Apple ordered to pay $32.5 million to parents in court settlement

Apple are known for offering “child friendly” apps. Games and other virtual goods designed for children can cost anything from $0.99 up to $99.99 in the app store. But what happens when a child uses their parents phone without permission, buys these games, and racks up massive charges? According to a recent court ruling, they have to refund the customer.

Apple has just reached a settlement with the US Federal Trade Commission (FTC), which means it will have to refund at least $32.5 million. This follows a string of complaints that found children were spending vast sums of money using iPhones or iPads without their parents consent.

For example, one consumer put in a complaint that her daughter had spent a massive $2,600 whilst playing the popular game, “Tap Pet Hotel”. Other complained of similar problems. Apps like Dragon Story and Tiny Zoo friends have seen parents being left with bills of up to $500 in some cases. Apple had already begun to refund these customers before the settlement, and has previously sent out emails to 28 million customers after receiving thousands of complaints.

In an internal memo, Apple CEO Tim Cook said the issue is caused by the fact that children were able to make purchases within apps as long as the parent had entered their password in the last 15 minutes. The ruling has ordered Apple to be clearer when it comes to informing customers about the 15 minute window. Also, the App Store billing system needs to be improved so that customers are made aware every time they are about to be charged for an in-app purchase.

Tim Cook said: “The 15-minute window had been there since the launch of the App Store in 2008 and was aimed at making the App Store easy to use, but some younger customers discovered that it also allowed them to make in-app purchases without a parent’s approval.” He added that the parental controls in the iOS operating system are strong overall. “From the very beginning, protecting children has been a top priority for the App Store team and everyone at Apple”, he said.

FTC Chairwoman Edith Ramirez commented: “This settlement is a victory for consumers harmed by Apple’s unfair billing, and a signal to the business community: whether you’re doing business in the mobile arena or the mall down the street, fundamental consumer protections apply. You cannot charge consumers for purchases they did not authorize.”