Traverse City Record-Eagle

Business

January 16, 2014

Apple will refund at least $32.5M in app case

WASHINGTON (AP) — Kids gleefully snapped up virtual pet food, gems or other items while playing games on their mobile devices, while the bills from Apple Inc. mounted, often without parents’ knowledge. Now, the tech giant has agreed to refund the money.

Following tens of thousands of consumer complaints, the Federal Trade Commission said Wednesday that Apple will pay at least $32.5 million to settle a federal case involving those in-app purchases. Apple also must change its billing practices to make it more obvious that an actual purchase is taking place during the course of the game or app.

Just how could a kid buy these things without mom or dad’s knowledge and run up bills into the hundreds of dollars or more?

A game-player wants to advance to a new level or buy coins, a chest of gems or treats for a virtual pet. It takes a click, and then the app asks for a password.

The child turns to a parent, who punches it in.

But, according to the FTC complaint, Apple did not always make it clear that they were buying something. Parents also were not told that entering the password started a 15-minute clock during which kids could make unlimited purchases without any further action by an adult, the agency said.

A single purchase generally can range from 99 cents to $99, the commission said.

One parent told the FTC that her daughter had spent $2,600 in “Tap Pet Hotel,” in which children can build their own pet lodging. The game is free to download and play, but it takes in-app purchases for treats and coins for the pets.

Others consumers reported unauthorized purchases by children totaling more than $500 in the apps “Dragon Story” and “Tiny Zoo Friends.”

“You cannot charge consumers for purchases they did not authorize,” said Edith Ramirez, the commission chairman.

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