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Federal Judge Rules Amazon Must Refund Parents Duped By In-App Purchases (gizmodo.com) 129

An anonymous reader shares a Gizmodo report: A federal judge has ruled Amazon is liable for billing unwitting parents after their children made unauthorized charges in apps. The court will decide exactly how much money Amazon owes customers in the coming months. The federal judge's decision asserts that Amazon received several complaints from customers about in-app purchases that they were unaware of, mostly incurred by children. The decision points out that Amazon promoted apps as free but failed to inform parents about in-app charges that could be incurred.
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Federal Judge Rules Amazon Must Refund Parents Duped By In-App Purchases

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  • hmmmm (Score:5, Insightful)

    by ganjadude ( 952775 ) on Wednesday April 27, 2016 @11:11AM (#51997631) Homepage
    maybe dont give your child a tablet with access and a CC linked to it. I mean dont the parents have responsibility for the things they allow their children to do???
    • by Anonymous Coward

      Do you have kids, especially any young but mobile kids? Toddlers like exploring EVERYTHING and LOVE using everything their parents do. This has little to do with parents "giving" their kids tablets with credit cards but more to do with the kids being able to use them easily and being able to grab the ones that do have the credit card accounts stored. There is still no reason application developers shouldn't have a two stage process for purchases approval, even e-mail confirmation before following through wi

      • Re:hmmmm (Score:4, Insightful)

        by ganjadude ( 952775 ) on Wednesday April 27, 2016 @11:23AM (#51997757) Homepage
        so you get your kids a tablet that is not your tablet

        you dont leave your tablet for the kids to get

        no, this is a parenting issue, not an amazon issue
        • Re:hmmmm (Score:5, Informative)

          by Anonymous Coward on Wednesday April 27, 2016 @12:11PM (#51998319)

          There is something you don't understand. I am a victim of this. I purchased a Kindle Fire kids edition for my 5 year old son. You have to have a parents account on the kindle before you can have a child account on it. To purchase applications at amazon, it won't load from google play store, you have to purchase the app from the parent account. You then give access to the app to the child account. But once you have purchased the app from Amazon, the credit card you used to purchase the app is tied to that application. There is no setting to untie the credit card from the application. So when my 5 year old son sees a screen pop up with a button that says "Purchase the in game upgrade" he automatically clicks on the button. There are no settings to prevent that.

          I have had to call Amazon several times and they have refunded my money. But the only way to prevent that from happening is to uninstall the application and to never purchase applications for a child to use. That limits you to only the free apps that can be loaded to the tablet, rendering the Kindle Fire kids edition almost useless.

          Nathan

          • by skywire ( 469351 )

            It's hard not to suspect that your silence on the central question (whether Amazon gave you notice that the apps allowed in-game purchases) means that they did give you notice, and you were thus a victim only of your own carelessness.

            • by Anonymous Coward

              Except for the fact that Amazon does NOT give any notice about in-app purchases to anyone, and secretly ties credit cards to games on child accounts, even on tablets marketed for use by kids.

              • False. First freaking "FREE" app I found [amazon.com] on their site has this silly little link right at the top called "See all Application Permissions". This of course happens to be just below the text "Offers in-app purchases".

          • by sjames ( 1099 )

            THIS!

            It wouldn't be that hard to allow the parents to disallow any credit card charges from the kid's account. It wouldn't be hard to require the parent login to make any charge. The tablet was explicitly marketed as a kid's edition so they couldn't be unaware that children might use it and you can't claim parents were irresponsible by allowing children to use it.

            • You're right. It would be easy to do that.

              So easy, in fact, that it's already been done.

              Amazon even put instructions for disabling in-app purchases [amazon.com] on their web site for those users who have never bothered to explore what's in the settings menu on the tablet.

              What isn't easy is making people take time to look at a manual before complaining about missing features.

