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Federal Court Allows Class-Action Suit Against Apple Over In-App Purchases
suraj.sun writes "An iPhone-owner whose daughter downloaded $200 worth of 'Zombie Toxin' and 'Gems' through in-app purchases on his iPhone has been allowed to pursue a class action suit against Apple for compensation of up to $5m. Garen Meguerian of Pennsylvania launched the class-action case against Apple in April 2011 after he discovered that his nine-year-old daughter had been draining his credit card account through in-app purchases on 'free' games including Zombie Cafe and Treasure Story. This month, Judge Edward J Davila in San Jose District Federal Court has allowed the case to go to trial, rejecting Apple's claim that the case should be dismissed. Meguerian claimed that Apple was unfairly targeting children by allowing games geared at kids to push them to make purchases. He describes games that are free to play but require purchases of virtual goods to progress as 'bait apps' and says they should not be aimed at children."
You do have to enter a password but it does cache it for a short time. So in theory a parent making a purchase and handing an iOS device to a child could enable the child to make purchases at will for a short time.
In practice, the child most likely had the password. Note that you can also disable in-app purchases in the settings (and protect that setting with a different password).
iOS does give the parent the ability to set up the phone/ipad/ipod to require password every single transaction without wait window. It also provides a way for you to entirely disable the ability to consume In-App Purchases, so you can rest assured the kid is not asking you for the password for anything but the initial app.
Prior to the iOS 4.3 update in March 2011, there was a 15-minute grace period after you entered your password where you didn't have to enter it again. Following some complaints that were similar to this plaintiff's, Apple changed it so that there was an option to make passwords mandatory every time, rather than having a grace period. And if you did choose to keep the grace period enabled, they made it so that your first in-app purchase in that grace period would require you to re-enter the password.
Effectively, this closed the "hole" that the plaintiff's daughter used (well, to be fair, Apple can't fix bad parenting), wherein the parent downloaded an app, entered their password, and the child managed to ring up $200 worth of in-app purchases in 15 minutes or less. The plaintiff here filed suit in April 2011, shortly after the issue came to light in the press and after it had already been fixed by Apple.
And what Apple is accused of doing is "allowing games geared at kids to push them to make purchases." Apple is no common carrier, Apple exercises control over every app sold through its store. And is therefore responsible for the app, including any immoral, unethical or downright illegal inducement of children to enter into financial transactions.
When all you have is a hammer, every problem starts to look like a thumb.
maybe its time to rethink having an iPhone
Best suggestion I've heard so far.
When all you have is a hammer, every problem starts to look like a thumb.
While not entirely without merit, the problem is not so easily dismissed.
Remember back 20 years ago when a company could not say things that were deceptive and/or false without getting in to trouble? Well, welcome to the real world of today where it's normal to take advantage of people.
What really happens on the games is that there is no message of anything except for the game asking for a password. Unless you read page 9374 of the TOS and EULA for the game at download time, you would not know that someone was about to sock your account for anything. The game does not have to tell you that it is going to charge your account. It simply asks for a password.
Companies can tell you that you won something, and when you fill out the form to get the prize they switch your service and charge you money. They could also give you nothing, sell your information to a marketing company for 10c and make sure your text messages eat up your data plan.
Unfortunately, it's a very dirty world we are in. There is a lot of blame to go around.
Should the kid be taught a lesson regarding finance and the dangers of scams and scammers? Sure
but spanked because they got screwed over by an adult that prays on people for a living? Hardly.
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
Well, given that the walled garden has controls that stop someone getting at the tools, and have separate controls that prevent purchases in the first place (parental controls on iOS devices, password to AppleID needed to make purchases in the first place) then I'm not sure what the problem is?
That Apple didn't tell this guy he should have maybe enabled parental controls for in app/any purchases? That maybe he shouldn't have linked his credit card to the Apple ID his kid uses?
How is this different to some guy suing Mastercard because his kid ran up a giant bill during a spending spree if you have authorised him to make purchases on your account with no limit?
