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

Posted:
in General Discussion edited December 2014
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.

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Comments

  • Reply 1 of 42
    apple ][apple ][ Posts: 8,583member


    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.

  • Reply 2 of 42
    slurpyslurpy Posts: 5,118member


    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. 

  • Reply 3 of 42


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

  • Reply 4 of 42
    jragostajragosta Posts: 10,473member
    slurpy wrote: »
    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.
  • Reply 5 of 42
    It's bad parenting.
  • Reply 6 of 42


    Good. It's called personal capitalism which trumps every way of living over that last 250 years.

  • Reply 7 of 42
    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.
  • Reply 8 of 42
    jungmarkjungmark Posts: 6,684member
    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
  • Reply 9 of 42
    kdarlingkdarling Posts: 1,640member

    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.

  • Reply 10 of 42

    Quote:

    Originally Posted by WontonParmesan View Post



    It's bad parenting.


     


    but Apple's fault.


    Because they're full of settlement money.

  • Reply 11 of 42
    but Apple's fault.
    Because they're full of settlement money.
    Hehe
  • Reply 12 of 42
    robmrobm Posts: 1,068member


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


    He/she deserves it.

  • Reply 13 of 42

    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.

  • Reply 14 of 42
    jragosta wrote: »
    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.

    1000

    To avoid this:
    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.
    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?
  • Reply 15 of 42
    jragostajragosta Posts: 10,473member
    philboogie wrote: »
    That's the default, which can be set to Immediately.

    1000

    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.
  • Reply 16 of 42
    Hmm, I think you are right jragosta. I was writing my own view, which clearly isn't your average / common one. Thanks
  • Reply 17 of 42
    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.
  • Reply 18 of 42


    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.

  • Reply 19 of 42
    crowleycrowley Posts: 5,799member


    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.

  • Reply 20 of 42
    crowleycrowley Posts: 5,799member

    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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