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Apple settles lawsuit over in-app purchasing by kids with $5 iTunes credits

post #1 of 38
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Apple on Monday agreed to settle a lawsuit leveled by a group of parents who sued the company after their children spent large amounts of money on in-app purchases, with the company planning to dole out $5 iTunes gift cards, the same amount in cash, or a full refund if the initial charge was over $30.

The settlement brings an end to the suit originally filed in April 2011, which alleged Apple's process of in-app purchasing was too easy for children to accrue fees on their parents' credit cards.

Tap Fish
Tap Fish HD is an example of a "freemium" app with in-app purchasing.


Plaintiffs in the case claimed their kids were buying game currencies without realizing they were spending hundreds of dollars in real-world money. As noted by GigaOm, plaintiffs will receive a $5 iTunes gift card or cash equivalent for most claims, while those exceeding $30 can file fora full refund.

Children were unwittingly charging $99 to more than $300 worth of in-game content to the credit cards associated with their parents' iTunes accounts, the suit said.

At the heart of the issue are so-called "bait apps," otherwise known as "freemium" apps, that can be downloaded at no cost but provide for in-app upgrades sometimes priced at over $100. Apple was dragged into the battle for its implementation of iTunes account passwords, which allowed for a certain amount of time to pass before a user was prompted for a password. The password window was adjusted in iOS 4.3.

For its part, Apple noted that parents have the ability to stop their children from purchasing the digital wares, though the argument apparently fell on deaf ears.

After a preliminary assessment of the settlement is approved by a federal judge and all claims are filed, Apple will likely start meting out payments as early as the end of 2013.

post #2 of 38

I've been playing one of those freemium games lately, Clash of Clans. It's really well made, and the graphics look great too. I also noticed that it's the top grosser on the charts, there must be a ton of people playing that.

 

I've never really played any of those freemium apps before, but to be honest, I find it more challenging when you don't spend any money on gems. It seems like cheating to me. I find that it's more satisfying to build yourself up strong with knowing that you didn't cheat at all. Games should be about tactics and skill, not about who is the biggest dumbass and spends most money on sacks of gems.

 

I'm not really a fan of the freemium model at all, and I'd rather pay full price for a game from the start. I can see why some developers do it though, and if I were a developer, I'd probably do it too. The fact that some people (dumbasses in my humble opinion) are going to go and buy gems for $99 or more is probably too tempting to resist.


Edited by Apple ][ - 2/25/13 at 4:22pm
post #3 of 38

This lawsuit is despicable. Parents that take no personal responsibility for their actions. In-app purchases require the account password each time. If you give an iOS device to a kid, who you know has no concept of money, and freely supply them with your iTunes password which is connected to your credit card, then you deserve the charges that come to you. 

post #4 of 38

People will never take responsibility as long as they can shift it onto someone else.

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post #5 of 38
Quote:
Originally Posted by Slurpy View Post

This lawsuit is despicable. Parents that take no personal responsibility for their actions. In-app purchases require the account password each time. If you give an iOS device to a kid, who you know has no concept of money, and freely supply them with your iTunes password which is connected to your credit card, then you deserve the charges that come to you. 

It's not that simple..

The lawsuit was generated because the system maintains your iTunes password for some time before it asks you to re-enter it. I believe it was around 15 minutes. So if the parent enters the password to download a game and then gives it to the kid, the kid can buy things without entering the password again.

While I agree that parents need to be responsible for their kids and teach the kids to be responsible, I can understand the unhappiness in this situation - especially since there was no way for the parents to know that the password was still active.
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post #6 of 38
It's bad parenting.
post #7 of 38
Apple’s terms and conditions don't allow for children under 13 to have an Apple ID. Also, these parents should be using the allowance feature of iTunes to prevent children from directly accessing funds from a credit card. These parents sound about as unaware about the real world as their children making in-app purchases.
post #8 of 38
Apple, it's your fault. I don't have time to watch over my kids and to make sure they aren't spending my money. I thought the magic of iDevices is to babysit them.

/s
post #9 of 38
Quote:
Originally Posted by jragosta View Post

While I agree that parents need to be responsible for their kids and teach the kids to be responsible, I can understand the unhappiness in this situation - especially since there was no way for the parents to know that the password was still active.

 

Exactly.  The parents could buy an app for their child (isn't this what all the fans claim iPads are good for?), and then hand it to them, never suspecting that Apple had left the purchasing door wide open.  Who would? 

