Apple Refunds $32.5 Million After Kids Ran Amok With In-App Purchases

Apple has agreed to refund $US32.5 million to US customers after the Federal Trade Commission found it was too easy for kids to make in-game transactions without their parents’ permission. Australian parents won’t be seeing any of this money, unfortunately. Here’s what you can do to safe-guard your own device from accidental in-app purchases.

Apple reached a settlement with the FTC today regarding the slippery practice of in-app purchases in its App Store. In addition to the $US32.5 settlement, the company has also agreed to change its App Store billing practices to make it clearer when users are about to be charged.

The chief issue revolved around the existence of a 15 minute loophole which allowed users to make in-app purchases without re-entering their iTunes password.

“The FTC’s complaint alleges that Apple violated the FTC Act by failing to tell parents that by entering a password they were approving a single in-app purchase and also 15 minutes of additional unlimited purchases their children could make without further action by the parent,” the FTC explained in a statement.

“The settlement requires Apple to modify its billing practices to ensure that Apple obtains consumers’ express, informed consent prior to billing them for in-app charges, and that if the company gets consumers’ consent for future charges, consumers must have the option to withdraw their consent at any time.”

Prior to the settlement, Apple reportedly received tens of thousands of complaints about unauthorised in-app purchases by children. In one such incident, an iPhone owner’s daughter managed to rack up a bill of $US2600 in the game Tap Pet Hotel.

While this is a US-only decision that is unlikely to affect other territories, it remains a timely reminder that tablets and smartphones shouldn’t be treated as toys for kids. Thankfully, there are steps you can take to avoid this sort of thing while still allowing your kids to enjoy their favourite iOS games.

The first step is to disable the 15 minute window on your iOS device so that it will always ask user for a password. Here’s how it’s done:

• Go to Settings on your device.
• Choose General.
• Scroll down and choose Restrictions. If you haven’t done this before, you’ll be asked to set up and confirm a four-digit pin. This is so your sneaky toddler can’t change the setting back. Don’t share that pin code with anyone.
• Click to Enable Restrictions.
• iOS includes numerous parental controls, but the one we’re concerned with here is ‘In-App Purchases’; scroll down the Restrictions screen to locate it. You can switch this off and disable them altogether (you can also do this for all apps). More realistically, you can tap on Require Password and change the option from ’15 minutes’ to ‘Immediately’. That way, a password will always be required for every in-app purchase.

Alternatively, you can disable in-app purchases altogether. To do this, head into Settings, General, Restrictions, and tap “Enable Restrictions”. Then enter your passcode and scroll down to “Allowed Content” and toggle “In-App Purchases” to “off”. The downside to this method is that you’ll need to re-enable it every time you want to make an in-app purchase yourself.

As we have noted in the past, you may also want to refrain from attaching a credit card to your iTunes account. Instead, use iTunes gift cards instead. Not only will that mean you can’t run up enormous bills, if you buy the cards on special (and they’re almost always on special) you actually get your in-app purchases (and apps) for less than full price.

On a final note, while I firmly believe in-app game purchases are a tool of the devil, it can’t be denied that some level of culpability must lie with the parents. If the complainants had taken an interest in what their kids were playing a lot of this bill shock probably could have been avoided. Just sayin.