In a statement released today, the FTC confirmed that Apple Inc. has agreed to refund a minimum of $32.5 million dollars to its consumers for allowing children to make in-app purchases without their account holder’s consent.
The formal complaint was initiated after an influx of angry parents complained about being billed $100 to $1,000 by kid-friendly apps with deceptive IAP systems. Apparently, after the parents entered their Apple ID password and handed the device over to their child to play with they were not notified that by entering their ID and password they were approving not only the single in-app purchase but also a 15-minute time frame which allowed children to make unlimited additional in-app purchases without requiring to re-type the password.
For those customers that were unfairly billed and can prove that their child made in-app purchases without their knowledge a refund will be made.
Apple has been mandated to change their billing practices before March 31, 2014 to prevent this type of incident from happening again. There must be a clear notice verifying consent to a user before billing them for any in-app purchase.
In a memo to employees from Apple CEO Tim Cook it stated, “It doesn’t feel right for the FTC to sue over a case that had already been settled. To us, it smacked of double jeopardy. However, the consent decree the FTC proposed does not require us to do anything we weren’t already going to do, so we decided to accept it rather than take on a long and distracting legal fight.”
For more information on FTC compliancy policy rules and the hefty fees associated with violation check out our previous post, “What Every Developer Should Know About the Coppa 2.0 Law.”