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back to article Apple coughs up 7 hours of profit to refund kids' $32.5m app spend spree

American parents whose children ran up huge bills from in-app purchases on Apple devices will be refunded $32.5m by the Cupertino titan. The settlement was brokered by the US Federal Trade Commission (FTC) after youngsters were able to buy heaps of useless stuff in software – such as power-ups in games – without their guardians …

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Joke

Ow...

... that slap on the wrist *really* hurt, you know...

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Re: Ow...

...and the punchline to your joke is?

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Anonymous Coward

Re: Ow...

Lazy parents want to blame someone else. Apple perhaps should have made the default to require the passcode every time but suspect many (again lazy) parents just give their passcode to their kids anyway.

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Re: Ow... @AC 09:24

No not Lazy parents, the argument of someone with no children. And I agree, every transaction should require authorisation unless you have turned authorisation off.

I have no idea how it works on Apple devices as I don't use them but authorise then wait around for 15 mins while you are trying to get chores done is not acceptable to me. After the chores it is time to play with Little Jonny a bit. Take him to toddler group for social interaction, pick up big brother from pre-school and then make them lunch. Next entertain them for another 3 hours (or try and get them to entertain themselves while you try and do more chores, this may include letting them play games, or are you too draconian and kids must go out in the freezing rain no matter what?) until it is time to pick bigger brother up from school. Get big brother changed for after school clubs and take him there. Get home make tea/dinner.

All the while this is going on and you have all this to do the children are constantly wanting you to play with them. Why is allowing them to play games on your device that you have purchased partly for entertainment wrong? Why should you need to stand over them watching them play Cutie Pie 3 constantly?

I will return to my argument I always use now. I assume your Mummy and Daddy watched you constantly, never did any work or chores and you were not allowed any further than arms reach until you were 16 never allowed to watch TV? No? Then stop blaming the parents when the software makers are putting these controls in to intentionally catch people when it is incredibly easy for them to code it out.

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Anonymous Coward

Re: Ow... @AC 09:24

Its called a Leapfrog Pad.... Or even some bygone... and Off-Line Console if you must. I agree If Parents are to lazy, or otherwise occupied / overstretched then you shouldn't use this as an excuse, when your Sprog puts you in the Poorhouse. And This "Outrage" should not have to impact me when I wish to enjoy more adult content. But hay ya won that One so pat your lazy parenting arses for that One!

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Anonymous Coward

Re: Ow... @AC 09:24

"You haven't got kids, obviously..."

I have. You are a lazy parent. End of.

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Re: Ow... @AC 09:24

Hehe I like all the AC Astro Turfers.

Please answer the question in my original post, I see no-one has tackled that. Perhaps your overbearing parents are still not letting you out of arms reach?

Also explain how I am a lazy parent? No-one has tried that yet either, you just say I am, without knowing me I add. If you think it is because I let my kids "shock horror" play games designed for kids on my devices. Guess what I do, and yes I vet them and no there is not a connection to the interwebs.

Luckily I have knowledge that most of these people do not to help with my decisions. Joe public does not necessarily understand that allowing X permission is tantamount to allowing the app to do XYZ. And it is those parents I was on about. So nice try at attacking me.

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Anonymous Coward

Re: Ow... @AC 09:24

Parents must take responsibility when letting their kids use their iPads etc. - there is a lot of iffy stuff accessible via search engines and YouTube and you always could turn it on so you had to authorise every transaction AFAIK it was just the default 'window' was 15 minutes.

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Re: Ow... @AC 09:24

Ahhh, Captain von Trapp! Always a pleasure to see you.

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Re: AFAIK it was just the default 'window' was 15 minutes

AFAYK.

But the real question is: Why didn't Apple, a company that prides itself on its "just works" devices and its dimwit friendliness (anyone doubting this need only recall those Apple commercials of the late 1990s that had people claiming they took PCs apart to install printers), why, as I say, didn't they set the default to the rather blindingly obvious ONE TRANSACTION? I mean, the whole point of authorization is that the tablet is in someone's hands other than those of the account holder. It serves only as an annoyance otherwise.

Either the configurationalists were too stupid to think through the consequences or they wanted exactly this sort of "mistake" to happen (and probably misjudged the backlash it would inevitably cause).

So, which do you think it was: Shit-thick or grubbing?

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Apple are pretty happy no doubt

Apple really do get to keep the status quo. They might have given back 34M, but they probably made a lot less from people who only lost a few $ and didn't realise it.

