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Apple hit with class-action suit over iPhone in-app game currency purchases

post #1 of 127
Thread Starter 
A new class-action lawsuit takes issue with free iPhone games that feature in-app purchases, alleging that Apple's App Store makes it easy for children to rack up credit card charges without realizing they are spending real-world money.

Garen Meguerian of Phoenixville, Penn., filed the suit this week on behalf of himself and other parents and guardians who he believes incurred unauthorized charges for game-related content. Those transactions came from children playing games on iOS devices like the iPhone, iPod touch and iPad, and making in-app transactions to purchase virtual goods.

Meguerian has two daughters, ages 12 and 9. He says that his youngest daughter was allowed to download a number of free games from the App Store, including "Zombie Cafe," "Treasure Story" and "City Story."

Though Meguerian allowed his daughter to download the free games, he said he had no idea that those games included virtual currency that could be purchased via real credit card transactions. Meguerian said his daughter's purchases of "Zombie Toxin," "Gems" and "City Cash" in free iPhone games cost him about $200.

The lawsuit notes that Apple has since addressed the issue by requiring a password for in-app purchases. Previously, once users entered their password to download an application, iOS offered a 15-minute window during which additional purchases could be made without entering the password.

But Meguerian believes that Apple's previous policy allowed the company to "pocket millions of dollars" from unauthorized transactions. And even the revised password policy found in iOS 4.3 isn't enough, he argued.



"Because the passwords now required for purchases of Game Currency are the same passwords required for any Apple purchase, minors aware of such password may purchase Game Currency without authorization from their parents for that purchase," the lawsuit reads.

The complaint also notes that the U.S. Federal Trade Commission in February decided to investigate Apple for its in-app purchase system. One popular title geared toward children that has been repeatedly cited is "Smurfs' Village" from Capcom, in which users can purchase 50 "Smurfberries" for $4.99, or 1,000 for $59.

Meguerian's lawsuit cites the title "Smurfs' Village" as relying on a "bait-and-switch business scheme." Other games mentioned in the suit are "Bakery Story," "Tap Zoo," "Tap Fish," "Glass Tower," "Sundae Maker," and "Cake Maker."

The complaint, filed in U.S. District Court in the Northern District of California, seeks damages and attorney's fees for the plaintiff and all others in the class.
post #2 of 127
why are parents giving their kids a password that is tied to a credit card? You can't sue another company for your having such poor parenting skills. My kids have to come to me to make an app store purchase with my credit card.
post #3 of 127
Maybe a parent should take a little responsibility with what their young children are doing? I don't just turn my child lose with a net connected device without taking precautions. Any net connected device. Kids will be kids, and they will explore every opportunity that exist. It's a good thing, they are sponges soaking up every experience. As parents we must be ever diligent that they do not get into trouble. I wonder if these same parents allow their young children to explore unattended the under sink storage as well, you know, where the poisons are kept?
post #4 of 127
Kids can run up a large phone bill even more easily. Do parents sue the phone companies?
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post #5 of 127
I do agree that free games should be free. I'm fine with them being a light version or filled with ads. I somewhat agree that it's slightly dishonest to offer a game for free and then make people pay with in the app to do anything with it. For these type of games, if they just charged .99 I'd feel a little better. Plus I recall SJ saying that Free games will remain free. When did that change?

On the other side, I would never allow my child to have the password attached to my credit card. That's also ridiculous, and they kind of deserve what they get. The problem is, that there are probably many parents out there that got there child an iTouch or an iPad for xmas and have no idea how to use it to handle parental controls and the like.

There is almost no way this class suite will win, but I can see Apple making a change to this policy anyway.
post #6 of 127
Bad parenting now necessitates class action lawsuits.

I am suing because I cannot control my kids.
post #7 of 127
Here's what the actual problem is...

"My iPhone is my child's babysitter but I don't have enough time to pay attention to what they are doing on it."
post #8 of 127
Quote:
Originally Posted by bcahill009 View Post

I do agree that free games were free. I'm fine with them being a light version or filled with ads. I somewhat agree that it's slightly dishonest to offer a game for free and then make people pay with in the app to do anything with it. For these type of games, if they just charged .99 I'd feel a little better. Plus I recall SJ saying that Free games will remain free. When did that change?

