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Apple Will Refund $32.5M To Settle In-App Purchase Complaints With FTC 252

Posted by Soulskill
from the kids-don't-care-how-much-it-costs dept.
coondoggie writes "Apple today agreed to refund at least $32.5 million to iTunes customers in order to settle FTC complaints about charges incurred by children in kids' mobile apps without their parents' consent. 'As alleged in the Commission's complaint, Apple violated this basic principle by failing to inform parents that, by entering a password, they were permitting a charge for virtual goods or currency to be used by their child in playing a children's app and at the same time triggering a 15-minute window during which their child could make unlimited additional purchases without further parental action."
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Apple Will Refund $32.5M To Settle In-App Purchase Complaints With FTC

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  • by Lumpy (12016) on Wednesday January 15, 2014 @06:33PM (#45970281) Homepage

    When I buy an app and discover it is a steaming turd, I should be able to click to remove it and get a refund within 15 minutes. That way the parent should see the charges and then reverse them easily. Granted if the parent is too stupid to check why they are getting 30 email alerts in a row after little johnny jumped on the ipad... That's their own fault.

    • by Altus (1034) on Wednesday January 15, 2014 @06:36PM (#45970313) Homepage

      Generally the receipts for these charges show up a day or 2 after the purchase. I assume apple is batching together the charges or something and processing them in bulk somehow. Or maybe it just takes 2 days for the email alert to go out? I don't know.

      • by ackthpt (218170)

        Generally the receipts for these charges show up a day or 2 after the purchase. I assume apple is batching together the charges or something and processing them in bulk somehow. Or maybe it just takes 2 days for the email alert to go out? I don't know.

        I know I can't figure out my AT&T bill, no matter how I try. I imagine Apple has imitated that art.

        • Well, there's also going into the App Store after your kid hands back the device and seeing if there are any new purchases - they show up pretty easily under "purchased". Not 100% certain about the in-app purchases, but since it does not require a credit card to get an AppStore account...

          Meanwhile, if a parent is idiot enough to let their toddler play with a somewhat-fragile glass-faced $500+ electronic device? The parent(s) deserve the consequences, and should count themselves lucky that little Junior didn

          • Meanwhile, if a parent is idiot enough to let their toddler play with a somewhat-fragile glass-faced $500+ electronic device?

            You mean like a TV? And - toddler? There's a stage or two between toddler and adult that you seem to be unaware of...

            The parent(s) deserve the consequences, and should count themselves lucky that little Junior didn't slam it into the floor until the screen shattered.

            She keeps slamming toys into the screen, but she's not strong enough to break it. Yet.

          • by AK Marc (707885)

            Meanwhile, if a parent is idiot enough to let their toddler play with a somewhat-fragile glass-faced $500+ electronic device? The parent(s) deserve the consequences, and should count themselves lucky that little Junior didn't slam it into the floor until the screen shattered.

            My toddler takes better care of the iPad than the teen. And yes, we have all purchases turned off, to the maximum extent possible without losing functionality.

          • My parents trusting me with far more expensive computers as a toddler played a key role in my love of technology and eventual career. A few hundred bucks today is going to be much cheaper than having to keep a lib-arts major in my basement till he's in his mid 30s.
        • by immaterial (1520413) on Wednesday January 15, 2014 @07:46PM (#45970981)

          I know I can't figure out my AT&T bill, no matter how I try. I imagine Apple has imitated that art.

          It is truly complicated [twimg.com].

      • by UnknowingFool (672806) on Wednesday January 15, 2014 @06:49PM (#45970441)
        Apple batches the charges as it reduces processing fees for credit cards. If you buy 2 $0.99 apps, it costs them less to run it as one $1.98 charge with two items in the invoice than two separate charges.
    • by msauve (701917)
      ...but that's the wrong "refund window." In order to get a refund from Apple, the parents should have a 15 minute window in which they have to claim it.

