In-app purchases can rack up a bill quickly

By Russ Van Arsdale, Executive director, Northeast CONTACT
Posted April 22, 2012, at 1:13 p.m.

“There’s an app for that.”

Several national media outlets reported last week on a software application that will help you locate bears, wolves and bison in our national parks. Rangers are said to be worrying about the safety of both the wildlife and the viewers that this increased attention may bring.

The ability to download “apps,” as they are known, is supposed to give people great flexibility when using an iPad or other handheld computer device; if you need a new piece of software or want to play a new game, download it for a small fee or in many cases for free. But some consumer advocates say the developers of those apps are getting greedy, even though they’re giving the apps away.

It gets a little complicated. The eye-glazing number is $8.4 billion, which is the size of the mobile download market last year. Projections put the figure at more than $40 billion within four years.

The majority of that revenue is not the downloads themselves, but what users buy to get more bang from their downloads as they use them. These are called “in-app purchases.”

Say your youngster is playing a recently downloaded game and wants more whizbangs, a key feature of the game. A couple of clicks later, the sale is complete, charged to the credit card that paid for the original download (or an earlier in-app purchase).

A Michigan woman didn’t realize this was happening until her child ran up a $720 bill in less than an hour; the next day, another $420 in 20 minutes. Several frantic calls to the vendor resulted in the woman’s account being credited for the expenditures; if it happens again, she likely won’t be so lucky.

Many in-app purchases must be authorized; the user usually enters a self-generated password before being allowed to complete the buy. However, some app developers waive that requirement in cases where apps were purchased just minutes before. In the words of one former game show host, “then things can really change.”

Sellers of these apps are upfront about the fact that in-app purchases cost money, but those warnings are virtually always buried in the fine print. And it’s not just younger users who run up large charges in the heat of virtual battle; adults can get caught up as well.

Apple has eliminated a 15-minute window from the time an in-app purchase is made when the account is left unlocked so the user could make another purchase without re-entering the password.

That wasn’t enough for one Pennsylvania dad, whose daughter went overboard on virtual goods for her “Smurfs’ Village” app. He has filed a class action lawsuit charging Apple with providing “bait apps” to lure children to overspend; Apple says, if parents don’t want their kids making the purchases, they shouldn’t give them their iTunes passwords.

Consumers can take some steps to protect themselves:

• Turn off the device’s ability to make in-app purchases in the Settings section.

• Keep your password secret. Make sure your device is updated to avoid the 15-minute unprotected window.

• Give a gift card to your trustworthy child. A debit card with a preset limit just makes sense.

If you get stuck with a bill, contact the developer of the app directly; some of them will waive charges on a one-time basis. Find these and other useful tips at commonsensemedia.org.

Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit necontact.wordpress.com or email contacexdir@live.com.

http://bangordailynews.com/2012/04/22/business/in-app-purchases-can-rack-up-a-bill-quickly/ printed on September 16, 2014