Apple's settlement over in-app purchasing inches closer to approval, may include 23M refunds

Posted:
in General Discussion edited January 2014
Apple's proposed settlement over in-app purchases made by unwitting children was discussed in a court hearing on Friday, with counsel for both parties hammering out how the Cupertino company will mete out refunds.

In the settlement, which could see claims from over 23 million iTunes users, Apple is offering plaintiffs $5 iTunes credits, the same amount in cash, or full refunds for claims over $30. News of Apple's settlement was first reported on Monday.

Tap Fish
Tap Fish HD has been used as an example of Apple's previously lax protocols on in-app purchasing.


According to in-court reports from CNET, Apple will send out more than 23 million notices to iTunes users who were possibly affected by the company's in-app purchasing process, which allegedly made it too easy for minors to accrue fees on their parents' credit cards. The actual number of payouts will likely be much smaller, Apple's counsel said, as users need to meet certain requirements in order to file successful claims.

As stipulated in the settlement language, purchases need to have been made by a minor without the consent of their guardian and only apply to certain apps. To this end, claimants must also fill out a form stating which apps were used to make the charges.

With the various stiuplations, U.S. District Court Judge Edward Davila voiced concern over the level of responsibility placed upon affected consumers, which includes sifting through past purchases to find the offending apps.

"It seems like you're asking the plaintiffs to do a lot," Judge Davila said. "Apple has this information," he continued. "They're in the best position to retrieve this information."

Apple's attorney pointed out that users are able to view their entire iTunes purchase history online, and noted that a special tool will be embedded on the settlement's website that can aid in seeking out relevant apps.

Plaintiffs filed suit in April of 2011, claiming their children were buying hundreds of dollars worth of in-game items without realizing the attachment to real-world money.

At issue are "freemium" apps that can be downloaded at no cost but allow users to purchase upgrades and in-game currency sometimes priced at over $100. Apple was dragged into the suit over its past protocols regarding iTunes account passwords, which allowed for a certain amount of time to pass before a user was prompted to re-enter their code. The window was large enough, plaintiffs said, for children to make purchases without parental approval. Apple modified the password window in iOS 4.3.

As for Apple's settlement, a federal judge is expected to rule on its approval next week.
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Comments

  • Reply 1 of 123
    robmrobm Posts: 1,068member


    Yea - dump the freemium apps completely. They really are annoying.


    Always wondered how they were able to be there in the first place. Met all the criteria I suppose ...


    Lesson learned - move on.

  • Reply 2 of 123
    asciiascii Posts: 5,941member
    Developers who put things costing $100 in a kid's app should be ashamed of themselves.
  • Reply 3 of 123
    dasanman69dasanman69 Posts: 12,979member
    robm wrote: »
    Yea - dump the freemium apps completely. They really are annoying.
    Always wondered how they were able to be there in the first place. Met all the criteria I suppose ...
    Lesson learned - move on.

    Because Apple gets 30% that's why.
  • Reply 4 of 123
    asdasdasdasd Posts: 5,282member


    Apple can charge the refund back to the developer. 

  • Reply 5 of 123
    nchianchia Posts: 122member
    There still needs to be parental supervision and responsibility at some point. Would most parents let their kids run amok with their credit cards?

    Apple should make in-app purchases harder by default, with the option to set monetary limits however.
  • Reply 6 of 123
    droiddroid Posts: 38member

    Quote:

    Originally Posted by broadbean View Post



    There still needs to be parental supervision and responsibility at some point. Would most parents let their kids run amok with their credit cards?



    Apple should make in-app purchases harder by default, with the option to set monetary limits however.


    Most parents don't give the credit card PIN to their children, before iOS 4.3 that was what access to an iOS device was.


     


    Monetary limits are pointless, these parents haven't understood parental controls sufficiently well enough to prevent their kids from making purchases on their accounts. Additional settings would also need explaining & setting up correctly.


    Apple could allow users to lock payments on the entire iTunes account, but that would be adding a barrier to their 30%.


     


    How about actually disabling in app purchases by default. It would also help if iOS supported multiple users, so a kids account could be locked to 3 apps & no browser/ internet or settings.app, without crippling the features that adults or responsible teens require, weirdly Apple seem to think buying multiple devices is the answer to that problem.

