Game Maker Says 40% of iTunes In-App Buys Are Fraud

chicksdaddy writes "Hong Kong-based Lakoo, maker of the Empire Online game, says that 4 in 10 in-application purchases by users of the iOS version of its MMORPG are fraudulent, and made through compromised iTunes accounts. But Apple has turned a deaf ear to its requests for help to stop the bogus activity."

Comments

If this were a systemic Problem,

[ClaraBow]

I'd imagine that more developers would come forward and complain.

Re:If this were a systemic Problem,

[commodore6502]

It likely IS a problem but Apple..... like Paypal..... chooses to ignore the abusive, illegal payments. Paypal eventually ended-up before the US DOJ and forced to refund money back to various persons (I got $75). Perhaps the same will happen with Apple in a few years.

Re:If this were a systemic Problem,

[VGPowerlord]

Like, say, the developers of Lugaru HD?

Re:If this were a systemic Problem,

[ElectricTurtle]

Quite frankly I'm surprised that the developer is coming forward to complain that people are buying things, even if it is without their knowledge, unless of course there is some reversal process that is eating up their margins (probably is).

Re:If this were a systemic Problem,

[VGPowerlord]

...and I realized after the fact that this article is about in-game purchases and fraudulent credit cards, not fraudulent programs. Whoops.

Re:If this were a systemic Problem,

[Dahamma]

Those seem to be totally unrelated issues (beyond the part about Apple not giving a shit, I guess).

That was someone taking a GPL game and selling it on the store, where the complaint in the article is about people using hacked iTunes accounts for in-app purchases. It's copyright violation vs. credit card fraud, "apples" and oranges...

Re:If this were a systemic Problem,

[PopeRatzo]

It likely IS a problem but Apple..... like Paypal..... chooses to ignore the abusive, illegal payments.

What incentive do they have to protect their customers? This isn't the 1970s any more.

Understand, it's not personal, it's just that the corporations have declared war on us. They're just doing what they were designed to do: profit no matter who gets hurt. Yet you still hear people say that there's "too much regulation". "Too much government". When corporations are the ones funding election campaigns, what do you expect lawmakers to do but whatever the donors say.

The corporation is a person that doesn't pay tax like a person.

Re:If this were a systemic Problem,

[inside0ut]

Yup, I know someone who's job is doing a lot of refunding of these transactions. The offending apps are well known, he even pointed out a couple apps on the top downloads. The developers (and apple) are the ones that pocket the money

Re:If this were a systemic Problem,

[Anonymous Coward]

Most of the devs probably don't even know.

Of the ones who do know, most are probably too afraid to stand up to Apple in fear of being thrown off the store with some bogus reason. (application had a bug, lets people steal accounts, blah blah etc.)

It is an awful state to be in if you are an indie developer because you simply can't afford to piss off popular distribution channels operators or they can cut you off just like that.

Re:If this were a systemic Problem,

[maxume]

Part of the problem is that there is plenty of bad regulation.

The over-protection of corporations is probably high up on the list though.

Re:If this were a systemic Problem,

[shadowrat]

as a developer I think i can shed some light on why they would come forward. People complain to the developer. Apple is far better at ignoring complaints than I am. Frankly, I don't know how they do it. I strongly suspect there are people at Apple whose job is to listen to the complaints, get drunk and commiserate on how everything sucks and nobody appreciates the work they do.

I didn't RTFA, but i would think the developer gets complaints from the account holders that people are buying stuff in their game. The people probably complain to apple, but apple responds in typical stoic fashion. The consumers then complain even louder to the developer.

Re:If this were a systemic Problem,

[Anonymous Coward]

Nope, nope, nope. I'll mod all of his accounts, except the original, down until he stops acting like MichealKristopeit.

Re:If this were a systemic Problem,

[gknoy]

I believe that's still moderating improperly.

Concentrate more on promoting than on demoting. The real goal here is to find the juicy good stuff and let others read it. Do not promote personal agendas. Do not let your opinions factor in. Try to be impartial about this. Simply disagreeing with a comment is not a valid reason to mark it down. Likewise, agreeing with a comment is not a valid reason to mark it up. The goal here is to share ideas. To sift through the haystack and find needles. And to keep the children who like to spam Slashdot in check

While the user might spam Slashdot in general, if the comment itself isn't spammish (and it wasn't), you've effectively modded his (good) comment down because you don't like that he tends to spam/sockpuppet.

Re:If this were a systemic Problem,

[h00manist]

Part of the problem is that there is plenty of bad regulation.

The over-protection of corporations is probably high up on the list though.

The other part of the problem is that people think the elections for powerless politicians who no longer control society mean there is actual democracy and freedom, and there is no need to protest control by corporations who effectively dictate how much of society works.

Re:If this were a systemic Problem,

[Attila Dimedici]

Yet you still hear people say that there's "too much regulation". "Too much government". When corporations are the ones funding election campaigns, what do you expect lawmakers to do but whatever the donors say.