On the other side, I would never allow my child to have the password attached to my credit card. That's also ridiculous, and they kind of deserve what they get. The problem is, that there are probably many parents out there that got there child an iTouch or an iPad for xmas and have no idea how to use it to handle parental controls and the like.

There is almost no way this class suite will win, but I can see Apple making a change to this policy anyway.

I agree on all points. The false argument a game is 'free' when it has costs built in once bought is the key to this I think.

Those games should not be included in the free games section. Apple could easily make a definition of a 'free' game or app that stated it may contain ads but no in app sales. Even an upgrade from a light to a full version should not be from within a 'free app' rather an ad would state it has to be 'purchased from the non-free section.

Those apps or games that use the business model 'give it for free' and 'make the money from add ons' is perfectly legitimate but it should not masquerade as free, especially when targeted at kids.

Having said that parents still need to take responsibility here and not resort to suing Apple.
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post #9 of 127
Quote:
Originally Posted by alandail View Post

why are parents giving their kids a password that is tied to a credit card? You can't sue another company for your having such poor parenting skills. My kids have to come to me to make an app store purchase with my credit card.

Ah, a sensible parent.
post #10 of 127
Quote:
Originally Posted by bcahill009 View Post

I do agree that free games were free. I'm fine with them being a light version or filled with ads. I somewhat agree that it's slightly dishonest to offer a game for free and then make people pay with in the app to do anything with it. For these type of games, if they just charged .99 I'd feel a little better. Plus I recall SJ saying that Free games will remain free. When did that change?

Apple isn't making anyone charge for free games. (In fact, I think that was your idea...
Quote:
On the other side, I would never allow my child to have the password attached to my credit card. That's also ridiculous, and they kind of deserve what they get. The problem is, that there are probably many parents out there that got there child an iTouch or an iPad for xmas and have no idea how to use it to handle parental controls and the like.

Yeah, but it doesn't take a whole lot of tech savvy to not give your kids the password to your credit-card connected account. That is a separate issue from handling parental controls...
Quote:

There is almost no way this class suite will win, but I can see Apple making a change to this policy anyway.

They. Already. Did.
The changes they made were sufficient. If parents are gving kids access to their passwords, then they can't reasonably go crazy about kids racking up in-app purchases without also being concerned about racking up new app purchases.

What would their solution be? Require retina scans for any purchase?
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post #11 of 127
Quote:
Originally Posted by alandail View Post

why are parents giving their kids a password that is tied to a credit card? You can't sue another company for your having such poor parenting skills. My kids have to come to me to make an app store purchase with my credit card.

Mine has my password but still have to ask. It would be too much of a pain to have to enter the password each time they want to download a free app. They both have purchased stuff accidentally (or so I choose to believe) but nothing major. For a kid to rack up $200's worth before the parent receives an invoice from iTunes, the child must have been on a mission, or else the parent was not checking his or her iTunes receipt emails (sometimes arrive days after the purchase). It's tempting to blame bad parenting but I gave up blaming parents for anything the day I go my own kids. Parenting is complicated and everybody has issues of one sort or another. It would be a very sensible move for Apple to offer the holder of an iTunes account the option of a secondary password for in app purchases.
post #12 of 127
Partial Quote"

Quote:
Originally Posted by Bageljoey View Post

What would their solution be? Require retina scans for any purchase?

Now there's an idea! There should be an app for that!
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post #13 of 127
I am soooo sick of parents blaming others for their lack of control on their kids. Letting your child have your passwords is negligence let alone completely retarded.
post #14 of 127
iTunes already has an "allowance" system built in for the kiddies. There is absolutely no reason to provide kids with a password that accesses the Credit Card.
post #15 of 127
LMAO. If you give your password tied to a credit card to a minor, you are on your own. (And demonstrating poor judgement at the same time.)
post #16 of 127
Quote:
Originally Posted by bcahill009 View Post

I do agree that free games should be free. I'm fine with them being a light version or filled with ads. I somewhat agree that it's slightly dishonest to offer a game for free and then make people pay with in the app to do anything with it. For these type of games, if they just charged .99 I'd feel a little better. Plus I recall SJ saying that Free games will remain free. When did that change?