  • Reply 7 of 123
    apple ][apple ][ Posts: 8,568member


    If the issue has been fixed since iOS 4.3, then I sure hope that they don't pay out a single penny to any dumb and irresponsible parent since the arrival of iOS 4.3.


     


    Some parents just need to take better care of their kids. Parents are responsible for whatever their children do in the real world, and they should also be responsible for whatever their children do in the virtual world also. Ignorance should not be a valid defense.


     


    I'm not a developer, but if I were, I would definitely be targeting gullible kids. I'd make some sort of freemium app with all these cute, colorful characters in it and silly music, and I would make the game easy at first to lock the kids in and get them hooked, but after that, it would get much harder, and gems would be required to complete most tasks. The kids would either have to give up on playing the game as it becomes too frustrating or they would have to harass their parents and try to talk them into buying a few gems.


     


    The bottom line is that any good parent should be following what their kids are up to online. 

  • Reply 8 of 123
    robmrobm Posts: 1,068member

    Quote:

    Originally Posted by dasanman69 View Post





    Because Apple gets 30% that's why.


    lol - yea there is that I suppose. But I don't think Apple are that cynical to think that these apps are a smart way to make money.


    Drop them from the store or use more stringent criteria policing these apps so the devs can't get themselves in to trouble. Or just make a unilateral policy.

  • Reply 9 of 123
    palegolaspalegolas Posts: 1,276member
    Ahem.. Password? Just saying...
  • Reply 10 of 123
    philboogiephilboogie Posts: 7,438member
    broadbean wrote: »
    Apple should make in-app purchases harder by default, with the option to set monetary limits however.

    I agree. The default password requirement after a purchase is 15 minutes, but really should be put to 'immediately'. People who do not hand over their device to kid can change that default easily, should it bug them.
  • Reply 11 of 123
    jkichlinejkichline Posts: 1,332member


    I'm a parent, and I would be really upset if I received an iTunes bill for $2500... however, at what point will parents take responsibility for their own action or inaction and stop blaming someone else? You gave your kid a piece of technology with your credit card attached to it.  Maybe some parents don't understand how an iPod touch or iPhone works, but they need to research and learn before they hand their kids the keys to the kingdom.  How much will these parents research other things their kids do? (movies, video games, TV, relationships, etc).  It's kind of scary...

  • Reply 12 of 123
    leighrleighr Posts: 179member
    It's the developers, who deliberately make in-app purchases ambiguous, too easy and way over-priced, who should be paying the refunds. Apple may be guilty of not controlling the developers app capability better, but it the unscrupulous developers who have deliberately tried to trap children into making these horrendous purchases. They should kill their apps and move them over to Android, where there is no quality control.
  • Reply 13 of 123
    philipmphilipm Posts: 239member


    I find it obnoxious that something can be billed as “free” when it’s an engine for generating sales. Apple should require that this class of app be specifically labelled, and require entering an app store password to download. That way no one can be conned into installing something that their kids (or anyone else) can use to run up big real money expenditure. I’ve run into an iPad game called War Game that’s free and has its own internal game currency, but tries to sell you extras for real-world $$. Someone not paying close attention could spend real money unintentionally. In this case, not too obnoxious, because you don’t really need the extras, and it’s not targeting young kids. Even so, there’s a nasty feeling of sleight of hand to the whole thing.


     


    Apple blocks stuff that contains innocent phrasing that could have a porn connection, yet allows dishonest app marketing practices.


     


    Apple is up there with Exxon in market cap. They don’t need to match them on business ethics.

  • Reply 14 of 123
    techboytechboy Posts: 183member
    Once again, parents assume no fault for being stupid. Being game creators for putting in-game purchase in kids game...it's the new business model for mobile games...unless you like to go back to $40-$50 game per physical game disc.

    There are times I absolutely hate parents that are clearly dumb and blames someone else for their ignorance. Don't hand you 3-5 yrs old kids with a $500 device if you dont anticipate them to 1) break it 2) buy random things...educate yourself before giving your kids anything or don't have kids!
  • Reply 15 of 123
    jragostajragosta Posts: 10,473member
    droid wrote: »
    Most parents don't give the credit card PIN to their children, before iOS 4.3 that was what access to an iOS device was.

    palegolas wrote: »
    Ahem.. Password? Just saying...