      Really, specifically authorizing a purchase, and not monitoring what their kids are doing on an Internet connected device is just stupid. Stupidity should be painful.
      • by david_thornley (598059) on Wednesday January 15, 2014 @07:16PM (#45970709)

        When doing something that I knew would bore my young son, I'd often give him something to do. If I'd had an iPhone back then, I would have sometimes found a game I thought he'd like and hand it over. I wouldn't monitor him closely in those situations; if I were going to pay that much attention to him, I wouldn't need something to distract him.

        Now, suppose I downloaded and paid for a game. Game purchase authorized. What Apple didn't in general tell people is that that authorization would last past the initial purpose, unless the user dug deep in Settings to turn that feature off. What the game app probably didn't say was that it had in-app purchases that would be tempting to young children. It would be really, really easy for a parent to think he or she was handing something safe to the child without realizing it. Note that, given situations that involve young children, spending five minutes to research something that appears safe isn't always going to happen.

        Young children don't understand money. Enough adults have problems thinking of credit purchases as actually spending money on something. I distinctly remember not understanding money as anything except bills and coins.

        I have absolutely no sympathy with people who write apps like this, that are designed to siphon money from busy parents who don't fully understand technicalities.

        • also some games have in game money and other stuff that can mask the fact that it's costs real money.

          also if you played older games some had unlimited funds / auto loans / I think they may of been a few with a not so hidden cheat to get more as well.

        • by msauve (701917)
          So, your reasoning is that since you're a poor parent and you don't take the time to understand the things you're giving to your kid to play with, Apple owes you money.
          • by AK Marc (707885)
            Giving the kid a ball and ignoring them is good parenting, but handing them an educational game on an iPad and ignoring them is horrible parenting? Apple owes you a clue.
            • Sorry, but you're missing the fact that if a heroic jerb creating (in China) corporation does anything that results in you losing money because of anything that involved any decision on your part, regardless of whether you did it knowing that you'd lose money, or whether the corporation even used trickery or in some other way took advantage of the fact no reasonable person would think they'd lose money, then ITS YOUR FAULT AND YOUR DUMM HUH HUH.

              *sigh* I don't understand the mentality either. Who the hell

            • by msauve (701917)
              No. Playing ball with your kid is good parenting. Giving your kid a toy so they don't bother you isn't.

              And, somehow, I don't think all this "in-game purchase" stuff is about educational applications, except as defined by rationalizing pseudo-parents.
              • by AK Marc (707885)
                You are obviously not a parent. There's never a situation where the "best" response is to passify your child so you can deal with something else? Never? It may not be "good parenting" in your book, but it's at least sometimes necessary.

                And, somehow, I don't think all this "in-game purchase" stuff is about educational applications, except as defined by rationalizing pseudo-parents.

                If your comments don't stand up to the best case and worst case scenarios, then your argument fails.

                • by msauve (701917)
                  If you think there's ever a situation where the best response is to "passify" your child, you suck as a parent.
                  • Mod this person up, they speak the truth!I have two boys under 3 and in no way is there a situation where I need to "pacify" either of them.

                    Secondly, I buy an iPhone, I look through the settings and get to understand the device with all its features and settings.

                    My phone has restricted in app purchases adding and deleting apps. Now to make an in app purchase requires a 4 digit pin AND for me to sign in with my Apple ID. All subsequent purchases require the same action.

                    Still, if my young boys things because

                    • My policy was that there was no reason not to be nice to the kid. Kids need to learn how to deal with adversity, but the world in general usually supplies all needed adversity.

                      Therefore, if I was going to do something that didn't involve the kid, I wanted the kid to have something to play with. Being considerate to the kid was likely to result in the kid being considerate to others (well, as soon as the kid figures out what consideration is, anyway), and this seems to have succeeded very well. In retur

                  • by AK Marc (707885)
                    Your wife fell and is bleeding out, your child runs over and is trying to hug, momma, exacerbating her injuries as you are trying to stabilizer her. What should you do? Let your wife die from the unintentional damage the child is doing? Ignore your wife to deal with the child, also resulting in her death? Or pacify the child so that you can save your wife?

