Apple to pay millions for letting kids make in-app purchases without parental consent

In the coming months Apple will pay millions of dollars back to customers for letting their children make in-app purchases without parental consent.

Under the terms of the settlement, brokered by the Federal Trade Commission (FTC), the Cupertino-based giant will pay a minimum of US$32.5 million in refunds to any customers and will also be forced to change its billing practices.

Until now, even children’s apps have allowed people to make in-app purchases ranging from 99 cents to US$99.99 per in-app charge. This occasionally resulted in kids racking up massive bills on their parents’ credit cards.

In an official post on the matter, the FTC explains that the original complaint alleges that Apple “does not inform account holders that entering their password will open a 15-minute window in which children can incur unlimited charges with no further action from the account holder”.

In addition, it says, Apple has often presented a screen with a prompt for a parent to enter his or her password in a kids’ app without explaining to the account holder that password entry would finalize any purchase at all.

It adds that it was forced to step in after Apple received “at least tens of thousands of complaints about unauthorized in-app purchases by children”.

Apple will now be forced to ensure that it has obtained express, informed consent from consumers before charging them for items sold in mobile apps.

“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,” said FTC Chairwoman Edith Ramirez. “You cannot charge consumers for purchases they did not authorise.”

Under the terms of the settlement, Apple is required to send out notices to anyone who has made in-app purchases and refund anyone whose children made purchases. In addition to allowing for informed consent, the tech giant will have to give people the option to remove that consent at any time. All of these requirements must be met by 31 March.