Apple will alter its billing practices by notifying parents of opened 15-minute window to make purchases through App Store and within Apps.
After settling a class-action lawsuit last year, now Apple Inc. (NASDAQ:AAPL) will refund more than $32 million to customers whose kids made purchases without their consent.
The announcement came from the CEO Tim Cook, in a letter to employees, explaining: the close agreement between the Cupertino and the Federal Trade Commission (FTC).
The dispute over unauthorized purchases within apps has come to the conclusion on Wednesday. The FTC also said that Apple had agreed to reimburse all affected users and would modify its cracked down billing practices for App Store and In-App purchases.
“We allege that Apple has been aware of the issue since at least March of 2011,” said Edith Ramirez, the FTC chairwoman. “In our view the problem continues, and it needs to be rectified.” The FTC has given a March 31 deadline to notify affected consumers about the refunds and to make other changes in their practices.
Earlier, Apple allowed users to make transactions without having to provide any authorization that are made within 15 minutes of buying an app from Apple. And last year, many kinds had been misled by video games and other software, to make purchase of additional services with no clear sign of a fee. And it came as a nasty surprise to many parents who received long credit card statement, found themselves spending thousands of dollars. In one case, a parent said her daughter had spent $2,600 playing the “Tap Pet Hotel” app. In another case, a child reportedly spent $500 in the “Dragon Story” and “Tiny Zoo Friends” apps.
In the related matter, Tim Cook has said that we promised to repay any in-app purchase made without parental permission last year. We contacted every single person who had been a victim. We sent a total of 28 million emails. When the emails were being rejected, we sent letters to parents. We have received 37,000 calls so far that are being refunded.
“It doesn’t feel right for the FTC to sue over a case that had already been settled. To us, it smacked of double jeopardy.” Tim said in an email. “We do not require us to do anything we weren’t already going to do.”
Besides, Apple already made some changes on iTunes in 2011 that force users to re-enter passwords while making another purchase with an app and send alerts, even the 15-minute window is opened. Moreover, iOS also offers more controls over in-app purchases in which they can turn it off. Therefore, Apple isn’t directly responsible for bad practices made by developers that led to a class-action lawsuit.