                    I'm sure that in that situation, you'd pacify the child, but for argument sake, you'll make up something else. Turning it into a teaching moment? Id
            • Giving the kid a ball and ignoring them is good parenting, but handing them an educational game on an iPad and ignoring them is horrible parenting? Apple owes you a clue.

              So now you want Apple to pay for the windows your kid broke with the ball?

          • by dk20 (914954) on Wednesday January 15, 2014 @10:34PM (#45972245)
            Spoken as a parent?

            So your logic is apple has no fault here even though they approve every app, and these apps with in-app purchases are approved for kids?

            I know, apple is settling because they are correct but feel like handing over some money to reduce their cash balances and its in their shareholders interest?
            PS. There is a huge difference between "owes you money" and "a refund".
            • by msauve (701917)
              Apple is only settling for the cheapest way out. I have no sympathy for some shit parent who can't responsibly supervise their kids, and expects a corporation to be a babysitter.
        • by ruir (2709173)
          There is an option to disable in-app purchases, and is disabled both in my ipad and my iphone as protection from my kid, from myself and from potentially malicious apps.
        • by perpenso (1613749) on Wednesday January 15, 2014 @09:26PM (#45971815)

          Game purchase authorized. What Apple didn't in general tell people is that that authorization would last past the initial purpose, unless the user dug deep in Settings to turn that feature off.

          I believe this was fixed long ago in an iOS update. The app authorization no longer works for in-app authorization. Once in the app a second authorization is always needed for an in-app purchase. This second authorization for the in-app purchase does seem to create a window of approval for subsequent in-app purchases, however the original app purchase no longer creates such a window. In any case the parent is aware that the app has in-app purchases.

      • the parents should have a 15 minute window in which they have to claim it

        that's almost pointless as it requires you to figure out what has happened within 15 minutes of the action.

      • by sjames (1099)

        It's not the specifically authorized purchases that parents are protesting. It's followup purchases in the inadequately documented 15 minute window following that specifically authorized purchase that they're complaining about.

        Stupidity should be punished and it is indeed quite stupid to assume that if someone authorizes a specific purchase that they are also authorizing additional purchases for the next 15 minutes unless they specifically say so.

    • by AmiMoJo (196126) *

      Can you even refund in-app purchases? Say you pay to get the last item and finish the game, or get ahead of other players, or level up your character or whatever. Can that be reversed somehow?

    • by Swampash (1131503)

      When I buy an app and discover it is a steaming turd, I should be able to click to remove it and get a refund within 15 minutes.

      You can - I've done it more than once with apps that turned out to be, as you put it, steaming turds.

      This case however is about IN-APP purchases. E.g. playing a shitty freemium game like Plants vs Zombies 2 and unlocking new plants by clicking the "buy this plant" button, which costs real-world money.

    • by tlhIngan (30335)

      When I buy an app and discover it is a steaming turd, I should be able to click to remove it and get a refund within 15 minutes. That way the parent should see the charges and then reverse them easily. Granted if the parent is too stupid to check why they are getting 30 email alerts in a row after little johnny jumped on the ipad... That's their own fault.

      In general, you can. You have to contact Apple Support for it, though, but you can get refunded on app purchases.

      Heck, in Taiwan, the law requires app sto

    • by gerardrj (207690)

      The settlement is regarding in-app purchases, not App purchases.

      Here's why there's not automatic 15 minute window to get refunds for those: Apple has not way of knowing if you USED the in-app purchase or not.

      Why's it matter? You're playing a game and need Sword of Wonderment +5 to kill Malchan. You can in-app purchase it for $1.29 or go spend an hour earning it in a quest. You're lazy so you buy the Sword of Wonderment +5, kill Malchan and then claim a refund for the $1.29 you spent on the Sword of Wonder

    • You mean the email alerts they read on the their iPad that the child is currently playing the game on?

    • I bought an app the other day that didn't work. I went to my apple account, clicked the "Report a problem with this purchase button" under recent purchases, explained the problem, and was issued a refund the same day.