Paying a 34M "tax" on a billion dollar business is just hiss.

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Re: Ow... @AC 09:24

Yes, Lazy parents.

They could have turned the purchase option off. I've brought up 6 kids (well helped), it's not that difficult to control what your kids do, and set boundaries.

But then, just look at any shopping centre today, seems discipline and control are not considered necessary. (I've owned a shop) Kids handling $1k plus items with parents ignoring the 'do not touch' and getting snotty if you ask them to to stop the kids handling the goods, or jumping on displays.

Easier to blame someone else.

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Re: Ow... @AC 09:24

Yes, lazy parents.

I helped raise 6. You set the rules. Full stop.

Then, just look at any shopping centre these days to see totally lazy parents (the norm now it seems) in action.

We owned a shop. despite 'do not touch' signs, too often parents ignoring their kids picking up $1k plus items and getting snotty if you ask them very nicely to stop their precious beast from handling the goods, or jumping on the displays.

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@AC 10:51

I bought my kids a VTech MobiGo - sadly, compared to the games available on the family Wii, and my phone/tablet, it's only mildly diverting, and my kids aren't so easily amused that they didn't tire of it in a matter of days. I'm not making that mistake again (kid-friendly tablets aren't cheap) - when I think they're old enough for a real computer (or tablet, or whatever), I'll get them one, and make sure that they undetstand how it all works, and how not to bankrupt Daddy. In the meantime, I'm very grateful that every purchase through the Play store requires authorisation (does that inconvenience you dreadfully?), and that my kids are smart enough to understand that they are not to attempt "real money" purchases, anyway.

[Edit: I seem to have wandered into the "speaking as a parent..." trap, and thus probably invalidated my own opinion. Bugger.]

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Anonymous Coward

Think people should take responsibility for their actions - guess it's the banks fault if your give your kids your bank card and PIN? At least Apple have tightened it up now so I guess that's better.

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FAIL

Obvious troll is obvious.

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Anonymous Coward

Fact is some parents just give their kids their passcode for an easy life (i.e. they can't say no) - yes I realise it may be due to it not requiring the user to reauthorise for 15 minutes but believe that was always configurable.

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They provided FULL refunds

So hard to complain about the amount of money, since those are the only people who took part in the settlement. They're also changing the way they do things to make it harder for this to happen again.

It is hard to see a better outcome than this. Usually in such settlements the lawyers end up getting most of it for their "work", and the consumers involved get a check so small it is hardly worth the bother of cashing it.

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Re: They provided FULL refunds

A better outcome would have been full refunds plus a fine of, say, 1,000 times that amount.

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Re: They provided FULL refunds

A fine based on what, your hatred of Apple?

They didn't do anything criminal, or even unethical. At most they were careless in underestimating the ingenuity of kids, the technological cluelessness of parents and the greed of developers.

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LDS
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Re: They provided FULL refunds

No, Apple well estimated its own greed - "30% on each in app purchase? Hey devs, set the authorize purchase allowance time to 15m by default!" That's looks a bit unethical to me....

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Re: They provided FULL refunds

30% is the same that Google charges, so how is Apple being more greedy than Google here?

Do you really think that Apple added the 15 minute window not for convenience of customers (so they don't have to keep typing in their password) but so that kids would buy a lot of stuff without their parents knowing? Yeah great scheme, bad publicity all for increasing your profit by 0.000001%!

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Kudos

The Apple employee that did the cost benefits analysis on this one should get a raise.

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Question: did they also revoke the add-on functionality purchased?

Or are some kids getting power-ups for nothing here?

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Re: Question: did they also revoke the add-on functionality purchased?

I would guess Apple doesn't really have the power to do that. They just handle the payment, after that it's up to the app developer. A more interesting, but related question is whether they will get to keep their share of the money, or if Apple will take it back somehow.

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Re: Question: did they also revoke the add-on functionality purchased?

I would hope not - the ill-considered approach was Apple's.

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LDS
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Re: Question: did they also revoke the add-on functionality purchased?

Apple doesn't handle the payment only , it takes one third of that payment, thereby it's vey interested in allowing for as many purchases it can. The 15 minutes allowance window has no rationale than that. Think about an ATM that once you authorized your withdrawal allows for any withdrawal from your account within the next fifteen minutes....

If Apple set it, the app developer has no responsibility, if Apple manages payments and the allowance window, it's Apple responsible for it wholly - I guess the developer can do very little to change how the payment system works.

