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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."
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.
Information wants to be expensive AND wants to be free. So you have Value vs. Cheap distribution fighting each other.
Like, say, the developers of Lugaru HD?
GLaDOS for President 2016! "Well here we are again. It's always such a pleasure." -- GLaDOS, 2011
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.
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.
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.
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!)
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.