 

Then the developers took advantage by making it sound like happy-happy play money purchases to the kids, similar to many games where it is fake money.

 

Heck, it didn't even have to involve parents and children.  Anyone of any age could loan their device to a friend who wanted to play a role or other game with in-app-purchases, and end up with a huge unexpected bill.

 

Apple changed the way it works, because it was poorly thought out.


Edited by KDarling - 2/25/13 at 7:24pm
post #10 of 38
Quote:
Originally Posted by WontonParmesan View Post

It's bad parenting.

 

but Apple's fault.

Because they're full of settlement money.

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post #11 of 38
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Originally Posted by Suddenly Newton View Post

but Apple's fault.
Because they're full of settlement money.
Hehe
post #12 of 38

I really hope the lawyer who cobbled together this case gets a $30 gift card.

He/she deserves it.

post #13 of 38
Quote:
Originally Posted by KDarling View Post

 

Apple changed the way it works, because it was poorly thought out.

 

No, Apple changed it to protect themselves because of stupid people filing lawsuits. Someone already mentioned the allowance feature. There's also this thing called "iTunes Gift Cards" which a lot of parents I know use to control kids spending.

 

And I don't buy the "I didn't know my password still worked for xx minutes after I installed an App". I'd love to see the charges made by people including the time & date to see just how much was charged in the minutes following an App purchase. In fact, that should have been part of the settlement - if your child racked up charges in the 15 minutes after an App install then you get your refund. If they racked it up over several days then you're SOL.

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post #14 of 38
Quote:
Originally Posted by jragosta View Post

It's not that simple..

The lawsuit was generated because the system maintains your iTunes password for some time before it asks you to re-enter it. I believe it was around 15 minutes.

That's the default, which can be set to Immediately.



To avoid this:
Quote:
So if the parent enters the password to download a game and then gives it to the kid, the kid can buy things without entering the password again.

Before handing over my iPhone to a kid I always set restrictions to, well, disallow basically anything, but they can play games rated for four year olds. Because it's quite a hassle to restore a Calendar entry if the kid deletes one. Besides, how would you know? I certainly don't check all my Calendar / Contacts entries when I get my phone back.
Quote:
While I agree that parents need to be responsible for their kids and teach the kids to be responsible, I can understand the unhappiness in this situation - especially since there was no way for the parents to know that the password was still active.

RTFM. Even without knowing the inner workings or all settings from memory, anyone knows that it's a computer, has all your info in it, and you will 'dislike' it if 'some data was missing'. This is common sense. no?
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post #15 of 38
Quote:
Originally Posted by PhilBoogie View Post

That's the default, which can be set to Immediately.



To avoid this:
Before handing over my iPhone to a kid I always set restrictions to, well, disallow basically anything, but they can play games rated for four year olds. Because it's quite a hassle to restore a Calendar entry if the kid deletes one. Besides, how would you know? I certainly don't check all my Calendar / Contacts entries when I get my phone back.
RTFM. Even without knowing the inner workings or all settings from memory, anyone knows that it's a computer, has all your info in it, and you will 'dislike' it if 'some data was missing'. This is common sense. no?

No, common sense would be for the default "require password" setting should be 'immediately'.

There are tens of millions of people out there who don't understand how this works. The system should default to 'secure'. If you want to change it, that's your choice, but it should not ship with a setting that allows kids to spend money without the parent's knowledge.
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post #16 of 38
Hmm, I think you are right jragosta. I was writing my own view, which clearly isn't your average / common one. Thanks
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post #17 of 38
Quote:
Originally Posted by Slurpy This lawsuit is despicable. Parents that take no personal responsibility for their actions. In-app purchases require the account password each time. If you give an iOS device to a kid, who you know has no concept of money, and freely supply them with your iTunes password which is connected to your credit card, then you deserve the charges that come to you.

The problem isn't bad parenting, it was Apple for having on by default In App purchases.
No password required to buy these. You have to go to settings, click on General, Then turn Restrictions ON, then turn off In App purchases. This by default should be turned OFF and require a password to buy In APP purchases.
post #18 of 38

Why should it default to secure? This is a PERSONAL device. Not a multi-user. If you want to let your child use it, why you certainly can! But YOU need to be responsible for your phone, just as if you were letting a nosey friend use it for a minute. If you're not capable of thinking there MIGHT be a setting like that to restrict access, then you shouldn't be letting people use your phone, especially when you know they could potentially buy something with it. I can't believe this lawsuit didn't get dismissed.

post #19 of 38

Hypersensitivity from the Apple defenderati as usual


 
Quote:
RTFM. Even without knowing the inner workings or all settings from memory, anyone knows that it's a computer, has all your info in it, and you will 'dislike' it if 'some data was missing'. This is common sense. no?