              • Re:hmmmm (Score:4, Insightful)

                by sjames ( 1099 ) on Wednesday April 27, 2016 @01:18PM (#51998959) Homepage Journal

                Was that there before or after the plaintiffs incurred the unwanted charges?

              • by Anonymous Coward

                Or making this the default configuration for secondary accounts. Personally I think that if the default for a child account is to have access to payment methods then it's intentionally designed to grab money from unsuspecting users. The system should be blocking purchases and each attempted purchase could generate a notification / email to the parent account with an easy link to the screen that can approve the purchase, set up limits or durations.

              • Here is a rough investigation I did...

                First, you need to read the court document from TFA -- https://www.ftc.gov/system/fil... [ftc.gov] -- and you would find out that the issue occurred in or around 2012.

                quotes from the document

                Amazon has received many complaints from adults who were surprised to find themselves charged for in-app purchases made by children

                In March 2012, Amazon introduced a password prompt feature for in-app charges of $20 or more. (...) This initial step did not include charges below $20 or charges that, in combination, exceeded $20.

                In August 2012, the FTC notified Amazon that it was investigating its in-app billing practices. ...

                In October 2012, Amazon released software entitled Kindle FreeTime, which allowed parents to control tablet usage by children in a variety of ways. ...

                In May 2013, Amazon added a password requirement for all first-time in-app purchases on Kindle Fire tablets. ...

                In June 2013, Amazon changed the configuration of the AppStore so that the words “In-App Purchasing” would appear on an app’s description page:

                To date, Kindle devices of the “First Generation,” for which software updates are no longer available, enable customers to make in-app purchases of $1 or less without authorization via entry of a password.

                That said, when was the link you posted was up for the search? Would any parents need to search BEFORE they give a Kindle to their kids? If they need to, what make them think they need to? Not everyone has the same level of thought to predict what will happen in the future, so they need to find a way to prevent the

              • by Bob_Who ( 926234 )

                What isn't easy is making people take time to look at a manual before complaining about missing features.

                And Amazon knows this. That's why we have judges.

                Social engineering and "gotchas" are a sleazy way to make a profit.

                Amazon has lost most of my business because a judge is required to make them stop it.

                They don't care if they rip you off, that's what all of the fine print is trying to justify.

          • So when my 5 year old son sees a screen pop up with a button that says "Purchase the in game upgrade" he automatically clicks on the button. There are no settings to prevent that.

            You're wrong. There are settings specifically meant to prevent that.

            There's a setting that disables in-app purchases [amazon.com] and you can use parental controls to prevent purchases without entering a password if you don't want to disable them entirely.

          • by jabuzz ( 182671 )

            I call bull shit on that. Both my nieces have Kindle Fires as do I and you just set them up an Amazon account with *NO* attached credit card. Put parent protection on the device so no purchases can be made with out parental consent. If you do want to make a purchase then you just load the childs Amazon account up with a gift voucher. You could also allow in app purchases if you want, because they are limited to what has been preloaded into their account.

            You then give the Kindle Fire or Fire tablet as they l

        • by Anonymous Coward

          Parents are just individual little fish swimming around trying to keep their tiny lives in order. Working 60 hour weeks and occasionally trying to spend quality time with their family. A corporation is a massive entity that that weilds a tonne of power and plots and plans its money making and culture influencing moves like a game of chess that most folks are too busy to even know they are playing. Everyone is responsible.

        • No,it's security issue. If even toddlers can steal money so easily then imagine what a proper real criminal could do.
      • Re:hmmmm (Score:4, Insightful)

        by BitZtream ( 692029 ) on Wednesday April 27, 2016 @11:24AM (#51997767)

        Do you have kids, especially any young but mobile kids?

        Of course not, he wouldn't have made such retarded statements if he had any experience with either kids or the way amazon does their tablets.

        He's just talking out his ass about things he doesn't know anything about.