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"Think people should take responsibility for their actions - guess it's the banks fault if your give your kids your bank card and PIN? At least Apple have tightened it up now so I guess that's better."

I suppose. Just give your bank card to your kid, and then file a complaint to the FTC for "unfair billing practices" for "unauthorized transactions". It seems that you are under no obligation to return anything. It seems like this would make Christmas shopping really inexpensive. Just turn your kids free in the mall for a day, and let them get whatever they want (up to your daily limit).

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FAIL

Guess you're to stupid to read the complaint.

Try this analogy it's better, than your fucked up one.

You take the kid to the shop, they want a magazine, you pay for it with a credit card. Then for the next 15 minutes , they can buy anything else in the shop, without asking for the details again.

Now doesn't so so clever does it.

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It's made slightly worse, that you also need to enter your password to install free apps opening the same 15 minute window.

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Anonymous Coward

"You take the kid to the shop, they want a magazine, you pay for it with a credit card. Then for the next 15 minutes , they can buy anything else in the shop, without asking for the details again."

It's not quite like that though is it? What if you send them there on their own with cash?

When I were a lad my parents would give me a tenner to go to the shop and buy some milk and say "get yourself a chocolate bar if you like" and I did....and promptly returned with over £9 in change (those were the days eh!). I did NOT go on a shopping spree returning with bags full of sweets and Beano comics and spending every last penny. Why? because my parents raised me to respect them and their money.

If your child is the sort that would take that £10 and spend the lot then they don't deserve to use your iDevice! hell they don't deserve much more than bread and water if they think like that.

So who is at fault here? Apple for allowing the purchases or the parents for not educating their children on the fact that purchasing something through an app store is the same as buying it in the real store? or the parents again for not telling their kids to go buy a £10 iTunes voucher with the money they saved from their paper round/christmas/birthday and using that instead of being a Lazy parent who just allows them to use their card?

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You sir, are either a troll or a retard.

The shop analogy presented before is watertight. From the parent's perspective, they are authorizing ONE payment of a known value. Unless there is an option to say "No, I do not want a 15 minute window", or even something on-screen to let them know there IS a 15-minute window, then the problem lies with Apple.

If you paid for a magazine for your child with your card at a checkout, and while you were bagging up, the child picked up some sweets and placed them on the counter - the clerk charging those sweets to your card without your authorization would clearly be wrong.

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LDS
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You miss the difference in using paper money and electronic one. Sure, children can be educated better, but when a game pops up a nice new weapon or something alike, the risk children buying it because they don't see money going away is higher. Look at how it worked well with premium paid ringtones and other stupid stuff which lured a lot of chidlren (and not only them) to throw away money funneled into the pockets of greed people who knows how to exploit "social engineering" techniques to separate you from your money.

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Anonymous Coward

Apple? More like sour grapes!

(From http://www.bbc.co.uk/news/technology-25748292)

The company said it had settled rather than take on a "long legal fight".

Riiiight... Apple not up for long legal fights. Someone better tell Samsung.

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LDS
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Re: Apple? More like sour grapes!

There are legal fights and legal fights - good PR and bad ones. This one would be the latter - it exposes Apple as a greed company that exploits its customers with little tricks as purchase defaults. It's something you have to stop ASAP, especially before it gets too much coverage and more and more people become aware of that and change the defaults, crippling revenues from even more clueless users which didn't sue, and before a class action becomes possible.

The patent litigation with Samsung instead is good PR, it keeps even non-tech media keeping on talking about Apple and how it needs to protect its "great innovations and products" against the "yellow men" (citation from "Born in the USA", no racism intended) trying to steal the great ideas of the America's Company (of course, devices mostly designed and developed in the Far East anyway...)

Anyway we have:

1) Apple condemned for fixing book prices

2) Apple under investigation for illegal agreements to ensure developers are not offered better jobs

3) Apple settles this to avoid more litigations

A truly great company - when it comes to make more money in an unethical way.

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Re: Apple? More like sour grapes!

It's not the fight that Apple does not like. It's the risk that a judge decides that Apple is colluding with rip-off merchants and scummy people by providing the infrastructure they need to rip off people and provides incentives for this kind of business because Apple is taking a cut of the loot.

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interest?

So, what about the interest crApple has been earning on the money they already collected?

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Re: interest?

So, what about the interest crApple has been earning on the money they already collected?

What Interest? Where do Apple bank? If there able to actually earn anything from Interest, then I need to start doing my banking there too....

