for government or how many laws are on the books or even the amount of money the government spends. "Size" of government is a construct of people who would really prefer fascism. When you hear someone talking about how government is "too

                • You are clueless about the people who talk about smaller government. It is people like you who support the advance of fascism in government. You support the expansion of government power. I have seen you post such things repeatedly here. Most people who talk about shrinking the size of government understand that government is inherently inefficient. Those I know who wish to see the size of government reduced are talking about how much money it spends and how many people work for the government and how many
                  • by PopeRatzo (965947) *

                    You are clueless...

                    Son, that's not a way to talk to people. I'm not sure how you were raised or if you grew up in an abusive family or something, but you'll do better if you engage people in a more reasonable and respectful way.

                    And if you want to communicate with people, it's better if you do it with something besides demonstrably wrong Fox News talking points. Using bold face on bald face lies does not lend them a ring of truth.

                    We have tried periods of time in our nation's history where regulation was li

                    • There is no reason to engage you in a reasonable and respectful way because I have read your posts on here and you have never demonstrated even a passing acquaintance with reality. When I was in college I thought like you do. Then I got out in the real world and learned how things work. Guess what? I work fewer hours for more pay today than I did in 2000. Of course, I recognized that my career was a dead end and changed careers in that time.
                      You are a fan of increased regulation of campaign finance, despite
                    • by PopeRatzo (965947) *

                      When I was in college

                      I'm not sure I believe you. If you'd been to college you'd have learned that the family name was "di Medici" with a small "d" and capital "M". If you're going to try to use historical names humorously, it pays to get the details right.

                      There is no reason to engage you in a reasonable and respectful way because I have read your posts on here and you have never demonstrated even a passing acquaintance with reality.

                      So you are only respectful to those who "demonstrate a passing acquaintan

        • by Miseph (979059)

          Have you ever noticed that everybody agrees there is too much regulation, and yet *without fail and regardless of who is in power* the amount and complexity of regulation always goes up... even especially when moves are made to limit the number of overt restrictions?

          The corporations *love* that business is over-regulated, they *love* that the rules are so Byzantine as to require massive legal departments with high-powered attorneys salary, they *love* that this places the barriers to entry for any newcomers

          • by PopeRatzo (965947) *

            The corporations *love* that business is over-regulated, they *love* that the rules are so Byzantine as to require massive legal departments with high-powered attorneys salary, they *love* that this places the barriers to entry for any newcomers so high that such things essentially don't happen.

            Yes of course, because since 1980s they have been the ones that actually write the regulatory laws.

            The regulations they hate are those prehistoric ones about "anti-trust" or "environmental protection". You know the

      • Yup, I know someone who's job is doing a lot of refunding of these transactions. The offending apps are well known, he even pointed out a couple apps on the top downloads. The developers (and apple) are the ones that pocket the money
    • Re: (Score:2, Informative)

      by VGPowerlord (621254)

      Like, say, the developers of Lugaru HD [slashdot.org]?

      • Re: (Score:3, Insightful)

        by VGPowerlord (621254)

        ...and I realized after the fact that this article is about in-game purchases and fraudulent credit cards, not fraudulent programs. Whoops.

      • by Dahamma (304068)

        Those seem to be totally unrelated issues (beyond the part about Apple not giving a shit, I guess).

        That was someone taking a GPL game and selling it on the store, where the complaint in the article is about people using hacked iTunes accounts for in-app purchases. It's copyright violation vs. credit card fraud, "apples" and oranges...

    • Quite frankly I'm surprised that the developer is coming forward to complain that people are buying things, even if it is without their knowledge, unless of course there is some reversal process that is eating up their margins (probably is).
      • as a developer I think i can shed some light on why they would come forward. People complain to the developer. Apple is far better at ignoring complaints than I am. Frankly, I don't know how they do it. I strongly suspect there are people at Apple whose job is to listen to the complaints, get drunk and commiserate on how everything sucks and nobody appreciates the work they do.

