September 5, 2014
Google To Refund $19 Million To Parents Whose Kids Made In-App Purchases
John Hopton for redOrbit.com - Your Universe Online
Google has agreed to refund 19 million dollars’ worth of in-app purchases made by children without their parents’ knowledge. The refunds will settle a Federal Trade Commission (FTC) complaint similar to those against Apple and Amazon earlier this year.Google has offered in-app purchases to Android users since 2011, but are deemed not to have been vigilant enough in ensuring that children could not make purchases on their parents’ credit cards without the parents’ awareness or authorization. Much of the problem relates to games in which, an FTC statement says, “users are invited to accumulate virtual items that help them advance in the game.”
According to Reuters reporter Diane Bartz, “In the game Air Penguins, for example, children can buy virtual fish costing $49.99 to feed virtual penguins living on virtual melting ice caps.” Children may not have been aware they were spending real money, and the charges were very easy to accept, as "Children could rack up charges just by tapping on pop-up boxes," according to FTC Chairwoman Edith Ramirez.
In 2012 Google took steps to try and reduce the problem, by asking for authorization from the card holder when purchases were made. However, a window of 30 minutes in which unlimited purchases were possible remained open after the initial authorization. The company received many complaints from parents about the ease at which children could buy in-app products ranging from 99 cents to $200.
“For millions of American families, smartphones and tablets have become a part of their daily lives,” said Ramirez. “As more Americans embrace mobile technology, it’s vital to remind companies that time-tested consumer protections still apply, including that consumers should not be charged for purchases they did not authorize.”
The case involving Google is the third in which the FTC has dealt with unauthorized in-app charges by children. In January, the agency announced a settlement with Apple requiring them to give full refunds to consumers who were billed for unauthorized charges by children, at a cost of around $32.5 million. They were also asked to “obtain express, informed consent for in-app charges.” And in July, the FTC filed a complaint in a federal court against Amazon.com along very similar lines.
As the Los Angeles Times points out, Ramirez made clear there was no reason to believe that Google intentionally tried to encourage in-app purchases that card holders were unaware of. "We’re not alleging there was any malicious intent here," she said. "We are saying that companies need to ensure they obtain informed consent."
Google has now changed its process for in-app purchasing. “We’ve already made product changes to ensure people have the best Google Play experience possible,” a spokeswoman told GreenBot. “We’re glad to put this matter behind us so we can focus on creating more ways for people to enjoy all the entertainment they love.”
Google employees are said by the FTC to have referred to the practice as "friendly fraud" and "family fraud" when discussing what had turned into a major cause of refund requests from thousands of parents. However, the company initially referred parents to the app developer for refunds.