Do you not see the inherent contradiction in saying that there isn't too much government (at least that is how the first part of this parses for me), followed by saying that lawmakers do what the corporations tell them to do? If the lawmakers are passing laws that the corporation tell them too, how can getting them to get rid of some of those laws not be a good thing?

Re:If this were a systemic Problem,

[KDR_11k]

The problem is that politicians have to obey both their bribers and the public (after all they don't get re-elected otherwise). The easiest way to do that is to cut the regulations big business wants gone and then throw up a smokescreen of misinformation so nobody complains that it's the wrong regulations being killed.

Re:If this were a systemic Problem,

[oliverthered]

now how did that happen.... oh elections for politicians that created the system that rendered the people powerless... who'd have though, government wanting the people to be powerless. obviously not the voters.... or maybe it was..

Re:If this were a systemic Problem,

[bball99]

that's it! blame the Mexicans! blame the NRA! blame everyone and anyone *except* oneself!

no such thing as personal responsibility nowadays...

and anyway, overpriced phones and insipid apps are for idiots

now all you geeks get off my Internet front lawn!

Re:If this were a systemic Problem,

[oliverthered]

that would be:
DSM-IV antisocial personality disorder (ASPD), and the ICD-10 antisocial personality disorder and dissocial personality disorder (DPD).

aka psychopath or sociopath.

Re:If this were a systemic Problem,

[oliverthered]

compulsion to lie
blame other people
lack of empathy
no feeling of guilt.
seems to use words without actually understanding the meaning.

Apparent lack of remorse[4] or empathy for others
Persistent lying or stealing (my lawn)
Cruelty to animals[5] (e.g. geeks)
Poor behavioral controls — expressions of irritability, annoyance, impatience, threats, aggression, and verbal abuse; inadequate control of anger and temper
A history of childhood conduct disorder
Recurring difficulties with the law
Promiscuity
Tendency to violate the boundaries and rights of others
Aggressive, often violent behavior; prone to getting involved in fights
Inability to tolerate boredom
Poor or abusive relationships
Irresponsible work behavior
Disregard for safety

Re:If this were a systemic Problem,

[PopeRatzo]

Do you not see the inherent contradiction in saying that there isn't too much government (at least that is how the first part of this parses for me), followed by saying that lawmakers do what the corporations tell them to do?

No contradiction here. There's not "too much government" there's "too much money in elections".

Get a handle on campaign finance, and you'll see government magically become "right-sized".

Re:If this were a systemic Problem,

[PopeRatzo]

The problem is that politicians have to obey both their bribers and the public (after all they don't get re-elected otherwise).

No, the politicians have to "obey" their bribers, but they only have to fool the public. And with corporate ownership and consolidation in the media, that's becoming easier all the time.

And when the telecoms and other big conglomerates finally take total control over the Internet, which is inevitable without Net Neutrality laws, then the media will be entirely under corporate control and you and I won't be able to sit here and talk about it like we're doing.

Re:If this were a systemic Problem,

[Attila Dimedici]

Shrink government and you'll magically see the amount of money in elections diminish. I believe it is easier, with less chance of abuse of the system my way than your way. I don't see any way to reduce the amount of money in elections as long as so much of our economy is dependent upon the whims of the government.

Re:If this were a systemic Problem,

[Anonymous Coward]

Problem being, the troll with a legion of sockpuppets makes useful (or at least non-offensive) comments to build/rebuild karma thereby allowing him/here/it to crap all over the forum some more.
People see this and waste mod points trying to do clean the place up. I have no clue why the trolls do what they do and I don't care. The site admins should clean out all the obvious sockpuppets. If you want to leave a troll one account in the interests of free speech, great.

It would not be that hard and the place would have a higher level of discourse.

/2cents

tl;dr version: Trolls will troll. site admins need to clean up.

Re:If this were a systemic Problem,

[Miseph]

Have you ever noticed that everybody agrees there is too much regulation, and yet *without fail and regardless of who is in power* the amount and complexity of regulation always goes up... even especially when moves are made to limit the number of overt restrictions?

The corporations *love* that business is over-regulated, they *love* that the rules are so Byzantine as to require massive legal departments with high-powered attorneys salary, they *love* that this places the barriers to entry for any newcomers so high that such things essentially don't happen. Business doesn't want to compete, because competition cuts into profits, and even worse it creates the potential to actually *fail*. Banking executives can literally run their companies into the ground, threaten bankruptcy, and pay themselves multi-million dollar bonuses with money the government *gives* them simply because everyone knows that if they went under it wouldn't be possible for a smaller competitor to fill the void; all of them with even the remotest possibility of doing so are purchased or driven out by the cost of compliance with rules that don't make sense.

It's the same in virtually every industry, and it's not changing any time soon, because BUSINESS HATES COMPETITION.