As has been pointed out numerous times in other replies, this occurred before Apple added any of that functionality to iOS. At the time this happened, there was a 15 minute grace period after entering your password where it was not required again. There wasn't a way to turn that off. The best you could do was log out of the app store after the app downloaded and installed. That assumed you were aware of the issue in the first place. While you and I are aware of the issue, we are not your typical iPod owner either.
'The tyrant will always find pretext for his tyranny.' - Aesop's Fables
You do realize that you have at least 1-2 years in which to file a suit after you've been injured, so that filing a class action after you discover that you and a bunch of other people were injured is not extortion, but rational and appropriate. Its also far easier to justify a hiring a lawyer to pursue a case where a large number of people have been harmed then to either hire a lawyer to pursue a case worth only $200, or learn how to navigate small claims court on your own.
Also, define "quickly" and "effectively" -- these sorts of games pretty much existed in the app store from the get-go, and IOS 4.3 was released in March 2011. The iPad was released in April 2010, which ignores all the phones that came before it. Shall we google for the first complaints from iPhone users, or is 11 months sufficiently beyond "quickly" for you?
Screw you. I've bought an iPad for a four year old. Four year olds barely understand the concept of "money," much less what an in app purchase is. Fortunately it was an iPad 2, I'd read about the issue, and I configured the thing to always require a password (as well as to disable in app purchases, although frankly that just makes the times that you want to make them far more painful -- 1 password vs. exit, settings, restrictions, pin, switch, double-home, app, password).
You want to reward Apple (gatekeeper/reviewer of all, for a healthy 30%) and software developers like Zynga by freeing them from any responsibility to learn their own lesson and modify their own "get rich quick schemes." The parent and child deserve at least some blame, but the experts (i.e., Apple and developers) were being predatory and quite blameworthy. Is Apple's defense at trial going to be "we couldn't possibly foresee this issue since none of us have children"? Apple is all about the user experience, but does anyone other than an idiot, an addict, or a child buy a $99 consumable immediately after buying a "free" game? I'd love to see a demographic study of what goes on here.
It's irrelevant how much of a technical genius and/or disciplinarian you may be -- the law protects consumers who are average citizens from unconscionable acts, such as where a seller takes advantage of consumers "lack of knowledge, ability, experience, or capacity to a grossly unfair degree." (Use your mad skills to Google the phrase)
First time iPhone/iPad buyers are not going to have the knowledge or experience to know that their purchase password not only is cached to allow other app store purchases, but cached to allow in app purchases as well. First time iPhone/iPad buyers are not going to that there is an option to turn in-app purchases off. You buy an app for your kid, you hand the iPad to the kid to play the app once it's installed. Not 15 minutes later. You buy a free app, you don't expect progress in the app to essentially require you to buy "a basket of coins" for $99.
If people were such geniuses, then the default configuration would be require passwords to be entered immediately, and possibly to delve into the settings to enable in-app purchases. That's the more secure and fail safe configuration, after all. Why is that not the default? Because your average person is not a genius, does not have time to read a user manual, and learns by use and experiance. If they become annoyed, they might look for setting to chang
How is this different to some guy suing Mastercard because his kid ran up a giant bill during a spending spree if you have authorised him to make purchases on your account with no limit?
Because, in this case, it appears he didn't authorize his kid to make such purchases with no limit. As such use was not authorized, it may constitute fraud, and the plaintiff could argue that there are local laws which apply in dealing with the fraud. The fact that Apple has already changed the way authorization is done indicates the plaintiffs may have a case for historical purchases. Also, there are consumer protection laws in many places that expressly prohibit marketing premium rate phone services to children. If California has such laws, and if the plantiffs can convince the court that said laws apply to in-app purchases and that the in-app product was marketed to children, then they have a case.
