News

Google to pay back $19m of in-app purchases made by kids

Search giant settles with FTC over unfair bills to parents

5 Sep 2014

Google is set to pay around $19 million to settle a US Federal Trade Commission (FTC) complaint that it unfairly billed parents for in-app purchases made by their children on Android devices.

The search giant will give a full refund to any parent affected by the problem. It will also change its billing practices to ensure it gets informed consent from Android owners before charging them for items purchased within apps.

"It's vital to remind companies that time-tested consumer protections still apply, including that consumers should not be charged for purchases they did not authorise," said FTC Chairwoman Edith Ramirez.

According to the complaint, in-app purchases made through the Google Play store in 2011 did not require approval. In 2012, changes were made that added a requirement for the account holder's password.

Google also did not inform consumers that entering the password opened up a 30-minute window in which a password was no longer required, allowing children to rack up unlimited charges during that time.

The complaint also highlighted Google's collusion in the matter. An internal email in 2012 from a project manager at Google referred to kids' unauthorised in-app charges as "friendly fraud" and "family fraud".

The complaint further alleges that Google's practice has been to refer consumers seeking refunds first to the app developer.

According to the settlement, Google must let anyone who made an in-app purchase know how to get a refund for unauthorised purchases by children within 15 days of the finalised order.

The FTC has given the firm a year to pay back the $19 million, otherwise the FTC will take the remaining money and distribute it to consumers themselves or to the US Treasury.