Re:If this were a systemic Problem,

[Miseph]

Apple has enough money to hire legions of "customer service reps" who have absolutely no authority to do anything aside from escalate your call to their supervisors... who also have no authority to do anything besides escalate to their supervisors, who in turn have no authority to do anything but escalate it further. Repeat ad nauseam. They require each tier of powerlessness to provide a minimum 40 minutes of stalling prior to escalation, do not share any information between tiers (requiring you to repeat everything at each level... that's an easy 5 minutes each right off the bat), and deliberately understaff both to keep down payrolls and to increase hold times. Eventually it sinks in that nothing will be done, and you might even buy into their premise that it "isn't something we are able to help you with, and you'll need to speak to [some other company] about that particular problem, but we're very sorry for the inconvenience. Is there anything else I can help you with today?"

Keep in mind, of course, that these people protect legitimate (or at least legal) revenue streams as well, and you can see why this is a good investment.

Of course you, Joe Developer, don't have a couple million to blow on an Indian call center, so you're pretty much stuck having to deal with problems rather than waiting out the customer's impatience and frustration.

Re:If this were a systemic Problem,

[PopeRatzo]

The corporations *love* that business is over-regulated, they *love* that the rules are so Byzantine as to require massive legal departments with high-powered attorneys salary, they *love* that this places the barriers to entry for any newcomers so high that such things essentially don't happen.

Yes of course, because since 1980s they have been the ones that actually write the regulatory laws.

The regulations they hate are those prehistoric ones about "anti-trust" or "environmental protection". You know the ones that where they didn't have that much input.
Those were made at a time when Big Business wasn't all that popular, and politicians could make a name by thwarting their will.

There are some good regulations, ones that slipped through the cracks of the lobbyists who are the ones writing all the regulations today (actually writing them. a congressional committee actually has the lobbyists writing the language of the bill, often passing that language verbatim.)

Re:If this were a systemic Problem,

[PopeRatzo]

Shrink government and you'll magically see the amount of money in elections diminish.

Shrink government and you'll magically see the amount of civilization diminish, too. "Size" when talking about government is a very misleading term. It doesn't mean how many people work for government or how many laws are on the books or even the amount of money the government spends. "Size" of government is a construct of people who would really prefer fascism. When you hear someone talking about how government is "too big" and "too inefficient" it's because they'd prefer something a lot more autocratic, usually themselves in power. When you hear regular citizens talking about "size of government" it's usually because they're suckers who listen to those power-hungry politicians and have bought into their BS.

There are places with almost no government. They are not places you would care to be, friend.

Re:If this were a systemic Problem,

[Attila Dimedici]

You are clueless about the people who talk about smaller government. It is people like you who support the advance of fascism in government. You support the expansion of government power. I have seen you post such things repeatedly here. Most people who talk about shrinking the size of government understand that government is inherently inefficient. Those I know who wish to see the size of government reduced are talking about how much money it spends and how many people work for the government and how many laws/regulations are on the books. They are not favoring an autocratic government. Most of them did not like the Patriot Act when it was passed, but recognized that most of the rhetoric about it was from people who actually approved of it (Obama, for example), but were using talking against it as a political weapon to gain power for themselves.

Re:If this were a systemic Problem,

[PopeRatzo]

You are clueless...

Son, that's not a way to talk to people. I'm not sure how you were raised or if you grew up in an abusive family or something, but you'll do better if you engage people in a more reasonable and respectful way.

And if you want to communicate with people, it's better if you do it with something besides demonstrably wrong Fox News talking points. Using bold face on bald face lies does not lend them a ring of truth.

We have tried periods of time in our nation's history where regulation was limited and government was weak. They always ended in bubble economies and financial collapse. Each and every one.

If you graph our history, you will find that whenever tax rates on the the richest and corporations went in aggregate over 50%, our GDP increased and our unemployment fell. Every time they went under 50%, GDP fell and unemployment increased, and a bubble economy resulted. Every single time, absolutely no exceptions. These high-tax periods for the rich also coincide with periods where there were most complaints about "big government" and "inefficient government" in newspapers (I can't use other media because newspapers were the only medium to exist throughout our history).

Government has never been as "inefficient" as what since the 1980s has been referred to as "The Free Market". I'm not joking. The only thing "The Free Market" is efficient in doing is funneling money from the people who work for a living to the people who own for a living. Since I'm pretty certain that you're not among the group that owns for a living, the ideology you have adopted is contrary to your own best interest. That's why your income dropped from 2000 to 2009 along with the rest of people who work for wages. That's why you own less of your house today than you did ten years ago. That's why you're working longer hours for less pay and have fewer options. Yes, you.