        • Re: (Score:1, Informative)

          by ganjadude ( 952775 )
          except for you have no idea of my situation in the slightest. I have a 3 year old and a 7 year old around. Both have android tablets, both have no payment setup on them

          just because you cant seem to grasp the concept of parental responsibility doesnt mean the rest of us are, as you said, retarded
          • Re: (Score:2, Insightful)

            by Anonymous Coward

            Regardless Amazon facilitated the minimization of all payment notice when devices were purchased, and obfuscated both the process of and need for removal of payment information. It is a customer relations failure, and business law is largely developed on that basis. Amazon was greedy and it caught up with them. Now they will give notice in bright red and orange letters rather than in tiny writing resembling the old illegible disclaimers on tv commercials.

            • precious snowflake convinces their parents to allow them to purchase *just this one things this one time* and then the parents forget to relock the account; or when some precious snowflake with more savvy than their parents uses the parents password to purchase stuff.

              It's *always* someone else's fault.

          • by Anonymous Coward

            It is not society's responsibility to protect things of no benefit to society.

            For a company to make money out of parental technological ignorance or children's sneakiness is not of benefit to society, so there is no justification for society's enforcer - the government - to condone it.

            Suck it up, buttercup. Humans don't exist to serve others.

      • by Anonymous Coward

        If instead parents complained that their toddler wasted a few dollars by emptying a milk carton on the floor, would you also attack the milk carton company, claiming that they should design a 2-stage process for milk pouring, involving an e-mail confirmation?

        • The danger of having a milk carton dumped on the floor is obvious, and there are clear ways to try to avoid it (toddlers are very good at getting to places their parents didn't think possible, so I'm using the word "try"). The danger of having a child make an in-app purchase was not obvious (particularly a few years ago), and apparently there was no clear way to avoid it.

      • this is why you set your accounts to ALWAYS ask for a password
      • Android app permission requirements are clearly stated. Among these are "in-app" purchases where applicable. While I personally haven't used Amazon's alternative app-store. I'd be willing to wager there's a "require password for purchases" setting just as there is on the Google app-store.
    • My kids' tablets have AppLock [google.com] installed on it. This locks out features that I don't want them to have access to such as the Google Play and Amazon app stores. If they want a new app installed, they need to give it to me so I can type in the PIN and install it. Could they guess the PIN and get in? Sure, but it's another level of protection against "kid playing game, gets prompt, clicks 'yes', and incurs $$$ in-app purchase charge."

      • Installed AppLock. It took me one reboot and 5 seconds to get around the software completely without entering a single pin.
        • Interesting. How did you get around it? In my tests, it ran on device startup so rebooting the device didn't present a vulnerability.

          • Immediately on reboot go to Settings - Application Manager - Installed Apps and delete AppLock. You could probably just Force Stop it, but I used delete. You do have to be quick though. I tested a few more times and sometimes I beat AppLock starting and sometimes I don't get it disabled in time.
            • Thanks. Given that my boys are 8 and 12, it sounds like AppLock will still be good enough protection on their tablets. (The bigger issue will be if they guess my PIN - they've tried and failed miserably.)

    • Re:hmmmm (Score:5, Informative)

      by BitZtream ( 692029 ) on Wednesday April 27, 2016 @11:22AM (#51997747)

      When you buy an Amazon Fire device it comes linked to your Amazon account unless you specifically tell it not to when buying it by unchecking the tiny checkbox with small print next to it somewhere in the checkout process ... that option ISN'T EVEN AN OPTION ON PRIME NOW PURCHASES. So in all cases, by default, the table comes linked to your CC, and in some cases, you can't even tell it not to be.

      I.E. By default, a new Amazon fire tablet ... like ... the kids version for $79 that I bought the other day directly from amazon ... comes already linked to the credit cards on my amazon account and I had to specifically go add an account to the device and restrict it from being able to purchase.

      I've purchased the cheapo fire 7" for myself and the kids version for my son so this is from recent direct personal experience that I say this.

      Amazon is a shitty company who uses every social engineering trick in the book to rip you off and you let them.

      What they've done is as bullshit and they are right to have all of that money torn away from them and should have 3-4x ripped away from them on top as punishment.

