The U.S. Federal Trade Commission on Wednesday announced a settlement had been reached with Apple Inc. The company agreed to refund consumers at least $32.5 million following allegations that it received millions of dollars from charges incurred by children whose parents had not approved the purchase, according to a FTC press release.
Apple is required to give notice of the availability of refunds to all consumers charged for in-app charges with instructions on how to obtain a refund for unauthorized purchases by kids, according to the news release. Examples of in-app purchases include "bonus game levels, maps, experience points, subscriptions, and recurring services," according to the Apple website.
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, according to the news release.
Under the terms of the settlement with the FTC, Apple will be required to change its billing practices to ensure that it has obtained express, informed consent from consumers before charging them for items sold in mobile apps, according to the news release.
In its complaint, the FTC notes that Apple received tens of thousands of complaints about unauthorized in-app purchases by children. One consumer reported that her daughter had spent $2,600 in the app “Tap Pet Hotel,” and other consumers reported unauthorized purchases by children totaling more than $500 in the apps “Dragon Story” and “Tiny Zoo Friends.”
Apple offers many kids’ apps in its App Store that allow users to incur charges within the apps. Many of these charges are for virtual items or currency used in playing a game. These charges generally range from 99 cents to $99.99 per in-app charge.Politico reports the company settled a lawsuit last year that required Apple to notify 23 million iTunes users regarding the possibility of unauthorized charges and to provide cash or credit reimbursements for purchases over $30.