        I didn't RTFA, but i would think the developer gets complaints from the account holders that people are buying stuff in their gam
        • by Miseph (979059)

          Apple has enough money to hire legions of "customer service reps" who have absolutely no authority to do anything aside from escalate your call to their supervisors... who also have no authority to do anything besides escalate to their supervisors, who in turn have no authority to do anything but escalate it further. Repeat ad nauseam. They require each tier of powerlessness to provide a minimum 40 minutes of stalling prior to escalation, do not share any information between tiers (requiring you to repeat e

  • This ... (Score:2, Interesting)

    by gstoddart (321705)

    This is why I have actually turned off in-app purchases.

    I don't want it (I'm not willing to buy stuff to make a free game easier/shinier), and I don't trust the developers with direct access to my account. Of course, I haven't given Apple any means of actually billing me -- for pretty much the same reason.

    Though, in this case, it seems to be more about people getting into other people's account and doing fraudulent charges.

    I just think the whole concept of letting a game have a shortcut to my VISA is a stu

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      I don't trust the developers with direct access to my account.

      We just released an app with in-app purchase. You'll be happy to know that we (developers) don't have direct access to your account. Apple handles all the authentication and transaction, and all we (developers) get is a digital receipt of the transaction.

      • Re: (Score:2, Interesting)

        by gstoddart (321705)

        We just released an app with in-app purchase. You'll be happy to know that we (developers) don't have direct access to your account. Apple handles all the authentication and transaction, and all we (developers) get is a digital receipt of the transaction.

        Oh, I get that you don't have the account information.

        That doesn't mean that I would trust you or any other developer with anything in the game which could attempt to spend my money. For one, I'm not willing to give you any, and two, I don't trust the mech

        • by LordNimon (85072)
          I agree. I've turned off in-app purchases because I just don't trust the mechanism. There's no way for me to know that when I authorize an in-app purchase, that I will actually be paying what I'm supposed to pay, and that I'll get what I'm being sold. Once I type in my password, who knows what really happens?
        • by perpenso (1613749)

          ... I don't trust the mechanism. Any game that wants to pop up a "Click OK to buy in-game" crap, well, I'm not going to buy it, and I don't want to inadvertently click "Yes" ...

          Actually the mechanism is part of Apple's built-in App Store app. I take it you don't buy things directly from your device, only through your computer? Also you would have to click yes more than once. Once for the game's user interface and then again for the Apple's user interface.

        • by perpenso (1613749) on Friday March 11, 2011 @06:16PM (#35457760)

          Good luck with your app, but for a lot of us, in-app purchases is a sign that maybe I really don't want your app very much to begin with.

          As a developer using in app purchase I am honestly interested in what you would suggest.

          I offer a technical product rather than a game. A single app that combines the functionality of various traditional handheld calculators, scientific, statistics, business, hex, etc. Perpenso Calc [perpenso.com]. Rather than have a single high priced app that probably included functionality a particular user would not care about I decided to have a modestly priced app that offered basic built-in functionality -- scientific, rpn, fractions, complex numbers, ... -- but was expandable using in app purchases. This allowed a person to pick and pay for only the additional functionality -- statistics, business and hex -- that they cared for. I suppose another option would have been to offer several medium priced apps, one each for statistics, business or hex but what if a person was interest in more than one? They would need multiple apps, that would be more costly. Also more inconvenient if they needed to move data from one calculator to the other.

          In your opinion am I missing something? What alternatives would you suggest? Thanks in advance. Seriously, I am curious.

          • by Draek (916851)

            Dunno if you can do such a thing on the Apple store (I do think they had a prohibition on apps that depends on other apps), but one alternative would be to create a system of "plugins" that give owners of the original app the extended functionality, and make each plugin available individually on the Apple store, much like Steam does for videogames' DLC. That way you'd leverage Apple's own system to handle payment and such, avoiding the need to handle that inside your own app.

        • For the same reason that I don't let any company I deal with have access to my checking account so they can directly take money. I will decide when I give you money

          Me too. Quite some time ago was my first experience with an automatic deduction from my account. My bank even required a form indicating who was authorized and for what amount.

