Apple will pay $100 million to parents to settle in-app lawsuit

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Action grew out of children racking up thousands in bills

Apple has settled a class action lawsuit over the practice of so-called “in-app purchases,” agreeing to pay a total of $100 million to parents whose children made in-app purchases on games in iTunes.

Under the terms of the settlement, parents whose children charged $30 or less in an app will receive $5 in iTunes Store credit. Parents who don’t have an iTunes account anymore will get $5 cash instead. If a child charged more than $30, the parent must produce documentation showing the amount and date of each purchase.

Claims can be filed online at the settlement website, .

Continuing uproar

The public uproar over in-app purchases began in February 2011, when The Washington Post published a  detailing, among other horrors,  a Rockville, Maryland girl who racked up an eye-popping $1,400 bill while playing the game Smurfs’ Village.

Within weeks, the Federal Trade Commission (FTC) announced that it was reviewing Apple’s in-app purchase policy. The review came at the request of Rep. Ed Markey (D-Mass.), who sent the FTC a letter after reading the story in the Post.

Then-FTC Chairman Jon Leibowitz told Markey in a letter that the FTC “fully share[s] your concern that consumers, particularly children, are unlikely to understand the ramifications of these types of purchases.”

“Let me assure you we will look closely at the current industry practice with respect to the marketing and delivery of these types of applications,” Leibowitz said.

The month after the Post story was published,  that it had changed its policy, now requiring passwords for in-app purchases in recently-downloaded apps.

Consumer complaints

ConsumerAffairs has heard from consumers shocked to find the sizable Apple charges on their credit card.

Last year, we  the saga of Kristy from Portland, Michigan, whose eight-year-old son racked up over $1,140 in charges while playing the “free” game Dragonvale.

“On March 30, he made 15 purchases totaling $720 in less than one hour,” Kristi wrote in a ConsumerAffairs post. “On March 31, the charges totaled over $420 in under 20 minutes.”

After investigating, Kristy found that the in-app purchases were for things like sacks of food, dragon treats, and bags of gems to be used in the game.

(originally published at )