Apple Reimbursing Customers for Unapproved In-App Purchases

Apple has begun the process of refunding customers for unapproved in-app purchases, following its $32.5 million settlement with the Federal Trade Commission (FTC).

Apple sent emails to customers whose accounts were charged for in-app purchases, and asked them to sign into their iTunes accounts and review their purchase histories. It directed anyone who finds an unapproved purchase to a site where they can file a request for a refund, Polygon reported April 7. (The link provided by the site is broken, however, or has been changed.)

“We’ve heard from some customers that it was too easy for their kids to make in-app purchases,” Apple said in its email, according to the report.

Finally, Apple also pointed users to a page explaining how to set up in-app purchasing restrictions.

The iPhone’s default mode is that after a user signs into his or her account, a 15-minute window is left open, during which the user doesn’t have to enter a password again to make a purchase. To disable the window and require that a password be required for every purchase (which Apple recommends making different from the sign-in password) users should visit “settings,” then “general” and “restrictions.”

Apple added that for children 13 years or older, parents may want to consider allowing purchases using iTunes Gifts or a “monthly allowance” that can be set up through Apple for amounts between $10 and $50. (Any amount left over carries into the next month.)

The FTC last year conducted a review of “thousands of complaints” made by consumers about unauthorized purchases made by their children—many of whom enjoyed the 15-minute window that the adults who owned the phones were oblivious to.

In one instance, a child playing the games “Dragon Story” and “Tiny Zoo Friends” racked up a $500 bill while, in another, a girl playing “Tap Pet Hotel” added $2,600 in charges to her mother’s credit card.

“Our charge is that, even after receiving at least tens of thousands of complaints about unauthorized charges relating to in-app purchases by kids, Apple continued to fail to disclose to parents and other apple account holders that the entry of a password in a children’s app meant they were approving a single in-app charge plus 15 minutes of further, unlimited charges,” the FTC said in the complaint it filed against Apple.

In January, Apple settled with the FTC. Under the terms of the agreement, Apple has to alert customers who were billed for in-app charges (which it now has) and issue any appropriate refunds promptly. If after 12 months Apple hasn’t paid out the agreed $32.5 million, the remainder will go to the FTC.

The European Commission (EC) has also spoken with Apple, Google and other mobile industry leaders about the problems of the in-app purchase model.

The EC has called children “particularly vulnerable” to the marketing of “‘free to download’ games that are not free to play.”

EU Justice Commissioner Viviane Reding, in a Feb. 27 statement, described the mobile app industry as having “enormous potential.” However, she added, “For the sector to deliver on its potential, consumers must have confidence in new products. Misleading consumers is clearly the wrong business model.”

Follow Michelle Maisto on Twitter.