      • Amazon is a shitty company who uses every social engineering trick in the book to rip you off and you let them.

        Yet, you bought two of their tablets to support them.

      • by LWATCDR ( 28044 )

        I guess I just find it convenient. I do not have kids and have never been 'tricked" by Amazon. Amazon really needs to find a way to prevent the kids buying everything issue. Maybe a way to keep remove the ability to buy from some logons or devices. Amazon could create child accounts for parents to give to their kids and then set limits on how much they can spend a day/week/month and or a limit to how expensive of a purchase they can make at any one time.

      • so they should be punished because you made a decision to give your kids something that you already know can be abused????

        also if you hate them so much why didnt you get a different brand??? again, you made a decision
      • by MikeKD ( 549924 )
        Way to ruin the GP's smug sense of superiority.
      • Did someone *make* you buy the Fire? Or (as you imply) did you buy it because it was good and cheap? Why not buy an ipad, if Amazon is so evil?

        TANSTAAFL
        How do you think they justify the cost of that subsidized electronic device that they sold to you?

        Seriously: you make your choices based on your priorities. Don't blame the fisherman if you're too stupid to see the hook sticking in the bait.

      • Yet knowing this you never bothered to configured the account password on the tablets?
      • I.E. By default, a new Amazon fire tablet ... like ... the kids version for $79 that I bought the other day directly from amazon ... comes already linked to the credit cards on my amazon account and I had to specifically go add an account to the device and restrict it from being able to purchase.

        It gets worse. There are various settings available on different places on devices -- the "1-click ordering" setting, the "do you need a password setting to purchase at all" setting, the "in-apps purchase" setting, etc. All of these seem buried under different menus.

        And whenever you buy a new device, they ALWAYS default to ON, even if you've previously disabled them repeatedly. Moreover, you often need to enter your Amazon account password, not a tablet password, just to disable them. (...which is a p

        • If you crushed an Amazon exec's balls in a vice grips, I'll bet he'd admit it was core to their business model in closed-room, no minutes meetings.

    • Re: (Score:2, Insightful)

      Yes, parents have such responsibility, and these days you can set a parental lock on devices as well (at least on iPhones / iPads, not sure about others). But the ruling indicates that the warning about in-app purchases was not sufficiently prominent (or even present at all), leading parents to believe that their children were playing completely free games thus requiring no unlinking of CC info or parental supervision, where in fact there was a potential (hidden) charge. Without knowing the details of the
      • by Anonymous Coward

        The judge, who did have the details, thought the plaintiffs had a point.

    • Re:hmmmm (Score:4, Insightful)

      by Solandri ( 704621 ) on Wednesday April 27, 2016 @11:38AM (#51997917)
      Amazon requires their app be installed on the device and you to be logged in for any apps purchased from their store to run. Or at least they did when I played around with their store a few years ago (back when they were giving away a free app every day). I just created extra Amazon accounts and bought kids apps that way with rebate credit cards (so they couldn't be used to make more charges after the money was gone). But I expect most parents didn't think that through as much as I did.

      Normally an app store will add parental controls which allow you to add a password or passcode to confirm purchases. But Amazon's big thing is one-click ordering, and they like to enable it by default. I had to dig through my settings to find where to disable one-click ordering. I want to see a confirmation page, I want to double-check to make sure the correct credit card is being charged, I want to pick and choose the type of shipping especially since they're now giving free digital credits if I don't need a purchase delivered within 2 days. And most importantly, I don't want the kids to be able to buy stuff on my Amazon account by just clicking things when I happen to step away from the computer for a few minutes because the doorbell rang. Even then, their one-click ordering still bites me now and then. I accidentally "bought" an episode of a TV show when my browser froze. Apparently one of my clicks to try to unfreeze it landed on their one-click order button and went through, and apparently the setting to disable one-click ordering for regular Amazon purchases does not apply to digital purchases - there is a separate setting for that. (They refunded it because the entire series was included with my Prime account, so there was no reason for me to buy a single episode. Not sure what would've happened if that wasn't the case, since their policy is no refunds on digital purchases.)

