Apple Refunds $32.5 Million for Kids' App Purchases

The settlement with the FTC stems from kids buying apps without parents' permission.

The Apple Store on 5th Avenue as seen during the 25th Annual World AIDS Day on Dec. 1, 2013, in New York City.
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Apple will repay a minimum of $32.5 million to parents whose children bought items on iPhone and iPad games without their knowledge, sometimes spending thousands of dollars, according to a settlement reached with the Federal Trade Commission.

This refund amount pales in comparison with the $10 billion income of the company's App Store during 2013. The FTC settlement published Wednesday said the company failed to tell parents that by entering a password they enabled a 15-minute window for children to make purchases on their devices.

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Among the tens of thousands of customer complaints the FTC received about these unauthorized in-app purchases included one example of a consumer's daughter who spent $2,600 in the app "Tap Pet Hotel."

"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," said FTC Chairwoman Edith Ramirez. "You cannot charge consumers for purchases they did not authorize."

Apple also has until March 31 to modify its billing practices so it gains "express, informed consent" from consumers prior to billing them for in-app charges, and give consumers the ability to opt-out at any time, according to the settlement.

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Apple already notifies users about the 15-minute window and gives them the option to cancel the in-app purchase ability at any time, but the FTC wants this information to be clearer.

Apple has also refunded money as part of a settlement to a class action lawsuit in 2013 made by parents making similar complaints about a 15-minute gap allowing children to make purchases without a password.