Google to begin contacting customers about in-app refunds

The FTC approves a final settlement in its complaint over children's unauthorized in-app purchases

Google will soon begin to contact customers who made in-app purchases on Android devices about potential refunds under a settlement of an unfair billing complaint by the U.S. Federal Trade Commission.

The FTC said Friday that it has given final approval to a settlement of at least US$19 million proposed in September. In its September complaint against Google the FTC accused the company of allowing children to make repeated in-app purchases through apps available on Google's Play store without parental permission.

The $19 million settlement is targeted at Google account holders whose children made unauthorized in-app purchases. Google is responsible for the entire cost of those in-app purchases, according to the settlement.

Under the final settlement, Google is required to begin to contact customers about refunds by late December. The settlement does not cap the amount of refunds Google is required to pay, but if the refund requests total less than $19 million within a year, the company is required to pay the balance to the FTC.

Although the FTC complaint focused on in-app purchases made since 2011, there's no time frame in the settlement covering in-app purchases made through Android apps, meaning customers who made in-app purchases before then can request refunds, an FTC spokesman said. There is, however, a one-year window for customers to request refunds.

The FTC received 16 public comments on the proposed settlement with Google announced in September.

"Thank God I can get a refund now," one person wrote. "They offered the app to my child and unbeknownst to her or myself the difference in app purchases was not explained clearly; I didn't know about the charges until the credit card bill came. My daughter's tablet was on punishment for six months because of this."

Earlier this year, the FTC brought similar complaints against Apple and Amazon.com, and in March, Google customers filed a class-action lawsuit against the company for children's in-app purchases.

In January, Apple agreed to pay at least $32.5 million to customers in a settlement with the FTC. The agency brought a lawsuit against Amazon in July.

Google, in September, said it has changed its in-app purchasing process and was "glad to put this matter behind us."

In its complaint against Google, the FTC alleged that the company violated U.S. law prohibiting unfair commercial practices by billing consumers for charges made within kids' apps downloaded from the Google Play store. Many consumers reported hundreds of dollars of such unauthorized charges, according to the complaint.

After it introduced in-app charges in 2011, Google first billed for purchases without any password requirement or other method to obtain account holder authorization, the FTC said. Children could ring up in-app charges by clicking on pop-up boxes within the apps.

In mid- to late 2012, Google began presenting a pop-up box that asked for the account holder's password before billing in-app charges, the FTC said. But the new pop-up did not contain other information about the charge, and Google did not inform consumers that entering the password opened up a 30-minute window allowing repeated in-app purchases, the agency said.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.

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Tags governmentmobileregulationGooglelegalmobile applicationsU.S. Federal Trade CommissionCivil lawsuits

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Grant Gross

IDG News Service
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