      So yeah, I completely blame Amazon for this one. They are way too aggressive with one-click ordering.
    • I'd say if the kids click on it, and it bills the parents... sounds like the kids just signed up for paper delivery route, lawn mowing, or whatever may instill a little more maturity. Sure the kids may not have known better, but what better way to teach a useful life lesson, not a punishment, just a way to learn how the real world works.

    • Quit living in the fifties, man.

    • I think a lot of complaints of this nature tend to boil down to the fact that parents think entering their CC is for a single purchase, but they failed to understand the features relating to autofill for CC numbers and how to control those settings.

      In addition people seem to never leverage the ability of devices to have multiple user accounts. You can more easily keep CC numbers associated with the parents' accounts and not the kids, and put restriction on the kids' accounts. Not sure the exact capabilities

    • There is a shared responsibility here, and Amazon has failed on its side (apparently). With Android, in app purchases require a password. Assuming the parent has not allowed the password to fall into his child's hands, an in-app purchase cannot be made.

      Since it appears that Amazon doesn't have even that basic level of security, I would put 100% of the liability on Amazon. If Amazon were to have password protection for in-app purchases, I would put 100% of the liability on the parent.

      But a vending allowin

    • It is bad security, period, to allow a purchase without authenticating the user.

      These apps were built insecurely in order to be "convenient", which is almost always a stupid decision.

      I'm glad they got sued and lost. Now everyone will implement in-app purchases the right way because there is a legal precedent.

    • I mean dont the parents have responsibility for the things they allow their children to do???

      They have some responsibility of course. A huge part of society is defining what responsibility should fall to the individual and what part to society. If they were in NYC for instance, "rampaging bear" is something that they are not expected to handle, other than by avoiding it and calling the authorities.

      So, do we want to live in a world where "free app" is not necessarily free? Cause there's no a priori benef

    • by Anonymous Coward

      Problem is the USA has shitty consumer laws that allows for misrepresenting the REAL costs.

      For example Hotels, its always $X per night, then is smaller print +Taxes and Resort fees etc . This can sometimes double the real cost of Hotels.
      Buying stuff in stores, again the "marked price" and what you actually pay is different because its + taxes and sometime not just one tax either.
      Restaurants, well it's + tips
      etc etc etc etc

      Other countries I have travelled to, what you see advertised is what you pay. No hidde

  • I see nothing but good coming from this. Less of a proliferation of games that need you to continuously buy stuff to play. We have laws against advertising to children here, but this is exactly what these apps do.
  • Well if the systems needs a password to install free apps / you need a CC to get account to download free stuff that needs to change.

    There needs to be a way that free stuff does not need a password and or a way to set a buy pin that is only needed to buy stuff.

    15 min free range needs to only kick in for buying mode and not kick in on password for free app and then let's you buy for 15 min with out password.

    Also force no CC needed for free accounts.

    Apple failed on all 3 parts.

    Now in the past some cable syste

  • by wardrich86 ( 4092007 ) on Wednesday April 27, 2016 @11:31AM (#51997859)
    The worst part of the whole thing is that there is no way to lock down IAPs with Amazon. You can restrict purchases from the Amazon app store, but if you have a credit card saved to your account, kids have free reign over IAPs - and some app developers take full advantage of this by tossing catalogues of other apps (which you can purchase) right inside their other apps. My son spent about $10 on some of the shittiest apps I've ever seen because of this. I called Amazon at the time and their solution was simply for me to remove the card from my account.
    • The real problem seems to be parental controls are not turned on by default. Turning them on means kids will be required to enter a password for IAP.

