The Federal Trade Commission is requiring Apple to refund a minimum settlement amount of $32.5 million to the tens of thousands of people who complained of unauthorized charges placed by their children while they played a game downloaded from the App store, according to the Associated Press.
One of the unsuspecting parents to complain was Jackie Nussbaum whose son racked up $600 in charges in one day while playing DragonVale, a colorful game where kids raise dragons, the AP reported. Nussbaum's son, who was 10-years-old at the time, wasn't aware the gems he was buying to build his imaginary world were actually costing his mom money.
"It was shocking.I thought it was a mistake, that someone had stolen my credit card," said the mother of two from Westerville, Ohio, according to the AP. "I almost choked."
The FTC said Apple was not making it clear enough when users are being charged for in app purchases, like the buying of gems, coins or treats for the games, the AP reported.
The FTC also stated that a 15 minute window after a parent, or user, inputs their Apple I.D. and password is left open for any purchases to be made without authorization, according to the AP.
"You cannot charge consumers for purchases they did not authorize," Commission Chairwoman on the case Edith Ramirez said, the AP reported.
Nussbaum was refunded the $600 because she immediately called Apple and explained what had happened, and Apple even helped her set up password protections for in-app purchases, according to the AP.
Another parent who contacted the FTC wasn't so lucky after her daughter spent $2,600 in the Tap Pet Hotel app buying supplies to build and run her imaginary dog hotel, the AP reported.
As part of the settlement FTC is also requiring that Apple update their billing practices so that these cases can be prevented in the future, a step Apple CEO Tim Cook said was already underway due to similar cases which were brought forward last year, according to the AP.
Cook said the FTC's decision "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," the AP reported.
Last year, Apple users spent more than $10 million in the app store alone, making it a much wanted platform for software developers and for Apple, who charges 30 percent of each transaction placed in the App store, according to the AP.
Almost 44 percent of last years revenue in the app store was due to the purchase made in children applications while in the app or while playing the game, the AP reported. The rest of the revenue came from upfront fees which are authorized upon download.
The FTC settlement states the $32.5 million is a minimum amount Apple will have to refund. If the total amount of these unauthorized purchases rises, so will the settlement amount, if it doesn't the difference will be paid to the FTC, the AP reported.