      I don't know if they'd do the same thing if you just said "hey this game sucks can I return it" but then how many stores will let you return video games after they've been opened?

    • Granted if the parent is too stupid to check why they are getting 30 email alerts in a row after little johnny jumped on the ipad... That's their own fault.

      yeah, because we are all sitting around watching our inbox constantly.

    • When I buy an app and discover it is a steaming turd, I should be able to click to remove it and get a refund within 15 minutes.

      You mean like on Google Play? Oh, no, wait - There is no 15-minute refund period [for In-app purchases] - all refunds are at the discretion of the developer [google.com]

  • by vinn01 (178295) on Wednesday January 15, 2014 @07:07PM (#45970615)

    Apple was pure evil about this. I got my kid an iPod touch a few years ago. I set him up with his own AppleID, and loaded his iTunes account with a generous iTunes gift card. I told him that there were lots of free apps and he should save his money by playing the free apps.

    A couple months later he complained that he could not download any more free apps. I checked his account and he had spent his entire iTunes gift card. You need money in your iTunes account to download a free app. He got very upset and pleaded with me that he had only downloaded free app and he had not gone crazy downloading high priced junk.

    I was able to generate a detailed listing of his iTunes purchases. All the gift card money has been spent on in-game purchases. He had no idea that he was purchasing anything. He showed me. The game would ask if the player wanted something (more time, more bullets, more lives, etc.) and ask for the AppleID password. It was entirely unclear that he was spending real money. No sales receipt was ever generated. I complained to Apple and was told that they don't control in-game purchases and that since we didn't buy anything from "Apple", they could not refund anything. I'm sure that didn't stop Apple from collecting fees on the in-game app purchases.

    Will my son get his gift card money back? I doubt it.

    • by Penguinisto (415985) on Wednesday January 15, 2014 @07:11PM (#45970653) Journal

      You need money in your iTunes account to download a free app.

      1) They changed this behavior at least since 2010 - you don't even need a card (of any type) to open an account nowadays.
      2) App Store and iTunes are two different entities.
      3) If the kid is younger than 13 or so, why the hell did you not control the password?
      4) FYI: kids at that age lie. A lot.

      • by gerardrj (207690)

        Minor correction:
        You do need a payment method to open the iTunes Store account. After 24 hours you may remove the payment method from the account, but the CC is a form of identity and age verification in the process.

      • by dk20 (914954)
        I created an "appleID" a week ago, it absolutely refused to move forward until i entered a VALID credit card. I tried to enter one and it was unhappy as it was a US card and said i was in canada at the time. Clicking the small "change this location" allowed me to proceed. Granted this was on "Mavericks" and all i wanted was the updates so unsure about the credit card requirement.
    • Re: (Score:2, Insightful)

      by Anonymous Coward

      You need money in your iTunes account to download a free app.

      Bullshit. You do not need any money (CC#, gift card, or otherwise) attached to your Apple ID to download free apps.

      He got very upset and pleaded with me that he had only downloaded free app and he had not gone crazy downloading high priced junk.

      I was able to generate a detailed listing of his iTunes purchases. All the gift card money has been spent on in-game purchases. He had no idea that he was purchasing anything. He showed me. The game would ask if the player wanted something (more time, more bullets, more lives, etc.) and ask for the AppleID password. It was entirely unclear that he was spending real money.

      Bullshit. From the start, in-app purchases popped up a notification confirming the purchase, with the dollar amount right there in the confirmation [macrumors.com].

      No sales receipt was ever generated.

      Bullshit. Apple sends purchase receipts (for apps, in-app purchases, everything) to the primary email address you registered with the Apple ID.

      This here is a perfect example of how stupid and inattentive a parent had to be to allow a kid to rack

      • Exactly. It's the exact same as if you give your kid a $20 and he goes to the arcade. There's no "free" games and it's highly likely that he'll want more money. That's not really evil on Apple's part.