Re:If this were a systemic Problem,

[Attila Dimedici]

There is no reason to engage you in a reasonable and respectful way because I have read your posts on here and you have never demonstrated even a passing acquaintance with reality. When I was in college I thought like you do. Then I got out in the real world and learned how things work. Guess what? I work fewer hours for more pay today than I did in 2000. Of course, I recognized that my career was a dead end and changed careers in that time.
You are a fan of increased regulation of campaign finance, despite the fact that every time they have passed a campaign finance law, the problem of money in campaigns has gotten worse. I really would love to know where you get your "facts", they bear no resemblance to the real world. For the record, I have never/b. watched Fox News.

Re:If this were a systemic Problem,

[PopeRatzo]

When I was in college

I'm not sure I believe you. If you'd been to college you'd have learned that the family name was "di Medici" with a small "d" and capital "M". If you're going to try to use historical names humorously, it pays to get the details right.

There is no reason to engage you in a reasonable and respectful way because I have read your posts on here and you have never demonstrated even a passing acquaintance with reality.

So you are only respectful to those who "demonstrate a passing acquaintance with reality"? Is that how you were raised? You might not have to work longer hours for less money if you'd be a little more polite (notwithstanding your protestations to the contrary).

Re:If this were a systemic Problem,

[gknoy]

I guess I'd be less tolerant if I noticed the trolling as much - normally it seems to be moderated down pretty effectively. Can you point me at some of his trolling posts (on other sockpuppets), since presumably that account's post history wouldn't have as many as his older ones?

Re:If this were a systemic Problem,

[Anonymous Coward]

I know YOU are but what am I?

Splendid

[Anonymous Coward]

Thanks Apple!

This ...

[gstoddart]

This is why I have actually turned off in-app purchases.

I don't want it (I'm not willing to buy stuff to make a free game easier/shinier), and I don't trust the developers with direct access to my account. Of course, I haven't given Apple any means of actually billing me -- for pretty much the same reason.

Though, in this case, it seems to be more about people getting into other people's account and doing fraudulent charges.

I just think the whole concept of letting a game have a shortcut to my VISA is a stupid idea. If I really need to purchase something from the iTunes store (and, I have yet to do this), I'll buy a friggin' points card.

Re:This ...

[Anonymous Coward]

I don't trust the developers with direct access to my account.

We just released an app with in-app purchase. You'll be happy to know that we (developers) don't have direct access to your account. Apple handles all the authentication and transaction, and all we (developers) get is a digital receipt of the transaction.

Re:This ...

[gstoddart]

We just released an app with in-app purchase. You'll be happy to know that we (developers) don't have direct access to your account. Apple handles all the authentication and transaction, and all we (developers) get is a digital receipt of the transaction.

Oh, I get that you don't have the account information.

That doesn't mean that I would trust you or any other developer with anything in the game which could attempt to spend my money. For one, I'm not willing to give you any, and two, I don't trust the mechanism.

Any game that wants to pop up a "Click OK to buy in-game" crap, well, I'm not going to buy it, and I don't want to inadvertently click "Yes". My solution is to prevent any app from having the option. It's turned off on the system level.

For the same reason that I don't let any company I deal with have access to my checking account so they can directly take money. I will decide when I give you money, it will likely be on a credit card so I can have control over it, and you don't have the option to decide "now is the time for more money". Any company which insists the only method I have of dealing with them involves that kind of access gets told to PFO -- than includes Pay Pal.

Good luck with your app, but for a lot of us, in-app purchases is a sign that maybe I really don't want your app very much to begin with.

Re:This ...

[LordNimon]

I agree. I've turned off in-app purchases because I just don't trust the mechanism. There's no way for me to know that when I authorize an in-app purchase, that I will actually be paying what I'm supposed to pay, and that I'll get what I'm being sold. Once I type in my password, who knows what really happens?

Re:This ...

[perpenso]

... I don't trust the mechanism. Any game that wants to pop up a "Click OK to buy in-game" crap, well, I'm not going to buy it, and I don't want to inadvertently click "Yes" ...

Actually the mechanism is part of Apple's built-in App Store app. I take it you don't buy things directly from your device, only through your computer? Also you would have to click yes more than once. Once for the game's user interface and then again for the Apple's user interface.

Re:This ...

[Anonymous Coward]

Any game that wants to pop up a "Click OK to buy in-game" crap, well, I'm not going to buy it, and I don't want to inadvertently click "Yes".

You (and the moderators that modded you up) obviously have not tried in-app purchases, and have no clue how it works. Because what you just described certainly isn't how it works.

Re:This ...

[greed]

Well, I don't trust the prompting for account name and password. There's absolutely nothing that confirms, to me, that the prompt is from Apple's code and not the game.

Writing a fake login program was one of the first things we played with back in 1985 in high school.

Re:This ...

[nowen2dot]

For the same reason that I don't let any company I deal with have access to my checking account so they can directly take money. I will decide when I give you money

Me too. Quite some time ago was my first experience with an automatic deduction from my account. My bank even required a form indicating who was authorized and for what amount.

