Password window allowed additional purchases beyond first one

Apple has agreed to settle a lawsuit filed by parents whose children may or may not have had access to their iTunes passwords and racked up unauthorized charges -- sometimes in the hundreds of dollars -- by buying in-game currencies through in-app purchases. The company will issue $5 iTunes credits in most cases but may be obligated to provide full "refunds" (though it was not the company that collected the money) due to a loophole where an authorized purchase could be followed by an unauthorized one for several minutes afterward without re-asking for the password.

In most case, children making unauthorized in-app purchases had access to the parents' iTunes password -- the parents were simply unaware that many so-called "freemium" games have in-app purchase options that go beyond what the game cost (if anything) initially. Nonetheless, a group of parents sued Apple because of the loophole that allowed the authorized use of a password to remain valid for up to 15 minutes after the initial purchase, allowing for other purchases that could be made without re-entering the password.

Apple will reimburse claimants with a $5 iTunes credit or the equivalent amount in cash, while claims exceeding $30 can apply for a full refund, reports GigaOm. In order to be awarded a claim, users in the suit will have to swear under oath that a minor bought game currency through an in-app purchase without access to the adult's iTunes password.

The company changed its policy on password authorization windows back when it released iOS 4.3. It argued in court that parents have always had the ability to stop children from making in-app purchases through Parental Controls, but this was not enough to persuade the parents or the judge in the case that this amounted to adequate protection.

According to reports, unauthorized charges went up to and well over $300 in some cases. The lawsuit was originally filed in April of 2011, and if the current settlement is approved by the judge in the case, payments will begin sometime late in the year.

by MacNN Staff