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Anonymous Coward

Oh man you gotta love dumb parents. Too bad they got refunded.

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"Dumb Parents"

"Oh man you gotta love dumb parents. Too bad they got refunded."

"In some cases, a parent could authorize a child's in-app purchase, which was charged to the adult's credit card, and not realize that for the next 15 minutes, further purchases could be made without parental intervention – giving the kid a large window of time to buy plenty of expensive stuff."

Would you have guessed that making a transaction enables further transactions to be made for 15 minutes after the original transaction is done? Assuming that the was some sort of notification somewhere about this odd "feature" it was obviously not prominent enough. It's not about parents being "dumb", it's about hidden and unsuspected features that can be easily abused.

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Re: "Dumb Parents"

Right in the settings, under restrictions it says

In-App Purchases On/Off

Require Password - options are EVERY TIME, or every 15 mins And this applies to any purchases made. Not too had to figure out.

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Re: "Dumb Parents"

...and what are the default settings? In the same way that forgetting to un-tick a tickbox should not be considered giving consent, neither should this.

Consumers should be allowed a little negligence. Companies should not.

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Re: "Dumb Parents"

"Require Password - options are EVERY TIME, or every 15 mins And this applies to any purchases made. Not too had to figure out."

This has changed. Up until 2010/2011-ish, IIRC, all that was required was the device being linked to the iTunes account - and people complained. It was around that time that Apple added the need to enter the iTunes password - and people complained because of this 15 minute window.

I don't know, but strongly suspect, that change didn't include an option to always enter the password, and that came later still.

Certainly, looking at the actual FTC complaint is interesting. That mentions the complaints since March 2011 about the 15 minute window - which ties in with what I remember above.

The bottom of page 4 also points out that if the child 'clears' the pop-up about an in-app purchase outside of the 15 minute window, the password prompt is displayed with no information as to why the password is needed. And if the parent doesn't realise, and enters the password, that's another 15 minute window.

The next page mentions that "In September 2013, on devices running Apple’s latest operating system, Apple reversed the order of the process described in paragraphs 15-17, displaying the Password Prompt before the Charge Popup." - so they must have realised this was an issue by that point. (For all we know, they realised in April 2011, and it took them that long to make the change!)

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Re: "Dumb Parents"

"In some cases, a parent could authorize a child's in-app purchase, which was charged to the adult's credit card, and not realize that for the next 15 minutes, further purchases could be made without parental intervention – giving the kid a large window of time to buy plenty of expensive stuff."

Would you have guessed that making a transaction enables further transactions to be made for 15 minutes after the original transaction is done? Assuming that the was some sort of notification somewhere about this odd "feature" it was obviously not prominent enough. It's not about parents being "dumb", it's about hidden and unsuspected features that can be easily abused.

Since when was "Ignorance", an excuse for the Law?

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Re: "Dumb Parents"

"Since when was "Ignorance", an excuse for the Law?"

Tell that to Apple, they're the one's who broke it

FTC chairwoman from the article says "You cannot charge consumers for purchases they did not authorize."

Just because Apple says that entering your password means you've authorized all purchases for 15 minutes doesn't mean that the actual law is going to agree with them...

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@ Michael Habel

"Since when was "Ignorance", an excuse for the Law?"

Since when are Apple's option settings "law"?

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Default off for in App purchases?

Why are apps allowed to be downloaded with in app purchases enabled? They should also ship their devices with in app purchasing off by default. Odd that they don't, maybe they know they make more money, even after the refunds, buy not doing so.

My two pences worth, we were caught out early a year ago, £25 of purchases were made before the plug was pulled, Apple refunded it.

As for consumer rights, Google locked me out when I updated an expired card, unless I hand over a copy of my passport. I switched to Amazon app store instead. May as well troll my experience:-

http://furbian.blogspot.co.uk/2012/06/my-google-walletplaycheckoutwhatever.html

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Incompetent parents win again...

Purchases they did not authorize ? so the child entered the card details did they ? I regularly stayed in hotels as a young teen, a few of these offered room service through an automated phone system, if I'd ordered food without my parents knowledge would that be the hotels fault or my parents ?

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Re: Incompetent parents win again...

Err the Hotels, unless you parents are expected to carry around a phone lock every time.

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Re: Incompetent parents win again...

The hotel's unless the hotel made it clear in the T's&C's that you had to sign when you signed in that all room service requests would be charged to the supplied credit card.

Given that AFAIK this is quite common in hotels, I suspect they've been bitten by that in the past and learnt from it.

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