Apple Could Refund Millions To Parents For Kids’ App Charges

WASHINGTON (January 15, 2014) Apple, Inc., would refund a minimum of $32.5 million to consumers whose children racked up charges without permission while playing on mobile apps, under a proposed settlement agreement the Federal Trade Commission announced Wednesday.

Under the settlement with the FTC, Apple would also change its billing practices to make sure it has permission from consumers before charging them for items sold in mobile apps, the agency said.

The FTC complaint alleged that Apple didn’t inform account holders that entering passwords opens 15-minute windows in which children could incur unlimited charges and that Apple often presented a screen with a prompt for parents to enter passwords in kids’ apps without disclosing password entry would finalize any purchase, the agency said.

Many of the kids’ apps Apple offers in its App Store allows users to incur per in-app charges for virtual items or currency used in playing games, ranging from 99 cents to $99.99, the agency said.

“This settlement is a victory for consumers harmed by Apple’s unfair billing, and a signal to the business community: whether you’re doing business in the mobile arena or the mall down the street, fundamental consumer protections apply,” FTC Chairwoman Edith Ramirez said.

“You cannot charge consumers for purchases they did not authorize.”

The FTC says it has received tens of thousands of complaints about the unauthorized purchases.

In one case, a consumer complained that her daughter racked up $2,600 in charges in the “Tap Pet Hotel” app, the agency said.

Other consumers complained about purchases totaling more than $500 in the apps “Dragon Story” and “Tiny Zoo Friends.”

The agreement announced Wednesday is subject to public comment for 30 days, after which the FTC will decide whether to make the order final.