Technology giant Apple Inc. (AAPL) has agreed to provide full refunds to consumers, paying at least $32.5 million, to settle a Federal Trade Commission complaint that the company billed consumers for millions of dollars of charges incurred by children in kids' mobile apps without their parents' consent.
As per the settlement with the FTC, Apple also will be required to change its billing practices to ensure that it has obtained express, informed consent from consumers before charging them for items sold inmobile apps.
The FTC's complaint alleges that Apple violated the FTC Act by failing to inform parents that by entering a password they were approving a single in-app purchase and also 15 minutes of additional unlimited purchases their children could make without further action by the parent. Apple offers many kids' apps in its App Store that allow users to incur charges within the apps.
The complaint alleges that Apple does not inform account holders that entering their password will open a 15-minute window in which children can incur unlimited charges with no additional action from the account holder.
The FTC noted that Apple received at least tens of thousands of complaints about unauthorized in-app purchases by children.
FTC Chairwoman Edith Ramirez said, ''This settlement is a victory for consumers harmed by Apple's unfair billing, and a signal to the business community: whether you're doing business in the mobile arena or the mall down the street, fundamental consumer protections apply. You cannot charge consumers for purchases they did not authorize."
AAPL closed up 2 percent on Wednesday at $557.36.
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