          Sounded good to me. Until the price increased and my bank automatically paid the higher than authorized amount. That's when I realized it was nothing more that you have authorized them to debit your account. Stopped that and have never trusted that mechanism again.

          • by lgw (121541)

            The fun part is that checks now work the same way. Anyone who you right a check to (well, anyone big enough to electronically present checks) can present it for any amount and get paid that amount from your account - the amount on the face of the check is nearly irrelevant. Of course, the court system is likely to be quite unhappy with anyone who robs you this way, but that's long after the fact, and there have been problems with fraudsters. Fun, right? Your check will only be examined by a human if pre

        • by Bananana (1749762)
          Are you paranoid or what?
    • by saboosh (1863538) on Friday March 11, 2011 @05:57PM (#35457582)
      Developers do not have access to your visa, regardless of how you pay for content in iOS. All iOS purchases, whether they be appstore or in-app, are payed to Apple, period, end of story. Apple, then, takes care of distributing the payment. Apple mediates everything. The developer is cut a check from Apple after they take a cut, even for in-app purchases.
    • by tyrione (134248)
      Ignorance is bliss. Do some research before you vilify.
    • by bball99 (232214)

      "I just think the whole concept of letting a game have a shortcut to my VISA is a stupid idea."

      and there you have the problem in a nutshell!

      mod up +10 points!

    • Retailers are pretty much selling iTunes cards at a discount almost year-round. Every 3-4 weeks there will be a 20% or 25% deal. Stock up, and you never have to pay full price for anything. (And no need to link a credit/debit card of course)

  • Here I was hoping they had made Empire (old strategy game from DOS days) for the iPad/iPhone

    Oh well.

    That the purchases can be made for this company's product without buying the original product to allow in game purchases does seem odd. If they aren't getting the money then who is?

    • by dingen (958134)

      Here I was hoping they had made Empire (old strategy game from DOS days) for the iPad/iPhone

      Come on, this is Slashdot, you don't need to explain what Empire is. Speaking of which, there is at least a remake [classicempire.com] for Windows XP.

      • by lgw (121541)

        Did you know that that was the game that pushed RMS over the edge and into his obsession with Free Software? When that game came out, they argued that the pre-existing public domain unix empire game (which was far better, multiplayer, etc) violated their copyright, and won. I don't even remember what the dispute was any longer, but that's when RMS discovered that "public domain" was no kind of protection at all and some new kind of license was needed to keep software free. This all used to be in his "GN

  • by Froggie (1154) on Friday March 11, 2011 @05:38PM (#35457390)

    What seems to be missing here is any sort of motive. Both the game developer and Apple should be worried - running down a competitor's reputation is a fairly poor motive for this, getting refunds doesn't seem to be it, so why are they picking on this app and why are spending other people's money with no hope of retrieving it?

    • Re: (Score:2, Informative)

      by Anonymous Coward

      What seems to be missing here is any sort of motive. Both the game developer and Apple should be worried - running down a competitor's reputation is a fairly poor motive for this, getting refunds doesn't seem to be it, so why are they picking on this app and why are spending other people's money with no hope of retrieving it?

      Looks like most of the Empire Online in-app stuff is buying in-game currency. In other words, this is just another bunch of Chinese gold farmers, who likely purchase the currency then offload it to other compromised accounts.

      • by Froggie (1154)

        Exchanging incompletely authorised credit for fungible goods is like cashing a cheque - you're buying the rights to a debt from a known bad debtor at full face value.

        Some day in the distant future the internet will learn this.

    • Re: (Score:3, Informative)

      by increment1 (1722312)

      The motive is financial.

      Steps:
      1. Compromise account.
      2. Buy in game goods with compromised account's Visa, gift cards, or (perhaps) fraudulently generated gift cards.
      3. Sell in game goods for real currency.

      The reason this particular developer is getting hit the hardest is probably because their game is the current best way to realize profits from a compromised account. For many other apps with in app purchases, it is probably difficult to convert your purchase back into money.

