Search engine giant Google has been ordered to refund millions of dollars worth of in-app purchases to parents after the measures they put in place to stop children from making purchases were deemed to be inadequate by the Federal Trade Commission (FTC).
While a good mobile application is an excellent way to raise awareness of a company or product, it appears that the safeguards in place to prevent children from making unwanted purchases using the app, such as password protection and warnings that a purchase is about to be made, are not good enough in the eyes of the law.
It’s not just Google who are feeling the pinch though. Apple has similarly been asked to refund millions in purchases made in mobile apps for the iPad and iPhone.
It is a little bit of a sketchy area as both companies argue, and will likely continue to do so, that the purchases are clearly labeled as such and the burden should be on the parents to ensure that their child is educated about what this means and how not to go about spending money that they are not authorised to spend.
Monetising mobile apps through the use of in-app purchases is one of the most popular practices used by companies that want to be able to offer their application for free. In the vast majority of cases the app will be perfectly usable without any money having to be paid, however certain features and bonuses will come much more slowly to the player unless they choose to make a purchase. It is a practice that is seen in many different games, as anybody who has played one can probably attest to.
The problem comes when parents allow their children to use their phones to play such games without supervision, meaning that they are free to use any stored credit or bank card information to make purchases without the parent’s knowledge.
FTC Chairwoman Edith Ramirez commented “For millions of American families, smartphones and tablets have become a part of their daily lives. 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 authorise.”
The FTC has also claimed that when Google first introduced in-app purchases no password was required and even a year later people using the application were still not being properly informed of charges that they may be liable for.
They continue “Google also did not inform consumers that entering the password opened up a 30-minute window in which a password was no longer required, allowing children to rack up unlimited charges during that time.”
The thousands of complaints that arose from this led to Google and Apple both being accused of attempting to defraud users of the applications, It appears likely that more stringent security measures will be put in place, however we also urge parents to educate their children about the potential consequences of making in-app purchases before allowing then to use their mobile device.