Sounded good to me. Until the price increased and my bank automatically paid the higher than authorized amount. That's when I realized it was nothing more that you have authorized them to debit your account. Stopped that and have never trusted that mechanism again.

Re:This ...

[tyrione]

Ignorance is bliss. Do some research before you vilify.

Re:This ...

[Anonymous Coward]

AFAICT, that form is a waste of time. It isn't required and doesn't protect you (as you found out). Security theater. That's all it is.

Re:This ...

[lgw]

The fun part is that checks now work the same way. Anyone who you right a check to (well, anyone big enough to electronically present checks) can present it for any amount and get paid that amount from your account - the amount on the face of the check is nearly irrelevant. Of course, the court system is likely to be quite unhappy with anyone who robs you this way, but that's long after the fact, and there have been problems with fraudsters. Fun, right? Your check will only be examined by a human if presented for some quite large amount.

Re:This ...

[Bananana]

Are you paranoid or what?

Re:This ...

[bball99]

"I just think the whole concept of letting a game have a shortcut to my VISA is a stupid idea."

and there you have the problem in a nutshell!

mod up +10 points!

Re:This ...

[indiechild]

Retailers are pretty much selling iTunes cards at a discount almost year-round. Every 3-4 weeks there will be a 20% or 25% deal. Stock up, and you never have to pay full price for anything. (And no need to link a credit/debit card of course)

Talk about disappointment

[Shivetya]

Here I was hoping they had made Empire (old strategy game from DOS days) for the iPad/iPhone

Oh well.

That the purchases can be made for this company's product without buying the original product to allow in game purchases does seem odd. If they aren't getting the money then who is?

Re:Talk about disappointment

[dingen]

Here I was hoping they had made Empire (old strategy game from DOS days) for the iPad/iPhone

Come on, this is Slashdot, you don't need to explain what Empire is. Speaking of which, there is at least a remake for Windows XP.

Re:Talk about disappointment

[lgw]

Did you know that that was the game that pushed RMS over the edge and into his obsession with Free Software? When that game came out, they argued that the pre-existing public domain unix empire game (which was far better, multiplayer, etc) violated their copyright, and won. I don't even remember what the dispute was any longer, but that's when RMS discovered that "public domain" was no kind of protection at all and some new kind of license was needed to keep software free. This all used to be in his "GNU Manifesto" rant.

Re:Talk about disappointment

[geminidomino]

I thought the story was about closed-source printer drivers?

Motivation?

[Froggie]

What seems to be missing here is any sort of motive. Both the game developer and Apple should be worried - running down a competitor's reputation is a fairly poor motive for this, getting refunds doesn't seem to be it, so why are they picking on this app and why are spending other people's money with no hope of retrieving it?

Re:Motivation?

[Anonymous Coward]

What seems to be missing here is any sort of motive. Both the game developer and Apple should be worried - running down a competitor's reputation is a fairly poor motive for this, getting refunds doesn't seem to be it, so why are they picking on this app and why are spending other people's money with no hope of retrieving it?

Looks like most of the Empire Online in-app stuff is buying in-game currency. In other words, this is just another bunch of Chinese gold farmers, who likely purchase the currency then offload it to other compromised accounts.

Re:Motivation?

[increment1]

The motive is financial.

Steps:
1. Compromise account.
2. Buy in game goods with compromised account's Visa, gift cards, or (perhaps) fraudulently generated gift cards.
3. Sell in game goods for real currency.

The reason this particular developer is getting hit the hardest is probably because their game is the current best way to realize profits from a compromised account. For many other apps with in app purchases, it is probably difficult to convert your purchase back into money.

Re:Motivation?

[Froggie]

Mum? Is that you?

Re:Motivation?

[Froggie]

Exchanging incompletely authorised credit for fungible goods is like cashing a cheque - you're buying the rights to a debt from a known bad debtor at full face value.

Some day in the distant future the internet will learn this.

Re:Motivation?

[Bananana]

The developer has a motive - now you heard it's name and it's on-line game's.

Re:Motivation?

[Froggie]

But this isn't a pseudonym, it's my real name. And I'm fairly sure your Dad wasn't called Mr Kristopeit402.

They don't need to care

[Grapplebeam]

With their 80% market share.

Re:They don't need to care

[Anonymous Coward]

BOO-YAH!

Re:They don't need to care

[geekoid]

80% based on what?

Re:They don't need to care

[Anonymous Coward]

Facts

Re:They don't need to care

[praxis]

https://secure.wikimedia.org/wikipedia/en/wiki/Smartphone -- Refer to the market share graph based on Gartner data.

You state "facts", but provide no data to support the 80% figure.

Re:They don't need to care

[Anonymous Coward]

80% based on what?

80% of the iOS app market, I assume. +/-20% was probably left off.

Re:They don't need to care

[Anonymous Coward]

Yeah they have an 80% share of all the retards who don't know how to use a computer. The other 20%? They bought ipads. Case and point again.

