Apple to refund $32.5 mn for kids' app purchases

Jan 15, 2014
Students use tablet computers on September 12, 2013

Apple has agreed to refund at least $32.5 million to US customers for children's purchases from its online App Store without parental consent, US regulators said Wednesday.

The Federal Trade Commission said Apple also agreed to modify its practice—which until now had allowed children to make purchases on an iPhone or iPad 15 minutes after a password was entered.

FTC chairwoman Edith Ramirez said Apple failed to inform parents of the 15-minute window that could allow children to make purchases ranging from one dollar to $100 for each app.

Ramirez told reporters that because of the loophole, "children ran up millions of dollars in charges without their parents' knowledge and consent," a violation of federal rules.

Consumers "will be obtaining full redress" for any unauthorized charges, she added.

Ramirez said the FTC believes there are "many thousands of consumers which were impacted" and could get refunds.

She said the consent decree signed with Apple sets a minimum of $32.5 million, with no maximum. But if the refunded amount is less than $32.5 million, the balance will be paid to the regulatory agency.

Apple chief executive Tim Cook, in a letter to employees obtained and posted by the website 9to5mac, said the company has already been following the practices requested by the US regulators.

"The consent decree the FTC proposed 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," Cook was quoted as saying.

Cook's memo said Apple had "heard from some customers with children that it was too easy to make in-app purchases, so we moved quickly to make improvements."

He said the company sent emails to 28 million App Store customers offering refunds and that "when some emails bounced, we mailed the parents postcards."

"In all, we received 37,000 claims and we will be reimbursing each one as promised," Cook said in the memo.

Ramirez told reporters however that the FTC settlement "provides more robust relief" than Apple's voluntary actions.

She said under the agreement, Apple must notify parents of the 15-minute window that allows further app purchases after a password is entered.

Ramirez would not comment on any other investigations but said the agency "is obviously concerned" about other companies in the mobile space where children may be able to make purchases without parental consent.

Explore further: Feds crackdown on four bogus weight loss aids

add to favorites email to friend print save as pdf

Related Stories

Apple to hand out iTunes credits in settlement

Feb 26, 2013

Apple has agreed to give more than $100 million in iTunes store credits to settle a lawsuit alleging that the iPhone and iPad maker improperly charged kids for playing games on their mobile devices.

Apple moves to stop kids racking up iTunes bills

Mar 16, 2011

(AP) -- After customers complained that their kids were racking up hundreds of dollars worth of purchases inside iPhone and iPad games, Apple has changed how these purchases are authorized.

Feds crackdown on four bogus weight loss aids

Jan 07, 2014

Makers of a weight loss additive called Sensa will return more than $26 million to consumers to settle federal charges that the company used deceptive advertising claiming that consumers could lose weight by simply sprinkling ...

US regulators asked to probe game bills

Feb 09, 2011

Two members of Congress asked US regulators on Tuesday to look into a newspaper report that children had rung up huge bills buying virtual products in games on mobile devices.

Recommended for you

Turner channels removed from Dish amid pact spat

4 hours ago

Channels such as Cartoon Network and CNN are no longer part of Dish's programming lineup as a deadline has passed for the satellite TV provider and Turner Broadcasting to renew their distribution agreement.

Verizon reports higher 3Q net income, revenue

5 hours ago

Verizon Communications Inc. on Tuesday reported higher net income and revenue in its third quarter, helped by strong wireless subscriber growth and demand for its high-speed FiOS Internet services.

Amazon, Simon & Schuster sign book retail deal

13 hours ago

Amazon has reached a deal with American book publisher Simon & Schuster, the companies said, though the e-commerce giant remains at loggerheads with France's Hachette over e-book pricing.

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

kochevnik
not rated yet Jan 16, 2014
IPhones cause cancer. Read the legal in the small print. Cancers up 300% in adults exposed to typical cell phone EM radiations. For children with much thinner skulls the damage can be much higher