 

Does anyone know it's a computer?  Where is the word "computer" at http://www.apple.com/iphone/?

 

It's a phone, a consumer device.  And this kind of ability to rack up mega charges on a game for kids is a pretty new thing.  It isn't common sense, because there was no real precedent on the Gameboys or Playstations that parents bought their kids.  And convenient purchasing combined with predatory IAP pricing (I won't hear $100 worth of smurf-berries called anything less than predatory) has created a situation that clashes with common consumer use cases in ways that harshly impact on the consumer.  Apple as the enabler and gatekeeper is responsible for that situation and needs to make amends.  Personally I'd also like them to take a harder line with game developers who use the freemium model and crazy IAP prices to exploit their customers (often kids).

 

Nothing to see here.

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post #20 of 38
Quote:
Originally Posted by hface119 View Post

Why should it default to secure? This is a PERSONAL device. Not a multi-user. If you want to let your child use it, why you certainly can! But YOU need to be responsible for your phone, just as if you were letting a nosey friend use it for a minute. If you're not capable of thinking there MIGHT be a setting like that to restrict access, then you shouldn't be letting people use your phone, especially when you know they could potentially buy something with it. I can't believe this lawsuit didn't get dismissed.

If Apple don't intend people to let their kids use their iPhone then they should ban all games and educational content for the kids from the iOS store, no?

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post #21 of 38
Quote:
Originally Posted by CincyBigDog View Post

Quote:
Originally Posted by Slurpy This lawsuit is despicable. Parents that take no personal responsibility for their actions. In-app purchases require the account password each time. If you give an iOS device to a kid, who you know has no concept of money, and freely supply them with your iTunes password which is connected to your credit card, then you deserve the charges that come to you.

The problem isn't bad parenting, it was Apple for having on by default In App purchases.
No password required to buy these. You have to go to settings, click on General, Then turn Restrictions ON, then turn off In App purchases. This by default should be turned OFF and require a password to buy In APP purchases.

I never knew about the "require password immediately" option and I never got burned by my kids. That's a separate issue. To me the real issue is controlling spending of your kids through the allowance feature or gift cards.

I never let my kids use my actual phone as I don't want them (as PhilBoogie said) to wreck other things on my phone. I gave my kids my old iPhones when we got new ones. Same reason my PC has multiple accounts and the kids don't have access to mine.

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post #22 of 38

I have used iPhones etc since launch. I had never heard of this require password immediately feature.

 

 

"But the plans were on display ..."

"On display? I eventually had to go down to the cellar to find them."

"That's the display department."

"With a flashlight."

"Ah, well the lights had probably gone."

"So had the stairs."

"But look, you found the notice didn't you?"

"Yes," said Arthur, "yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying 'Beware of the Leopard'."

 

post #23 of 38
Quote:
Originally Posted by Mystigo View Post

I have used iPhones etc since launch. I had never heard of this require password immediately feature.

 

 

"But the plans were on display ..."

"On display? I eventually had to go down to the cellar to find them."

"That's the display department."

"With a flashlight."

"Ah, well the lights had probably gone."

"So had the stairs."

"But look, you found the notice didn't you?"

"Yes," said Arthur, "yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying 'Beware of the Leopard'."

 

 

Ignorance is not an excuse

post #24 of 38

It is the fault of the app creators for their predatory tactics and pricing, Apple's for originally not having a better barrier to purchasing or not having more security on purchasing set by default, and the parent's for not doing their due diligence to monitor their children's activities and/or understanding the setting on their own phones.

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post #25 of 38
Quote:
Originally Posted by Crowley View Post

If Apple don't intend people to let their kids use their iPhone then they should ban all games and educational content for the kids from the iOS store, no?


I just disable in app purchasing.

post #26 of 38
Originally Posted by Crowley View Post
If Apple don't intend people to let their kids use their iPhone then they should ban all games and educational content for the kids from the iOS store, no?

 

This is a nonsense argument. It's wholly unrelated to the topic at hand.

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post #27 of 38
Quote:
Originally Posted by pt123 View Post


I just disable in app purchasing.

Yes, you can do that - if you know it's an option.