Re:They don't need to care

[Anonymous Coward]

Huh. Then why is it 95% of the world isn't running that Mac garbage? I hate all these Apple fanbois. What makes a Mac superior in any way? They are overpriced, overrated, expensive to fix, and yes.. they DO get viruses. Iphone users can suck a dick too with their Apple controlled marketplace. Open markets ftw. /rant

Re:They don't need to care

[jo_ham]

Slashdot's continual wailing that Apple need to face antitrust charges. That means they must have a monopoly, right?

Re:They don't need to care

[Anonymous Coward]

http://www.knowyourmobile.com/smartphones/smartphoneapps/News/781397/android_market_grows_a_staggering_8615_per_cent.html

It will come as no surprise to hear Apple dominates the world of apps, not just in terms of support but also in revenue. $1.7 billion dollars were generated in 2010, and the App Store now accounts for 82.7 per cent of the market.

Malware targeting users with iTunes accts?

[HowIsMyDriving?]

It seems that most of the complaints for compromised iTunes accounts come from areas with high rates of piracy or malware infections. I wonder how much this of this comes from keyloggers or Trojans in pirated software / questionable web sites. It may be that there are app developers that work with malware developers who target iTunes accts because it may go un-noticed longer than blatant credit card or identity theft.

Wrong, hope you aren't spreading panic.

[saboosh]

Developers do not have access to your visa, regardless of how you pay for content in iOS. All iOS purchases, whether they be appstore or in-app, are payed to Apple, period, end of story. Apple, then, takes care of distributing the payment. Apple mediates everything. The developer is cut a check from Apple after they take a cut, even for in-app purchases.

As someone whose account was cleaned out by Lakoo

[Anonymous Coward]

I'm glad they're admitting how much of a problem fraud through their apps are. I had my gift card balance cleaned out by Lakoo in-app purchases without even downloading the app in question. I still don't know how my account was compromised, though it might have been related to a bricked iPod I got rid of; if it became usable again, it would've had my account details on there. I wasn't phished, and I had a reasonably strong password.

Re:Lies, and lies and lies!

[Anonymous Coward]

You would have an amazing career in politics with your ability to spin BS from thin air.

interesting counter point...

[Anonymous Coward]

100% of in-app content buys are fraud, which means that the customers are less dishonest than the developers. Smurfberries, anyone? First hit is free.

Re:interesting counter point...

[KDR_11k]

Some games use IAPs instead of having two versions (a demo and a full) on the store to give a free trial and then allow people to buy the full version.

I threw a dollar at Solomon's Graveyard since it's a great game and the game itself cost only 1$ while getting regular free upgrades so it was more a matter of supporting the developer.

This sounds fishy

[Anonymous Coward]

With such a high fraud rate, I can't help but assume that it's the software vendor's own little scam and they're just trying to play dumb & innocent. Maybe they have a disgruntled employee on their hands.

As a developer using in app purchase ...

[perpenso]

Good luck with your app, but for a lot of us, in-app purchases is a sign that maybe I really don't want your app very much to begin with.

As a developer using in app purchase I am honestly interested in what you would suggest.

I offer a technical product rather than a game. A single app that combines the functionality of various traditional handheld calculators, scientific, statistics, business, hex, etc. Perpenso Calc. Rather than have a single high priced app that probably included functionality a particular user would not care about I decided to have a modestly priced app that offered basic built-in functionality -- scientific, rpn, fractions, complex numbers, ... -- but was expandable using in app purchases. This allowed a person to pick and pay for only the additional functionality -- statistics, business and hex -- that they cared for. I suppose another option would have been to offer several medium priced apps, one each for statistics, business or hex but what if a person was interest in more than one? They would need multiple apps, that would be more costly. Also more inconvenient if they needed to move data from one calculator to the other.

In your opinion am I missing something? What alternatives would you suggest? Thanks in advance. Seriously, I am curious.

Re:As a developer using in app purchase ...

[Anonymous Coward]

It sounds like you are one of the (IMO, very few) developers using in-app purchase in a way that many of us here on /. appreciate... allowing people a variety of options at a variety of price points. Most of the time that I've been made aware of in-app purchase it's been apps that "give" you something for free and try to make money on the back end.. which is a perfectly valid business tactic, but I expect results in the sort of software that "we don't want anyway".

Re:As a developer using in app purchase ...

[wampus]

Not sure how familiar you are with the Android market, but it's pretty common to see add-on modules for apps there. Put a link in the app that hits the module's market item directly or just supply a link with a market search term that is designed to hit your modules.

Re:As a developer using in app purchase ...

[Draek]

Dunno if you can do such a thing on the Apple store (I do think they had a prohibition on apps that depends on other apps), but one alternative would be to create a system of "plugins" that give owners of the original app the extended functionality, and make each plugin available individually on the Apple store, much like Steam does for videogames' DLC. That way you'd leverage Apple's own system to handle payment and such, avoiding the need to handle that inside your own app.