I play many of these free games (Storm8 games, Lil' Pirates) and have for well over a year and I have spent nothing on any of them. They are very playable without buying in-App currency. All it allows you to do is quicken the pace and/or buy optional crap like costumes. iOS has parental restrictions for stuff like this and why would this idiot father give his kids his iTunes password. Why doesn't he give them his ATM PIN number too?
post #17 of 127
Quote:
Originally Posted by swtchdtomak View Post

iTunes already has an "allowance" system built in for the kiddies. There is absolutely no reason to provide kids with a password that accesses the Credit Card.

Not having kids I didn't know that. That is so obviously the answer.
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post #18 of 127
Quote:
Originally Posted by jmillermcp View Post

.... and why would this idiot father give his kids his iTunes password. Why doesn't he give them his ATM PIN number too?

I think the original story specified "daughter", so he probably already has turned over his ATM PIN.
post #19 of 127
in app purchases are just a bad bad, evil idea. f*** zynga and all imitators.

c
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post #20 of 127
Quote:
Originally Posted by Celemourn View Post

in app purchases are just a bad bad, evil idea. f*** zynga and all imitators.

c

Evil? Maybe but a necessary one. How else are they supposed to make money? There's just not enough to be made from ads. The screen's only so big and I don't want intrusive ads taking up precious screen real estate.

Besides, there is an iOS restriction that allows complete disabling of in-App purchases. Why has this "father" not set restrictions on their iDevice? Would he sue the Internet if his kids browsed porn on his probably unrestricted computer?
post #21 of 127
Quote:
Originally Posted by alandail View Post

why are parents giving their kids a password that is tied to a credit card? You can't sue another company for your having such poor parenting skills. My kids have to come to me to make an app store purchase with my credit card.

Did you actually read the article? It's not about giving kids a password, it's about the previous iTunes/App Store set up that allowed further purchases within a fifteen minute time frame, including in-app purchases. Kids don't need a password for that. Have dad download the game, start playing, and stumble on an in-app purchase - and then there's nothing blocking the kid from just going ahead with the purchase. I doubt the kids even realized it cost anything. Now you can't do that, it forces you to input your password again.

Apple should have seen this coming. In-app purchases were ripe for this kind of problem from the start. I won't say they were hoping to reap the rewards of accidental purchases, but surely they saw the problem early and could have updated iOS to stop this long ago. I do think, however, that these lawsuits are pretty frivolous - we're talking a couple hundred dollars and a problem that has been solved. There is no real reason to go ahead with this other than greed, IMO.
post #22 of 127
Quote:
Originally Posted by swtchdtomak View Post

iTunes already has an "allowance" system built in for the kiddies. There is absolutely no reason to provide kids with a password that accesses the Credit Card.

This what happens when parents don't investigate a devices features before giving to their kids to "babysit" them. These are the same parents who buy mature rated games because their kids told them to get it.
post #23 of 127
Quote:
Originally Posted by paxman View Post

or else the parent was not checking his or her iTunes receipt emails (sometimes arrive days after the purchase).

Yes, and how come every other e-commerce vendor can send a receipt or order notice minutes after ordering and it takes the mighty Apple days to send an invoice for an online download?

At least if my kid ordered something and I got an email right away, I could stop them from ordering anything else. Your idea of having two passwords, one for the phone and another for ordering, is a good one or there could be a "kids mode" which requires a different password to get out of. In "kids mode", there would be no credit card ordering permitted at all.
post #24 of 127
Quote:
Originally Posted by malnar View Post

Did you actually read the article? It's not about giving kids a password, it's about the previous iTunes/App Store set up that allowed further purchases within a fifteen minute time frame, including in-app purchases. Kids don't need a password for that. Have dad download the game, start playing, and stumble on an in-app purchase - and then there's nothing blocking the kid from just going ahead with the purchase. I doubt the kids even realized it cost anything. Now you can't do that, it forces you to input your password again.

Apple should have seen this coming. In-app purchases were ripe for this kind of problem from the start. I won't say they were hoping to reap the rewards of accidental purchases, but surely they saw the problem early and could have updated iOS to stop this long ago. I do think, however, that these lawsuits are pretty frivolous - we're talking a couple hundred dollars and a problem that has been solved. There is no real reason to go ahead with this other than greed, IMO.

