Business

Apple’s shelling out $32.5 million to parents burned by their kids’ in-app spending sprees

Child using an ipad, photo by Devon Christopher Adams

Above: Apple is paying out millions to parents bought hundreds of dollars of in-app purchases without their permission.

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Parents whose children racked up hundreds of dollars in in-app purchases on Apple devices are getting their money back.

Apple has entered into a consent decree with the Federal Trade Commission, agreeing to refund the parents of children who racked up big charges in-app purchases without their explicit consent. The company is required to pay out a minimum of $32.5 million and notify affected consumers that refunds are available. Any funds Apple doesn’t dole out within 12 months must be remitted to the FTC.

If this all sounds a bit, well, repetitive, Apple agrees. Last year, the company settled a lawsuit over this very issue, offering iTunes credits and cash refunds to parents who sued over exorbitant in-app purchases, to be paid out this year. In a memo addressed to Apple employees and acquired by Re/Code, Apple CEO Tim Cook remarks that the FTC’s involvement “smacked of double jeopardy.” Apple chose to sign the consent decree and avoid a second protracted legal battle, as the FTC’s proposal “does not require [Apple] to do anything we weren’t already going to do.”

At issue is the ease with which children could dodge that parental consent requirement: After entering your password to make a purchase on an iOS device, there is a 15 minute window to make additional purchases without additional verification. Children were allegedly using this opportunity to rack up virtual goods in the games they were playing. The in-app charges on these apps range from as little as 99 cents to a hundred dollars — in one case, a parent reported that their child spent $2,600 on in-app purchases in a single game.

More information:

Apple designs and markets consumer electronics, computer software, and personal computers. The company's best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad. Apple software includes t... read more »

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