Re:As a developer using in app purchase ...

[Anonymous Coward]

I'm not sure but I'm guessing the GP was referring to in app purchases of virtual fish for your tank, pretend guns for your game, and other digital bits of fluffery that ask for your money and give you nothing of value in return...

|Click here to purchase the temporary feeling of having a larger e-penis|

Re:As a developer using in app purchase ...

[Anonymous Coward]

"That way you'd leverage Apple's own system to handle payment and such, avoiding the need to handle that inside your own app."

That's exactly how in-app purchases work now. The only difference in what you describe is that the available items would be sold separately in the app store (which, btw, makes less sense to me than making it available in the applicable app. YMMV).

Disclaimer: this post typed up on an iPhone by a user who has bought plenty of stuff through in-app purchases.

Re:As a developer using in app purchase ...

[Anonymous Coward]

That is an excellent response to his post and I hope he responds. Personally, I like the choice you made. Now I'll probably go and look for it to see if it meets any needs I have – just because of your level-headed and professional response.

Again, I hope that the poster responds, because (not being a developer) I'm curious to hear what kind of solution he thinks there should be to solve the problem you've outlined.

in app purchases are bad

[Anonymous Coward]

If apple was serious about standing for end users, they would get rid of in App purchases all together. A much better system is allowing returns within a certain time frame, say 30-60 minutes. This would allow users to try out all the apps that do similar things, and select the best one, not the cheapest. I believe this would help support better pricing for well written apps as well. The downside is the extra work on Apple's server farm, but worth every penny.

Each in app purchase must be approved by Apple

[perpenso]

Well, I don't trust the prompting for account name and password. There's absolutely nothing that confirms, to me, that the prompt is from Apple's code and not the game.

Well there is the fact that the Apple review process requires that each in app purchase item be individually submitted by the developer and approved by Apple before it can be made available to users. That helps a bit.

Re:Each in app purchase must be approved by Apple

[Hadlock]

Don't all sorts of apps get repealed due to them having unadvertised features (like being able to run interpeted code i.e. qbasic, etc) all the time, because they were missed during the review process? Or is Apple reviewing both the code and the compiled product now? I suppose Apple's even minimal review process is helpful to some degree, but there's large enough holes that it could (and is) easily be circumvented, it seems.

Re:Each in app purchase must be approved by Apple

[Anonymous Coward]

if (date() > March 31st, 2001 or internet_activation_code_pretending_to_be_advertisement() == 1) {
      display_fake_credentials_login(0
} else {
      process_normally()
}

Doesn't take a rocket scientist to realize that this is really hard to detect in a executable binary. A mere crash test / UI test would not detect this. Even an API test would not detect this (well, if the function names weren't so obvious).

It even happens to the savy

[Anonymous Coward]

Just three weeks ago I had $120 in charges in the space of 6 minutes, Had I not heard my iphone going off from the constant emails and woken up I don't know how much higher it would have gotten.

iTunes did refund my account although it took 3 weeks for the money to get back on my card. Also the iTunes store has NO Phone support so all transactions and interactions are completed over email and it takes an average of 24 hours for a response so the dealings between myself and paypal, myself and visa, and myself and itunes were VERY slow going. The only way I was able to get it back from paypal was to submit fraudulent charge reports to paypal who then contacted iTunes for me. Even after the iTunes store took 3 weeks to get me a full refund.

Re:It even happens to the savy

[bball99]

and therein lies the problem...

i had a series of small, fraudulent charges on a MasterCard account a year ago (during Xmas season); a couple clicks on-line and the charges were refunded by my bank

but having to through iTunes (read similar to 'Paypal') means being at the mercy of a middle party

i will NEVER use this type of purchase mechanism

Me too!

[gizmonty]

This happened to me just last week. I received an email to say I had AUD$23.99 deducted from my iTunes balance (provided by iTunes cards purchased at 25% off so really only AUD $17.9925!) from this exact in app purchase. Needless to say I checked my account immediately and confirmed this. My credit card details were registered with iTunes but they had been mysteriously deleted. I changed my password and contacted Apple with low expectations. I was contacted by Apple within 24 hours stating that they had reversed the transaction! My account was also frozen and I had to go through a (fairly simple) reactivation process. The email/password combo I used was my 'doesn't matter' standard generic login that I use in a lot of places (not email or banking or anywhere that matters). I thought that iTunes didn't matter as I figured the worst that could happen is someone buys me some music with my own money. I hadn't considered the dodgy app developer siphoning money through apps. I don't see how this can't be caused by someone at Lakoo. If an in-app purchase is made from their app surely the only place the money goes is 30% Apple and 70% Lakoo. I can't understand why Apple doesn't just shut them down. I suspect my email/password combo was harvested from some forum or similar that I innocently signed up for. The lesson here is use a unique password for iTunes. Anyway kudos to Apple for refunding this fraudulent transaction but grrrr for not shutting this down earlier. (It's been happening for almost 6 months!)

