Larry Magid: Apple Agrees To Refund Customers $32.5M Over Purchases By Kids
SAN FRANCISCO (KCBS)— Apple has agreed to refund $32.5 million to customers to settle a case with the federal government over mobile apps.
Apple actually settled this in a class action settlement a couple of years ago. Basically what happened was kids were getting a hold of adults' or parent's smartphones and downloading apps and making purchases unbeknownst to the adults.
They were getting around the password by using the 15-minute window of convenience. The Federal Trade Commission (FTC) alleged that Apple did not give parents or guardians enough or adequate notice that this 15-minute window existed.
So kids were often times buying things involved in the gaming world like clues, weapons, etc. That's how many app developers, especially free ones make their money.
According to the FTC, Apple needs to do a better job of warning parents about the 15-minute window in between the times they need to re-enter their password.
Apple CEO Tim Cook put out an email to employees claiming that they had already done this and that this was double jeopardy and that the FTC was punishing them for something they had already dealt with.
$32 million isn't much in the greater scheme of things. It all goes to consumers unless the demand isn't there than in which case the balance goes to the government.
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