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Tag: refund

  • Apple Pays $32.5 Mil. To Parents Who Didn’t Consent

    Unintentional (or intentional) digital purchases have been a rising epidemic for parents who’ve allowed their offspring free reign over their iTunes login and credit card.

    Last Wednesday, the U.S. Federal Trade Commission announced that Apple Inc. will refund at least $32.5 million to U.S. consumers after ongoing complaints were made about charges concerning children purchasing mobile apps without their parents’ consent.

    “In all, we received 37,000 claims and we will be reimbursing each one as promised,” Apple chief executive Tim Cook said in a letter to his employees.

    The terms of the settlement also state that Apple will be required to alter its billing practices in order to obtain a form of parental consent before transactions of in-app content are made.

    “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.”

    Ramirez estimated that children wind up spending millions of dollars in in-app purchases without their parents’ knowledge. One mother told the agency that her daughter, while playing the game “Tap Pet Hotel”, ended up spending $2,600.

    According to Ramirez, the FTC received “tens of thousands of complaints” from consumers who incurred charges racked up by their children who, unbeknownst to them, made in-app/game purchases.

    According to the FTC complaint, Apple does not inform account holders that entering their password in the App Store opens a 15-minute time slot for children to be able to incur unlimited charges.

    “To be clear, the issue is not that Apple opens a 15-minute window for in-app purchases,” Ramirez said. “What we challenge is the fact that Apple does not inform users of the existence of the window. When parents enter a password, they do not know the full scope of charges they could incur.”

    Wording for new Apple app disclosures haven’t been finalized, but refunds will be available for purchases through kid marketed apps; if you’ve made an accidental purchase, you’ll have the ability to get an immediate refund.

    This isn’t the first time parents didn’t know their kids were buying apps without their agreement. In June, Apple wound up paying $100 million to parents who had no idea their kids were spending their money.

    Picture via YouTube


  • Apple Refund: Company To Refund Over $30 Mil. In App Case

    As of late, this writer has seen a trend among the toddlers and young children she finds herself around; most of them are better at handling an iPhone or iPad than many adults. This is certainly not undue, at least partially, to the corresponding trend of parents loaning their tech goodies to their children so as to keep them entertained in restaurants, cars, stores, and other places that may prove boring for even the most well-behaved children. The way that the new generation is becoming so immersed in new technology, so much so that it is almost something natural, is a pretty incredible thing, but does not come without its drawbacks. Such as, oh, finding out that little Timmy spent $100 on snacks for his virtual pet dragon.

    Come to find out, stories such as that hypothetical example are not uncommon, and the parents of little Timmy and other children like him are not at all pleased. The obvious question that comes to mind is how, exactly, the children are able to make these purchases in the first place. After all, most six-year-olds aren’t running around with credit cards. The answer lies in some rather shady trickery; children download free apps and games to their parents devices, and then go to buy power-ups, snacks, jewels, or coins for their respective games. A box will pop up, asking for a password, and children hand the device to their parents so that they can key it in. Afterwards, a 15 minute window is opened, where children have free reign to download and purchase goodies without any need of their parent’s consent or unwitting help.

    What those children and parents didn’t know, though, was that by typing in their password, they were allowing the app to charge real money for virtual tokens. When bills showed up at the end of the month, parents were enraged, claiming that they had not been told of the charges and that they shouldn’t be expected to pay for goods they were never told they purchased. And those purchases certainly add up; one parent reported that her daughter had spent over $2,000 on “Pet Tap Hotel,” and others claimed to have lost over $500 on games like “Dragon Story” and “Tiny Zoo.” Enraged, parents took to complaining and making claims against Apple, looking to get their money back.

    Today, Apple reached a settlement with the Federal Trade Commission, which will include up to $32.5 million in refunds to jilted parents. Apple has agreed to provide full refunds to those effected by their children’s unwitting spending sprees, and has sent emails to people that it believes may have been effected in such a way. People who suspect that they may have lost money due to such circumstances are also encouraged to email Apple, if they have not received any word from the company.

    FTC Commissioner Edith Ramirez said on the topic, “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.” Apple also released a statement, simply stating, “Today’s agreement with the FTC extends our existing refund program for in-app purchases which may have been made without a parent’s permission.”

    Apple also claimed that it already had programs in place to refund parents who found that their children had amounted charges without their permission, but that it would rather agree to the FTC’s conditions than draw out a long, nasty court battle over the topic. Either way, it seems like wronged parents will be getting their money back, and will probably be keeping a closer eye on their children’s app usage in the future, too.

    Image via Apple’s website.

  • Capital One: Credit Card Company Must Refund $150 Million

    Capital One must repay its credit card customers $150 million after federal regulators determined the company was using deceptive business practices to trick its clients into signing up for services they didn’t want or need. Although Capital One neither admitted nor denied liability in the settlement — they claim third party vendors were to blame for the problems — they won’t be able to escape paying an additional $60 million in penalties to the government.

    “We are accountable for the actions that vendors take on our behalf,” explained Ryan Schneider, president of Capital One’s credit card business. “These marketing calls were inconsistent with the explicit instructions we provided to agents for how these products should be sold. We apologize to those customers who were impacted and we are committed to making it right.” And by committed, of course, they mean forced to by the Consumer Financial Protection Bureau.

    According to Richard Cordray, director of the aforementioned bureau, Capital One used deceptive practices to get its customers to sign up for such services as payment protection plans and credit monitoring. Employees at various call centers would often lie to card holders about the price of such options, sometimes proclaiming that signing up was free. Others told clients these services weren’t optional, leading some to say they felt pressured into getting the products.

    Although Capital One is guilty of using such tactics, Cordray stated that such practices were not unique to one single institution. “We are putting companies on notice that these deceptive practices are against the law and will not be tolerated,” he stated.

    Did you or someone you know fall victim to these extremely shady business transactions? Here’s what you need to know about the refund: If you’re still a customer with Capital One, then a refund should show up on your account. Those of you who have closed your accounts, however, should receive a check in the mail. These refunds will be issued by the end of the year.