Apple Refunds Payments Made by Children

AppleParents can be more at ease about their children playing with their iPhones as Apple makes refunds for in-app payments made without parental permission. To prevent the payments in the future, the tech giant is also going to make some changes to make it harder for children to make purchases. The Federal Trade Commission (FTC) announced this on Wednesday after talking to Apple.

The FTC announced that Apple knew about this problem as far back March 2011. This was before the class-action lawsuit that was filed last year, but had failed to make sufficient changes to prevent the unauthorized in-app payments. The tech company is now on a March 31 deadline to make the changes and notify all customers of any refunds due.

People who made purchases in the App Store had a 15 minute window to make other purchases without entering a password again. This made it easier for customers, but meant that children could buy various items from the App Store 15 minutes after their parents downloaded an app. The children could also make purchases within the app, even those that were initially free to download.

Apple made one change in 2011 so that users would need to re-enter passwords after downloading an app. However, once that password was re-entered, the 15-minute allowance was available.

The iPhone creators’ argument is that parents have the ability to block the purchases within apps by changing the settings within the phone. The FTC argued that this was not enough, which is why Apple is now refunding payments made by children. The FTC ruled that the tech giant needs to be more open about the 15-minute window and give people the chance to agree to it and withdraw that approval if they need to.

The company will pay back at least $32.5 million for the in-app purchases. It is not hard to see how that amount has grown so large when looking at some of the parents who have been affected. One eight-year-old girl created a $1,400 bill during a school winter break playing on one app. It was never clear to the eight-year-old that she was spending real money, so would never have considered asking her parents for permission. The girl was playing on Smurf’s Village, where items can cost as much as $500.

The negotiations between the tech giant and the commission have been ongoing for “several months,” according to an email sent from Tim Cook, Apple CEO, to employees at the firm. However, the email also made it clear that Cook was surprised that dealing with the commission was necessary due to the parental controls. He was also angry that the negotiations came after an attempt at refunding customers, stating that it seemed like double jeopardy.

Apple had already tried to refund customers last year. After an initial complaint, the company sent emails to 28 million App Store customers to inform them of the purchases. Some emails bounced, so the company mailed the customers instead. Approximately 37,000 complaints were received afterwards and Apple refunded all payments made by children.

By Alexandria Ingham

The Washington Post

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