Oops!: Apple refunds $32.5M for accidental in-app purchases made by kids

According to the AP, Apple is going to refund $32.5M for in-app purchases made by kids. That’s a lot of oops!

Apparently parents entered the password in order for kids to download and play free games. However, what many parents didn’t realize is that after entering their password, kids could make purchases for up to 15 minutes without having to re-enter the password. Also, because the games were free I’m sure some parents just entered their passwords thinking they were granting their kids permission to play the games and didn’t realize they were making purchases. And I’m sure plenty of kids know their parents’ passwords and likely entered it themselves.
I’m curious the extent to which kids were aware of the fact that they were making actual purchases though. Video games often involve earning coins, points, or other currency that can be used to “purchase” virtual items within the game, earn extra lives, etc. So when the kids purchased virtual items within the game, it is reasonable to assume some kids did not comprehend that the items were purchased with actual dollars (mom or dad’s credit cards), but rather some probably thought they were purchasing virtual items with virtual currency. Thus I’m glad that in addition to offering refunds, the FTC is also requiring Apple to make it more clear when users are about to be charged for purchases.
This “oops” moment highlights the importance of technical and social regulations working alongside one another. Requiring a password is one way to prevent unwanted purchases. Undoubtedly many parents who allow their kids to play on their mobile devices have had conversations with their kids about asking permission prior to downloading things from the app store. However, this case demonstrates that even when kids ask permission and parents grant permission, there is confusion about what is actually happening. Again, I would venture to guess many kids didn’t realize they were making purchases and parents didn’t realize they were granting said permission. Social norms can only go so far, in this case there needs to be greater technological safeguards in place that would prevent unintended purchases.
Perhaps Apple could create a two-password system for parents – one they enter when they want to keep the 15 minute window open and another password they use or give to their kids that would have different restrictions. For example, the password would not leave the window open for 15 minutes after use, it could have a spending limit set by the parents, and a limit on how many times it could be used within a set amount of time. This would grant children some agency to make purchases, but prevent them from accidentally going too far. Either way, I’m glad to see Apple taking responsibility and refunding accidental purchases and that they will be making changes to in-game purchases. Also nice to see the FTC stepping in and attempting to protect consumers in this instance.

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