    • by Bananana (1749762)
      The developer has a motive - now you heard it's name and it's on-line game's.
  • by Grapplebeam (1892878) on Friday March 11, 2011 @05:41PM (#35457426)
    With their 80% market share.
  • It seems that most of the complaints for compromised iTunes accounts come from areas with high rates of piracy or malware infections. I wonder how much this of this comes from keyloggers or Trojans in pirated software / questionable web sites. It may be that there are app developers that work with malware developers who target iTunes accts because it may go un-noticed longer than blatant credit card or identity theft.
  • by Anonymous Coward

    Just three weeks ago I had $120 in charges in the space of 6 minutes, Had I not heard my iphone going off from the constant emails and woken up I don't know how much higher it would have gotten.

    iTunes did refund my account although it took 3 weeks for the money to get back on my card. Also the iTunes store has NO Phone support so all transactions and interactions are completed over email and it takes an average of 24 hours for a response so the dealings between myself and paypal, myself and visa, and myself

    • by bball99 (232214)

      and therein lies the problem...

      i had a series of small, fraudulent charges on a MasterCard account a year ago (during Xmas season); a couple clicks on-line and the charges were refunded by my bank

      but having to through iTunes (read similar to 'Paypal') means being at the mercy of a middle party

      i will NEVER use this type of purchase mechanism

  • Me too! (Score:1, Informative)

    by gizmonty (1636241)
    This happened to me just last week. I received an email to say I had AUD$23.99 deducted from my iTunes balance (provided by iTunes cards purchased at 25% off so really only AUD $17.9925!) from this exact in app purchase. Needless to say I checked my account immediately and confirmed this. My credit card details were registered with iTunes but they had been mysteriously deleted. I changed my password and contacted Apple with low expectations. I was contacted by Apple within 24 hours stating that they had rev
  • YES DEFINITELY (Score:1, Informative)

    by the stapler (658635)
    A few weeks ago my wife had her iTunes account hacked and about $60 worth of credits charged 'in game' through this game we had never heard of nor downloaded. iTunes support was slow to respond. Fortunately, we did not (and will not) have a credit card associated with our account. Oh, and the jerk downloaded one of our Soup episodes. I blame Apple and the developers that design a game to have such high priced in-game downloads.
    • by jo_ham (604554)

      I blame your wife for having a shitty password.

      Seriously, if this was anything other than "apple" we'd all be talking about account security issues.

      If your Apple ID is compromised then you either a) had an easy to guess password, b) logged into it on a computer with a keylogger installed, c) gave your password to someone you thought you could trust or d) sorcery - Apple products are magic after all.

      Strong password that you don't share with anyone and up-to date security on any system you log in on = no prob

  • As an active apple/iTunes purchaser and one of others I know. No one I know or have any connection to has heard of this happening. Oh, and how is a compromised iTunes account and buying apps any way helpful or useful? (no really, are the apps DRMed as the music? Can you swap and share apps?)
    • by tlhIngan (30335)

      As an active apple/iTunes purchaser and one of others I know. No one I know or have any connection to has heard of this happening. Oh, and how is a compromised iTunes account and buying apps any way helpful or useful? (no really, are the apps DRMed as the music? Can you swap and share apps?)

      First of all, they compromise your iTunes account, which can be done either by keyloggers, or just using the same old email/password combination that they got by compromising another site.

      The reason they do this is in th

  • Sounds like a great way to launder money from compromised accounts.

    • by Anonymous Coward

      Sounds like a great way to launder money from compromised accounts.

      Apparently you don't know a whole lot about laundering money then.

  • I do not really understand the story, or specifically why the blame should be pointing exclusively to Apple.

    So 40% of purchases are fraudulent and therefore reversed. That seems like a high figure, but who is the victim, and who is responsible?

    I honestly cannot see a game company being the victim - in game purchases cost them nothing, so fraudulent purchases are only a problem if they replace real purchases, and I cannot see that happening (unless there is a black market for in game items?). Maybe the rea

  • ...made me think they meant the creators of the game creation tool Game Maker. Gotta watch out how you use capitalization.

  • I submitted this story a while back: http://slashdot.org/submission/1478650/Apple-profits-from-rampant-piracy-in-the-App-Store [slashdot.org] but it never made it to the front page.

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