Many people are going to think that this is black and white, and say that this is solely the parents responsibility, but that is not what the law says. If you trick a parent into extending their credit liability to a child, and then convince the child to transfer ownership of, say, the value of the family house, clearly this is not going to be legal. It is not black and white, you can not use the actions of a minor to unreasonably deprive an adult of their property, even if you have a contract that says you can.
what is wrong with a good spanking on your wife when she is a little brat ?
Jehovah be praised, Oracle was not selected
If Apple (or Disneyland, or anyone else) wants to have a walled garden where you have to play by their rules to get in there, then they have to be liable for what people find there. If you slip on the wet sidewalk at Disneyland that will be totally different than if you do that outside the park. By requiring developers to pass a stringent test and have each app approved, they are explicitly saying they approve of these sorts of apps. In fact, they are even approving that these apps can go in the children's section.
That is why Apple is vulnerable here but Android is not. Android doesn't force developers to do anything special. There is no endorsement, so no liability.
In terms of the settings thing, that is all well and good. But the fact is that Apple is making huge profits from parents who are buying iPods and iPads specifically because Apple has presented their walled garden as a safe place. Remember the famous quote from Steve Jobs to the blogger, saying that Apple is free from crap and if you want porn or viruses, you should go to Android? Well, the chickens have come home.
Any normal standard would find the business practice of these apps unethical anyway. Have you ever "played" one? This is not "my kid purchased a new champion in League of Legend by accident". These apps are specifically designed to be deceptive and manipulative for children.
screwed over by an adult that prays
Come on, Catholic priests have nothing to do with this particular instance of abuse.
Contrary to the popular belief, there indeed is no God.
And if $200 is draining your credit card, maybe its time to rethink having an iPhone.
He said draiing, not maxing out. You can drain a swiming pool with a 1/4" tube. It may take a while, but it's still draining.
--- Keep the choice with the user..
Have you no concept of adults, actual grown skilled professionals scamming children for their pocket, a beating is required but you are utterly wrong about the target.
This is no excuse adults setting out purposely to scam children. Reality here due to the cost of purchases credit card details should be required to be entered every time with emphasis on the amount of money being spent. Not euphemisms, buy bullshit berries with pretend credits (only those pretend credits are really pretend they are direct deductions from your parents credit card and in turn the loss of all your pocket money).
This is sick stuff, professional stealing children's lollipops in real life. It is mind boggling, can you imagine the meetings were psychologists, accounts, coders get togethor to create games to scam the pocket money from ten year olds. Each plotting more enticing, psychological manipulations to get the kids to press the pocket money wiping out button. "Yeah add that, that'll suck in the little rats","Oh Yeah, that'll get the little beggars competing","We need that to feed the little suckers egos so they spend big","We all gonna get rich scamming dumb kids pocket money, what a bunch of suckers, yuck, yuck ".
Seriously wake the fuck up to yourself, "ADULTS SCAMMING CHILDREN'S POCKET MONEY", what the fuck is the matter with you.
Chaos - everything, everywhere, everywhen
It does so... now. It didn't in the past, which is presumably when this occurred.
Search "highest grossing apps" and look for all the "free" apps in the highest grossing category. It's insane. Why would so many people buy free pay-to-play games? I've accidentally loaded some up, and always immediately delete them when I realize what they are. There should be an easy way in settings to ban all in-ap purchases (not a new password, but just flat ban them), or to identify the in-ap enabled games on the ap browser so you'll never accidentally get one because you didn' read all the reviews and release notes (though they seem to be getting better about explicitly identifying them in the description, you could still end up buying based solely on the picture, so it should have "In App Purchase" across the image of the game or something.
Learn to love Alaska
What really happens on the games is that there is no message of anything except for the game asking for a password.
Do you have any proof of this
I don't know how this particular game works (although one of TFA implies it works the way most do) but most games tell you that you are about to spend real money, and they tell you how much you are going to spend.
I'm not sure that Apple is at fault here, and I think the parents need to be careful when giving the password to children. But you can't expect a child to know that when they click on "Bushel of Berries $99.99" to know they are actually spending $99.99 in hard money, and not game money. Especially since a lot of these games have game money you already spend.