The whole point of iOS is that you don't have to read a manual - you can just take the device out of the box and start using it. With that kind of strategy, the default should be 'safe' options.
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post #28 of 38
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Originally Posted by joelsalt View Post

 

Ignorance is not an excuse

 

Spoken like a true Vogon.

post #29 of 38
Obviously, everybody making these comments is not a parent. Kids have limited understanding of money and these games make it extremely easy to spend HUNDREDS of dollars with a simple touch.

My 5 year old son plays dragonvale, a couple months ago my wife discovered over $300 in charges in one day to our itunes account, he thought he was just buying "gems" with his "gold" from the game. Of course his understanding was that if he can buy dragon eggs for $500 in "gold" from the game that the same gold can be used for a gem pack costing $99 in real money.

We called apple and got our money refunded, it was pretty easy actually. However, a similar situation happened to my cousin about a year ago and apple refused to refund the purchase of $700 by his 6 year old. After a few days and several calls they eventually got a partial refund.

I would assume that no adult would ever spend hundreds of dollars on these games. This means that these items are directed at children. Seems like a sleezy thing to do.
post #30 of 38
Originally Posted by Mystigo View Post
Spoken like a true Vogon.

 

Are you just jokingly continuing the line of metaphor or do you believe you're right?

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post #31 of 38
Quote:
Originally Posted by Tallest Skil View Post

This is a nonsense argument. It's wholly unrelated to the topic at hand.
Obviously. But if people are seriously going to suggest that parents sharing their iOS devices with their kids is a use case that Apple hasn't considered then we're pretty far down the road to nonsense-land.

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post #32 of 38
Originally Posted by Crowley View Post
Obviously. But if people are seriously going to suggest that parents sharing their iOS devices with their kids is a use case that Apple hasn't considered then we're pretty far down the road to nonsense-land.

 

What Apple didn't consider is being sued over a lack of personal responsibility. 

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post #33 of 38
Quote:
Originally Posted by Tallest Skil View Post

 

What Apple didn't consider is being sued over a lack of personal responsibility. 

But they should have. They're making money from those in-app purchases as surely as the developer is aren't they?

 

If McD's is responsible for letting consumers know coffee is hot. . .


Edited by Gatorguy - 3/4/13 at 9:01am
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post #34 of 38
Originally Posted by Gatorguy View Post
But they should have.

 

Why would they spend time on a situation over which they have no responsibility?

 

I'm just trying to come at this from a common sense point of view. If a kid and his parent go to Wal-Mart and the parent lets the kid pick out everything and is only there for checkout verification, why is the parent allowed to sue Wal-Mart because the kid spent too much?

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post #35 of 38
Quote:
Originally Posted by Tallest Skil View Post

 

Why would they spend time on a situation over which they have no responsibility?

Of course they have some responsibility. They accepted it when they made the store rules and accepted the profit from it. Even if Apple was only 10% responsible they could potentially be liable for 80-90% or more of any damages if it went to trial.


Edited by Gatorguy - 3/4/13 at 9:11am
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post #36 of 38
Quote:
Originally Posted by Tallest Skil View Post

 

Why would they spend time on a situation over which they have no responsibility?

 

I'm just trying to come at this from a common sense point of view. If a kid and his parent go to Wal-Mart and the parent lets the kid pick out everything and is only there for checkout verification, why is the parent allowed to sue Wal-Mart because the kid spent too much?

...even if Walmart didn't need the credit card presented again as long as only a few minutes had passed and the cashier recognized him from before?

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post #37 of 38
Quote:
Originally Posted by Tallest Skil View Post

Why would they spend time on a situation over which they have no responsibility?

 

I'm just trying to come at this from a common sense point of view. If a kid and his parent go to Wal-Mart and the parent lets the kid pick out everything and is only there for checkout verification, why is the parent allowed to sue Wal-Mart because the kid spent too much?

 

Because the parent didn't expect Walmart to keep selling stuff to their kid, after the parent had already gotten their receipt and left.

 

It would be quite a different scenario if the App Store had put up an alert such as "Warning!  Your account will stay open for purchases for the next quarter hour unless you click this button to stop it."

 

It doesn't matter if it was a kid, or your college buddy buying game credits... the owner simply had no indication or reason to suspect that the account was still open for purchases. 

post #38 of 38
According to CNET parents due compensation are now getting instructions on how to apply.

http://news.cnet.com/8301-13579_3-57590643-37/apple-notifies-parents-of-in-app-purchase-settlement-details/
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