        The prevalence of in app purchases is disappointing though. I'd prefer to pay a couple bucks for an app and have it work all the time (without any "energy" issues). But because some users have more money that good sense, the business model of give the app away for free charge a shit ton is for some strange

      • that screen shot should have USD or other in front of the price.

        • that screen shot should have USD or other in front of the price.

          Because an 8 year old will know what "USD" means, but that "$" means real money?

      • by vinn01 (178295)

        Before you call "Bullshit", maybe you should consider the possibility that Apple has changed it's back-end processing since "a few years ago".

        When I said "You need money in your iTunes account to download a free app.", I was not saying that the Apple system currently works this way. But it did work that way "a few years ago".

        Do you really think that the Apple system works identically today as it did "a few years ago?"

        / get off my lawn.

        • by perpenso (1613749)

          Do you really think that the Apple system works identically today as it did "a few years ago?"

          The requirement for a CC or money in the account may very well have changed. However in-app purchases have ALWAYS been performed by Apple's App Store app and have ALWAYS included a confirmation that showed the item and its price. The game may offer an in-app but it can't perform the purchase, only the Apple App Store app can do that.

      • by AK Marc (707885)

        Bullshit. You do not need any money (CC#, gift card, or otherwise) attached to your Apple ID to download free apps.

        Having had an iTunes account (Apple ID) fail to download free games after a CC expiration date passed until I followed the instructions to update the payment method, I think you are wrong. Perhaps there is a way to make it work, but not easily, and certainly not in the Apple-no-hassle way Apple users come to expect.

    • by Roogna (9643)

      See, and I handled this problem by using MY AppleID, turning off the App Store, In-App Purchases, and setting the password timeout to immediately and turning on parental controls. Then, if my 6 year old daughter wants something she has to *gasp* ask her parent, just like I had to when I was a kid. Which means that I can then look at it and make an informed decision about that purchase. Yes it means I have to turn back on some things, type in my password, and turn them back off, but it also means I get to

      • by vinn01 (178295)

        Yes, I have been known to give my kid a Target gift card and drop him off at Target.

        And I review his purchases - like a parent. I call it "trust, but verify". Unlike Apple, Target provides a sales receipt. Also unlike Apple, Target puts a price tag on things. They don't call anything "free", when it's not.

      • by sjwt (161428)

        Sure, as the mall gift card wont magically increases to keep eating at my credit card.

        For a more appropriate analogy..
        You and your kids go to target, you buy something, then 10 minutes later they walk though the check out with what ever the hell they want and Target automatically charges you. At no point did they advise that they setup a system that automatically tracks who you enter the store with and will bill all purchases to you.

        You can opt out, but having not been advised of this in the first place, go

    • I call BS.

      In app purchases clearly say that they cost something. $0.99 for more energy or whatever you're buying.

      The problem is that giving a kid an iphone with an apple account is like giving them a credit card. And, given the self control of most children, even if you think yours is different, it's a very dumb idea to give them a credit card.

      • by vinn01 (178295)

        The BS is Apple calling it a free app.

        When you're playing a game, the concept of money is game money. A lot of games let you earn and spend money. Why would anyone playing a game, and presented with a choice like "do you want more energy for $0.99?", think that they are spending real USD money? Especially in a "free app".

        • by hondo77 (324058)

          Why would anyone playing a game, and presented with a choice like "do you want more energy for $0.99?", think that they are spending real USD money?

          Because they have a clue.

          • by vinn01 (178295)

            > Because they have a clue.

            Of course, in app purchases have been around since the dawn of computing. People are so clueless about new features that apps develop. People should be born knowing what app features are currently in development.

            I bet in app purchases have been around your whole life.

          • by Firethorn (177587)

            Because they have a clue.

            I have clue. You have clue. We're adults. It takes time, and often being burned, for kids to develop 'clue' because it's more than just deductive reasoning, it requires knowledge of how the world works.