      http://www.amazon.com/gp/help/customer/display.html?nodeId=201357720

    • Personally I'd be suspicious of such a thing. I mean just think of all the expense supporting customer complaints from parents whose kids made purchases. I'd think to my self "maybe I should make sure that's the case [bfy.tw]."
      • I'm not 100% sure when this was added, but my event happened 2 or so years back. I asked the girl I was speaking to if there was any way to lock IAPs out and she said there wasn't. It's possible that maybe she didn't know at the time. Anyway, appreciate the info - another user pointed it out as well.
      • Amazon presumably would get more customer complaints with deceptive purchasing, but lots of customers wouldn't call in for a $2 in-app purchase. If Amazon had a policy for pretty much automatic refunds on complaint, they'd still likely make money, particularly if the wait on the phone was over a minute.

  • There is a place that exists outside of the walls that confine both children and many Slashdoters, it's often refereed to as the outdoors. Despite the rumors and unverified reports, it is usually a safe place filled with wonders and opportunities. It has the useful side effect of creating real, lasting memories, and providing physical exercise. Perhaps utilizing this foreign environment would be advantageous, providing the end user with a hyper-real non-virtual world, allowing for greater physical and menta

    • So this wouldn't be a problem with your theoretical child-rearing practices? How nice.

      • I'm not sure I understand what you are asking, but the point of my comment was to make the observation that in my opinion as a parent, some children are introduced and hooked on digital devices far sooner than they are ready for. This is not a good thing.

        All one has to do is look around at this upcoming generation to see kids addicted to phones like crack - cutting themselves off from real face to face interactions, physical exercise, and learning social skills. A child raised at a greater distance from tec

        • Sure. I think we can agree that there are times when they can be allowed to use tech. There were times when I had the kid, and needed to pay attention to something else for a while. In those cases, I'd try to set him in advance up with something to do while waiting, and that could be my iPhone. Do you think this is reasonable now and then?

          Any time a child is using a tablet or smartphone for entertainment and is not under direct immediate supervision, the child is vulnerable to deceptive techniques li

          • Yes, I think that is reasonable now and then. Also agreed, that an unsupervised child using a tablet or smartphone is asking for trouble. A parent must judge when their child is responsible enough to be allowed less direct supervision.

            • Allowing a child to use a locked-down device without direct supervision is reasonable. The problem comes when it isn't locked down as much as you think it is, which is where the deception comes in.

  • Presumably Amazon only keeps a moderate fraction of the money, the rest going to the publisher. Will this ruling require the people who actually asked for and benefited the most from the money to give it back?

    • I assume Amazon will have to refund 100% of the money they processed. If they want to retrieve 70% of that from the publisher, that's a totally different action.

      Although, "we got this money through apparently legitimate transactions because of systemic flaws in your security architecture, shining tower of e-commerce" is a lot better defense than "you sold me a tablet that came pre-programmed with my CC number, and I didn't realize it."

  • by swb ( 14022 ) on Wednesday April 27, 2016 @03:26PM (#51999901)

    I wonder if their revenue models account for accidental purchases? Purchases that get made unintentionally because their system is deliberately designed to generate purchases extremely easily, even if the account holder wouldn't otherwise make them in a considered way.

    It's hard not to think that both one-click and in-app purchases, especially for games oriented at children, are intentionally designed to generate revenue from purchases that the account holder would not make if they had more consideration.

    I guess maybe 10% of it might be useful convenience, but the rest, especially in-app just seems to be opaque about real costs.

    I wish I could take a job for $5 an hour and then show up and offer "in-employment upgrades" where I would charge other, unknown-until-purchased fees for doing actual tasks.

    "Oh, you want me to show up at 8:30? I offer an AM arrival 5-day pack for $399 per week, otherwise it's $99 per day. And I offer a Stay until 5 PM 5-day pack for the same prices for the AM pack. You can buy the Combo All Day pack for $789 per week. I also offer this in annual subscriptions, $40,000 per year. Buy for five years and it's $195,000."

  • ...it is time to give up all your toys until you are mature enough to use them. And, as for you, Big Biz, it is time for you to stop all of your prying!

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