Dad could have logged out of the app store BEFORE giving the device to the kids. It's his fault he didn't treat his credit card with more respect. When you hand somebody a device that stores your credit card info, it's the same as handing over your credit card. Sorry he had to find out the hard way.
post #25 of 127
Open Settings
Tap General
Scroll down and tap Restrictions
Tap Enable Restrictions
It asks you for a 4 number passcode
From there you can set up all sorts of restrictions. Including enabling/disabling in-app purchases.

It's always been there. If parents are too lazy to look for this stuff then I have zero sympathy.
post #26 of 127
Most of us here agree that the parents should take the responsibility to not just give into their kids when they beg, cry, demand for passwords. And this suit should be thrown out.

I just hope the judge feels the same way.
post #27 of 127
Quote:
Originally Posted by revatman View Post

Open Settings
Tap General
Scroll down and tap Restrictions
Tap Enable Restrictions
It asks you for a 4 number passcode
From there you can set up all sorts of restrictions. Including enabling/disabling in-app purchases.

It's always been there. If parents are too lazy to look for this stuff then I have zero sympathy.

exactly.
post #28 of 127
It's ridiculous to say apple is at fault for this. The parental controls on this subject are well fleshed out.

I do think apple should consider allowing "children's" accounts which don't require a credit card but do require a "parent" account to be registered. This way the child has there own password, and can download free apps and updates, but can't spend money. People could gift these accounts money and parents could even receive the receipts for their children's accounts too, so they can still monitor usage.
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post #29 of 127
I hate people.
post #30 of 127
It's probable that the courts will rule in this guys favor, especially if it makes it up to circuit court, but it really is this guys own fault. And yes, I know being a parent is hard, but you can not tell your kids the password and you can simply tell them "no" when they keep asking you to download stuff.

Another option, and this one is 100% guaranteed to never get you into any financial trouble, is simply don't attach a credit card or debit card to your iTunes account. Just use iTunes gift cards. This is exactly what I do, and it saves me a lot of money because I am alot more judicious with my app purchases.
post #31 of 127
Quote:
Originally Posted by malnar View Post

Did you actually read the article? It's not about giving kids a password, it's about the previous iTunes/App Store set up that allowed further purchases within a fifteen minute time frame, including in-app purchases. Kids don't need a password for that. Have dad download the game, start playing, and stumble on an in-app purchase - and then there's nothing blocking the kid from just going ahead with the purchase. I doubt the kids even realized it cost anything. Now you can't do that, it forces you to input your password again.

Apple should have seen this coming. In-app purchases were ripe for this kind of problem from the start. I won't say they were hoping to reap the rewards of accidental purchases, but surely they saw the problem early and could have updated iOS to stop this long ago. I do think, however, that these lawsuits are pretty frivolous - we're talking a couple hundred dollars and a problem that has been solved. There is no real reason to go ahead with this other than greed, IMO.

Before accusing others of not reading an article, perhaps you should read it better first. It quite clearly says in the article, quoting the lawsuit itself

Quote:
"Because the passwords now required for purchases of Game Currency are the same passwords required for any Apple purchase, minors aware of such password may purchase Game Currency without authorization from their parents for that purchase," the lawsuit reads.

It's the parent's decision to give their minors a password tied to their credit card.
post #32 of 127
Quote:
Originally Posted by zoetmb View Post

Yes, and how come every other e-commerce vendor can send a receipt or order notice minutes after ordering and it takes the mighty Apple days to send an invoice for an online download?

At least if my kid ordered something and I got an email right away, I could stop them from ordering anything else. Your idea of having two passwords, one for the phone and another for ordering, is a good one or there could be a "kids mode" which requires a different password to get out of. In "kids mode", there would be no credit card ordering permitted at all.

I believe they try to group purchases together to minimize credit card transaction fees. If you buy 3 games and rent 2 movies over a 2 day span, they want to process that as a single transaction instead of 5. The credit card fee for a single 99 cent transaction is more than the percentage they keep of a given sale. Other vendors such as amazon already group your items together as a single sale.
post #33 of 127
Quote:
Originally Posted by revatman View Post

Open Settings
Tap General
Scroll down and tap Restrictions
Tap Enable Restrictions
It asks you for a 4 number passcode
From there you can set up all sorts of restrictions. Including enabling/disabling in-app purchases.