            Mom's told me that as a very young child when I learned that 'paper money' was more valuable than 'coin money' I got upset and wanted paper money in exchange for things I bought when I gave them paper. Learning relational stuff, like how the item I was getting was in exchange for the money took a bit more

        • Technically it IS a free app.

          It used to be games had "cheat codes" to allow people who didn't want to put in the time and energy to master a game to move to the front of the row.

          Then someone figured out if you get rid of the cheat codes you can make people pay.

          I do understand though. It is frustrating that since the introduction of the iPhone shareware has been passed off as fully functional software.

    • by knarf (34928)

      And this, dear reader, is why you don't give iDevices to children. If you insist on giving them a touch-screen thing, get something running Android, don't activate a Google account on it - or even better install an alternative Android distribution and keep the thing Google-free - and side-load a few free games which you downloaded on another device through the Play store. Android runs fine without Google, you do not need anything else than the device and some software to run on it. No credit card. No 'iTune

    • No sales receipt was ever generated. I complained to Apple and was told that they don't control in-game purchases and that since we didn't buy anything from "Apple", they could not refund anything

      i had a similar situation, where my son spent $100+ of real money on in-app purchases. i emailed apple and they refunded it, with a stern warning that this would be the last time i'd get a refund ... which seemed completely fair.

    • He had no idea that he was purchasing anything. He showed me. The game would ask if the player wanted something (more time, more bullets, more lives, etc.) and ask for the AppleID password. It was entirely unclear that he was spending real money. No sales receipt was ever generated.

      The game NEVER asks for the Apple ID or password(*). The purchase confirmation is ALWAYS done by the built-in Apple App Store app.

      Apps display an offer but they have to turn over the purchase to the Apple App Store app once the user indicates that they want to buy. Then the App Store app independently asks for confirmation and shows the item being purchased and its price.

      (*) Well unless its malware that got past Apple's review process. In-app purchases are submitted and reviews just like app.

  • by Joe_Dragon (2206452) on Wednesday January 15, 2014 @07:09PM (#45970641)

    why need an password for free apps? needs more control like say no password for free / updates and or an pin / password for buying stuff.

    I think cable vod systems now have the free stuff not need to use the same buy screen with a price of 0 that PPV VOD gets.

     

    • why need an password for free apps? needs more control like say no password for free / updates and or an pin / password for buying stuff.

      If you didn't need a password for free apps, then anybody with access to the device could download any malicious app as long as it is free.

    • by alen (225700)

      its like OS X
      you need a password to install anything as a form of security

      UAC in Windows is annoying but the same thing is OS X is beyond awesome and cool

  • "Have you got change for $100 mil? I don't really carry small change."

  • No one above specifically mentions the actual age of the child, but instead of handing them a mobile device to play Plants vs. Zombies on, hand them (as age appropriate):

    - Legos
    - A book
    - A musical instrument
    - A "300 in 1" electronics set
    - Whatever the latest cool educational toy is
    - Better yet, send them out to the backyard to play so their BMI doesn't doom them before they're teenagers.


    This would not be an issue if your idea of "parenting" was to hand your child a device to use in an unsupervise
    • by geekoid (135745)

      - Legos
      it's Lego, not Legos. My kids have thousands, and they know the plural form of Lego is Lego.
      -A Book
      Yes, they read it on an iPad, or kindle. And they have read hundreds of books.
      - A musical instrument
      It's hard to make someone practice in any way that won't make them hate it later. However; music instrament are available in my house hold. AS an example to them, I am learning how to play Bass. I use the iPad for sheet music, tabs, and recording.

      - A "300 in 1" electronics set
      well, we have Arduino's, and

  • My unlucky number.

    I remember switching cellphone carriers multiple times after this or that premium service was exploited by one of the kids' failure to understand the minutes limit, the texting limit, or the data limit. At the time, I remember thinking I would keep looking until I found an honest cell carrier.

    Poor Diogenes.

  • You know you read too much crypto-currencies news when you read the title as "Apple Will Refund $32.5M To Settle In-App Purchase Complaints With FeatherCoin".

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