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Apple Will Refund at Least $32.5 Million in FTC Settlement

Apple has agreed to pay at least $32.5 million to settle a Federal Trade Commission (FTC) complaint that it charged consumers for in-app purchases incurred by children on kids’ mobile apps without verifiable parental consent.  Apple has also agreed to change its billing practices by March 31, 2014 to ensure that it receives “informed” verifiable parental consent before charging for in-app purchases made on mobile apps directed to children. Apple also agreed that if it gets consumers’ consent for future charges, consumers must have the option to withdraw their consent at any time.

Under the current system on iTunes, parents were required to enter a password to process in-app purchases, however, according to the FTC, Apple failed to notify parents that by doing so, in addition to approving a single in-app purchase that they were also consenting to 15 minutes of additional unlimited purchases their children could make without further action from the parent.

In its press release, the FTC noted that Apple has received thousands of complaints about unauthorized purchases. FTC Chairwoman Edith Ramirez said in a statement, “This settlement is a victory for consumers harmed by Apple’s unfair billing, and a signal to the business community: whether you’re doing business in the mobile arena or the mall down the street, fundamental consumer protections apply, you cannot charge consumers for purchases they did not authorize.” 

Under the settlement, Apple must pay at least $32.5 Million to consumers billed for in-app purchases incurred by children that were accidental or unauthorized. Should Apple be required to issue less than the full $32.5 million, it must forfeit the balance to the FTC.

For more information visit the FTC's Press Release.

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