It's always been there. If parents are too lazy to look for this stuff then I have zero sympathy.

I'm a parent. I never thought to even look, so thanks for the heads up. But as a parent I do have sympathy. I used not to but after a short while of parenthood I stopped blaming parents. The reality of parenthood is much different from the inside than the outside. My guess is that most parents, even tech savvy ones, would say, "The password is 'xyz'. Now get out of my hair", followed by "Only free apps, OK?", never even thinking there might be anything like in-app purchases. Not saying it warrants a class action lawsuit but all you people coming down hard on parents - do you have kids?
post #34 of 127
Is the Federal Trade Commision going to be investigating Facebook and Zynga next? There is really no difference with in "app" purchases. You can play the games for free, but if you want certain benefits or extras you pay with micro transactions. This is even spilling over into MMOs now with Lord Of The Rings: Online opting for micro transitions and even Blizzard to a certain extent with pets/mounts able to be purchased for World of Warcraft. Three are a lot of MMOs aimed a children as well that rely solely on micro transactions. In the end parents need to be more aware of what their children are playing and restrict access to anything they do not want their child to play.
post #35 of 127
Quote:
Originally Posted by paxman View Post

I'm a parent. I never thought to even look, so thanks for the heads up. But as a parent I do have sympathy. I used not to but after a short while of parenthood I stopped blaming parents. The reality of parenthood is much different from the inside than the outside. My guess is that most parents, even tech savvy ones, would say, "The password is 'xyz'. Now get out of hair", followed by "Only free apps, OK?", never even thinking there might be anything like in-app purchases. Not saying it warrants a class action lawsuit but all you people coming down hard on parents - do you have kids?

I did have a suggestion how Apple could deal with these types of apps further up the thread. Here again I summarize:

Those games should not be included in the free games section. Apple could easily make a definition of a 'free' game or app that stated it may contain ads but no in app sales. Even an upgrade from a light to a full version should not be from within a 'free app' rather an ad would state it has to be 'purchased from the non-free section.

i.e. stop classifying them as 'free'

That said parents need to be vigilant.
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post #36 of 127
.... parents gonna parent.... oh wait.... this is amerika, there must be someone else I can blame, er sue, right?
post #37 of 127
Quote:
Originally Posted by HammerofTruth View Post

This what happens when parents don't investigate a devices features before giving to their kids to "babysit" them. These are the same parents who buy mature rated games because their kids told them to get it.

Quoting a phrase from the movie Airplane (1) : "I say, let them crash"
post #38 of 127
Quote:
Originally Posted by digitalclips View Post

I did have a suggestion how Apple could deal with these types of apps further up the thread. Here again I summarize:

Those games should not be included in the free games section. Apple could easily make a definition of a 'free' game or app that stated it may contain ads but no in app sales. Even an upgrade from a light to a full version should not be from within a 'free app' rather an ad would state it has to be 'purchased from the non-free section.

i.e. stop classifying them as 'free'

That said parents need to be vigilant.

No doubt, parents need be vigilant. I always warn friends who get their kids iPods that they need to 'manage' it because its not really an iPod, its a computer. That said, when the receipts of in app purchases are emailed (are they emailed like normal purchases? I don't even know), they could have a line about secondary password or available parental controls.
post #39 of 127
Quote:
Originally Posted by Black107 View Post

I hate people.

"A person is smart. People are stupid."
post #40 of 127
Quote:
Originally Posted by swtchdtomak View Post

iTunes already has an "allowance" system built in for the kiddies. There is absolutely no reason to provide kids with a password that accesses the Credit Card.

The system is not perfect and there is a very compelling reason - money. I have an iTunes account. My wife and I have iPhones. My kids have ipod touches. We have an iPad. Because of the way Apple lets you share apps we all use the same account (If I buy a game, everybody else in my family can download it for free. If we separate the accounts everybody has to pay individually). What would make it perfect would be if apple allowed members of a family account to download free, or more importantly, previously bought apps using their own sub account.
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