YES DEFINITELY

[the stapler]

A few weeks ago my wife had her iTunes account hacked and about $60 worth of credits charged 'in game' through this game we had never heard of nor downloaded. iTunes support was slow to respond. Fortunately, we did not (and will not) have a credit card associated with our account. Oh, and the jerk downloaded one of our Soup episodes. I blame Apple and the developers that design a game to have such high priced in-game downloads.

Re:YES DEFINITELY

[jo_ham]

I blame your wife for having a shitty password.

Seriously, if this was anything other than "apple" we'd all be talking about account security issues.

If your Apple ID is compromised then you either a) had an easy to guess password, b) logged into it on a computer with a keylogger installed, c) gave your password to someone you thought you could trust or d) sorcery - Apple products are magic after all.

Strong password that you don't share with anyone and up-to date security on any system you log in on = no problems.

I call moo

[Adam Appel]

As an active apple/iTunes purchaser and one of others I know. No one I know or have any connection to has heard of this happening. Oh, and how is a compromised iTunes account and buying apps any way helpful or useful? (no really, are the apps DRMed as the music? Can you swap and share apps?)

Re:I call moo

[tlhIngan]

As an active apple/iTunes purchaser and one of others I know. No one I know or have any connection to has heard of this happening. Oh, and how is a compromised iTunes account and buying apps any way helpful or useful? (no really, are the apps DRMed as the music? Can you swap and share apps?)

First of all, they compromise your iTunes account, which can be done either by keyloggers, or just using the same old email/password combination that they got by compromising another site.

The reason they do this is in the hopes the account has money in it or a linked card. They then buy certain apps in order to push the ranking of the app higher (especially with the ebooks) in the hopes others will buy those same apps.

Another reason is shady devs trying to make a quick buy by buying their app multiple times using dozens of accounts - basically a way to make some money 70% of price at a time. They often then go and put in high-priced in-app purchases so they don't have to keep getting new accounts - just make the new purchases and get easily $70 per "purchase" or more.

The last reason is why this dev is complaining - a simple way to purchase some fungible item in-app, pass that item to some big player who then sells it for real money. Basically gold farming except instead of manually doing some quest, it's get iTunes account, purchase a virtual item via in-app purchases, transfer that item to a master character who represents the farmer.

Don't worry Anrdoid owners - it's coming to Android soon as well. It could be something as simple as clickfraud given most android apps are free.

Clean Money

[Zadaz]

Sounds like a great way to launder money from compromised accounts.

Re:Clean Money

[Anonymous Coward]

Sounds like a great way to launder money from compromised accounts.

Apparently you don't know a whole lot about laundering money then.

So what is the story?

[thsths]

I do not really understand the story, or specifically why the blame should be pointing exclusively to Apple.

So 40% of purchases are fraudulent and therefore reversed. That seems like a high figure, but who is the victim, and who is responsible?

I honestly cannot see a game company being the victim - in game purchases cost them nothing, so fraudulent purchases are only a problem if they replace real purchases, and I cannot see that happening (unless there is a black market for in game items?). Maybe the reason fraud is so frequent is that the in game purchases are so expensive that nobody in their right mind would spend their own money on it? I wonder what the game companies are doing to discourage fraud? Looking at the stories, some may even be perps...

Apple has a problem, but first and foremost they are the victim here (together with the user). Maybe they should invest more in technology to prevent this - running the code themselves to acknowledge a transaction, for example. Obviously they cannot just trust the game companies... or maybe they just have to communicate better.

Re:So what is the story?

[Anonymous Coward]

Bull.

From what I see, the entire payment system goes through APL. EVERYTHING goes through them. Hell, they even yanked the "I am rich" application because they thought it was too expensive, so that throws your idea that it's too expensive out the window. I also don't see why companies have to set prices according to fraud; that'd be like letting the terrorists (fraudsters) win. =P

Asides from that, the application itself sees nothing but a subscriber number, and an "payment ok" from the mothership. They can't narrow down stolen cards to specific region because they don't have access to subscriber information, etc. etc.

APL is not a victim. They decided to *FORCE* developers to go through their payment system, leaving no other option. This means they they decided to take on the responsibilities of being a payment gateway and assume responsibility for handling cases of fraud. If the developer CHOSE to go with a specific payment gateway, then maybe I'd say yeah... both are victims. As of right now, the developer cannot switch providers to on that cares more about fraud and therefore APL must be held accountable for their lax attitudes.

Capitalizing Game Maker...

[DaVince21]

...made me think they meant the creators of the game creation tool Game Maker. Gotta watch out how you use capitalization.

Previously reported

[Kevin Fishburne]

I submitted this story a while back: http://slashdot.org/submission/1478650/Apple-profits-from-rampant-piracy-in-the-App-Store but it never made it to the front page.