Jan. 15 - Apple has agreed to give back $32.5 million to settle charges about billing for kids in-app purchases without parental consent. Bobbi Rebell reports.
Apple will refund consumers at least $32.5 million - settling Federal Trade Commission charges about in-app purchases by kids without their parents' consent. Edith Ramirez, FTC Chairwoman: SOUNDBITE: EDITH RAMIREZ, CHAIRWOMAN, FEDERAL TRADE COMMISSION (ENGLISH) SAYING: "We have alleged that Apple was aware of this issue since at least March of 2011 and that they failed to fix the problem. In our view the problem continues and it needs to be rectified." The heart of the problem was a 15-minute window. Parents would enter their password- make one purchase- walk away- and the kid would run up huge tabs. Hudson Kingston of the Center for Digital Democracy: SOUNDBITE: HUDSON KINGSTON, LEGAL DIRECTOR, CENTER FOR DIGITAL DEMOCRACY (ENGLISH) SAYING: "When the parent was putting in their password, so it didn't say, just a quick sentence: 'this is going to open up your ability to make purchases for the next 15 minutes.' And that has been how the app store has worked since 2010. So it's been something that Apple has been aware of, They were made aware of the impact on parents due to tens of thousands of complaints and they never changed that disclosure and I think that it was sort of their lack of action when faced with that many complaints that makes this such an important case for consumer protection." The FTC cited one case where the child spent $2,600 in the app Tap Pet Hotel. SOUNDBITE: EDITH RAMIREZ, CHAIRWOMAN, FEDERAL TRADE COMMISSION (ENGLISH) SAYING: "We have alleged, in aggregate, children ran up millions of dollars in charges without their parents' knowledge or consent." Apple says it's received 37,000 complaints and is in the process of reimbursing them. But Apple is far from alone in this: SOUNDBITE: HUDSON KINGSTON, LEGAL DIRECTOR, CENTER FOR DIGITAL DEMOCRACY (ENGLISH) SAYING: "Hopefully they will go on to look at the actually app developers themselves because while a percentage of the money in those in app purchases went to Apple, a larger percentage went to the app makers themselves and the marketing companies that were trying to convince children to buy all of these things inside of the apps." While the refunds will be available for purchases through apps aimed at children, all Apple apps will get new disclosures.