Apple offers $100m to settle 'bait apps' class action suit

Feb 26, 2013

Computer giant will compensate parents whose children bought 'virtual currency' as they played 'free' games

APPLE has set aside $100 million to compensate millions of parents whose children racked up bills buying "virtual currency" as they used computer games that had been downloaded for free.

Reuters reports the Californian technology giant has agreed to settle a 2011 class action suit brought by five US parents. It was triggered by the case of a nine-year-old girl from Pennsylvania who bought $200 of "virtual currency" as she played three free iOS games, Zombie Cafe, Treasure Story and City Story, that had been downloaded by her father.

Virtual currency is a feature of many computer, tablet and smartphone games and can be used to buy extra features or other advantages. However, players must fork out real money for the extra credits.

The lawsuit alleges that Apple did not do enough to inform parents that the games - which were rated as suitable for children – allowed young players to make "in-App purchases" without re-entering an Apple ID password. "In practice, this meant that a parent could download a free or paid title using their password, then the child (or someone else) could proceed to make purchases without those credentials, as long as it was within a certain time period," explains Cnet.

The lawsuit describes the games – which are sometimes referred to as "bait apps" – as "highly addictive". It says they are designed to "compel" children to buy large quantities of game currency. Apple fixed the password issue with a software upgrade in March, 2011, but not before "some parents were hit with massive bills", says Cnet.

Under the terms of the settlement, Apple has agreed to provide a $5 iTunes credit to as many as 23 million customers whose accounts were charged for in-App purchases. Customers who claim they are out of pocket by $30 or more, may choose to receive a cash refund instead of an iTunes store credit.

The proposed settlement will be considered by a US district court judge on 1 March.

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