Apple agrees refunds over in-app purchases

Parents whose children made in-app purchases inadvertently will receive a minimum $5 payout from Apple, which has settled a class action lawsuit.

As many as 23 million customers could be in for the payout, costing Apple up to $100 million – although it applies in the US only.

The lawsuit stems from complaints by parents that Apple was stocking titles in its iTunes Store that, while free themselves, charged large amounts for in-app purchases – without requiring that a password be re-entered if the purchase was made within 15 minutes.

Smurf Village was cited as a particularly outrageous example, charging $59 for 1,000 in-app credits. In some cases, children were racking up more than $300 a time.

Apple’s already scrapped the 15-minute window that allwed children to make the purchases without a password. Under the terms of the proposed settlement, reached with the help of mediators, it will now contact the millions of customers who made purchases through one of the apps.

The settlement offers users a $5 credit – or, if they can adequately explain the circumstances in which the purchases were made, a full refund for any charges incurred within 45 days of acquiring the game. Anyone claiming $30 or more can opt for cash instead.

“The proposed settlement eliminates the risks of continued litigation, including the risk of no recovery from Apple. It immediately provides the certainty of valuable benefits to the Class Members,” it reads.

“Most importantly, the proposed settlement provides a recovery to every iTunes account holder who paid for a Qualified Game Currency Charge, if the charge was made without the account holder’s knowledge or consent.”

The settlement still needs to be approved by a judge, but costomers should start getting their payouts late this year or early next.