    I really wish people would read the story before commenting. I know that's a lot to ask.

    The affected parents did not give their password or PIN to their kids. Rather, the problem was due to the fact that the password remains active for 15 minutes after you enter it. So if you download an app for your kids and then hand them the phone, it allows purchases without the kid having to enter the password for 15 minutes.

    There is a setting that allows you to eliminate that time delay and require the password to be re-entered immediately. That should have been set to 'immediate' by default. On a consumer device, it should almost always default to 'most secure' and allow the user to make it less secure if they wish.

    In this case, I think the parents have a good point.
  • Reply 16 of 123
    techboytechboy Posts: 183member

    Quote:

    Originally Posted by jragosta View Post







    I really wish people would read the story before commenting. I know that's a lot to ask.



    The affected parents did not give their password or PIN to their kids. Rather, the problem was due to the fact that the password remains active for 15 minutes after you enter it. So if you download an app for your kids and then hand them the phone, it allows purchases without the kid having to enter the password for 15 minutes.



    There is a setting that allows you to eliminate that time delay and require the password to be re-entered immediately. That should have been set to 'immediate' by default. On a consumer device, it should almost always default to 'most secure' and allow the user to make it less secure if they wish.



    In this case, I think the parents have a good point.


     


    "So if you download an app for your kids and then hand them the phone, it allows purchases without the kid having to enter the password for 15 minutes."


     


    You are defending "duh-duh-duh" moment for all of humanity...here's a simple questions then, whose fault is it to hand the iphone & ipad to their child after immediate downloads? There are seat-belts in cars and if you dont put them on don't blame the manufacturer.

  • Reply 17 of 123
    charlitunacharlituna Posts: 7,215member

    Quote:

    Originally Posted by philipm View Post


    I find it obnoxious that something can be billed as “free” when it’s an engine for generating sales. Apple should require that this class of app be specifically labelled, and require entering an app store password to download. That way no one can be conned into installing something that their kids (or anyone else) can use to run up big real money expenditure. .



     


    They list 'top in app purchases' on these apps which should be a red flag to parents that bother to look. Passwords are required, and you can use restrictions to turn off the grace period plus IAP all together. 


     


    And many of the games and apps are marked for older kids and adults and yet Mommy and Daddy are letting their toddlers etc at them. Like this recent kid in the UK. They didn't look at the game which was rated for older kids or watch this kid who had apparently never been allowed to play on the iPad too see what he was doing. They downloaded, sent him off to another room etc

  • Reply 18 of 123
    Clearly one of the most careless moves by Apple was to enable this feature without thinking about the deeper consequences. I'm not so sure but they introduced those in-app purchase disabling features a little later right? The thing is it's deep down into the privacy settings and restrictions and stuff that most parents don't even bother. That's where Apple's motives come into picture.
  • Reply 19 of 123
    tallest skiltallest skil Posts: 43,399member


    Originally Posted by jpadhiyar View Post

    That's where Apple's motives come into picture.


     


    No, that's where human laziness comes into the picture. Apple's subsequent actions prove your claim wrong.

  • Reply 20 of 123
    allenbfallenbf Posts: 993member

    Quote:

    Originally Posted by jragosta View Post







    I really wish people would read the story before commenting. I know that's a lot to ask.



    The affected parents did not give their password or PIN to their kids. Rather, the problem was due to the fact that the password remains active for 15 minutes after you enter it. So if you download an app for your kids and then hand them the phone, it allows purchases without the kid having to enter the password for 15 minutes.



    There is a setting that allows you to eliminate that time delay and require the password to be re-entered immediately. That should have been set to 'immediate' by default. On a consumer device, it should almost always default to 'most secure' and allow the user to make it less secure if they wish.



    In this case, I think the parents have a good point.


     


    Bingo. This happened to my family a few months back. My wife bought a few books for my 5 year old and handed the iPad back to her, a few days later we get an iTunes receipt for $250.  Kiddo clicked on an ad in a game and wound up purchasing another app.


     


    Apple refunded the money and we learned a lesson, but the default should be to the most secure option. Kids are kids. 

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