Posts Tagged ‘ Federal Trade Commission ’

Apple to Pay Back Parents $100M From Kids’ Unauthorized In-App Spending

Wednesday, July 3rd, 2013

Apple is responsible for paying $100 million to parents whose children made unauthorized purchases in game apps, under the terms of a class-action settlement that was originally filed in 2011, according to ABC News.

There have since been multiple stories of children going on buying sprees on their parents’ iPhone and iPad applications where they are purchasing imaginary goods and services offered by some game apps. In one instance, an 8-year-old girl bought $1,400 worth of “Smurfberries” in the Smurf Village game app.

This issue was brought to the attention of the Federal Trade Commission. Parents protested that the children playing these games may not be aware that the virtual coins or tokens used to buy imaginary goods through apps must be paid for by their parents with real money. Apple has since made changes to it’s policy that makes it more difficult for kids to charge their parents’ iTunes accounts without parental consent.

As a result of the settlement, parents may submit a claim through a special “Apple In-App Purchase Litigation” website prior to August 30, 2013. Claims from parents whose children accrued unauthorized charges of $30 or less will result in compensation for the parent in the form of $5 in iTunes Store credit or $5 cash if they no longer have an account. For claims exceeding $30, parents must also submit the date and amount of each purchase. Any U.S. citizen is eligible for compensation if the charge was accrued by a minor acting without the parent’s consent through a qualified app prior to May 2, 2013.

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Internet Privacy Rules Tightened to Protect Young Users

Monday, October 1st, 2012

New rules designed to protect children online are the most comprehensive in more than a decade, regulators from the Federal Trade Commission are saying.  The New York Times reports:

The moves come at a time when major corporations, app developers and data miners appear to be collecting information about the online activities of millions of young Internet users without their parents’ awareness, children’s advocates say. Some sites and apps have also collected details like children’s photographs or locations of mobile devices; the concern is that the information could be used to identify or locate individual children.

These data-gathering practices are legal. But the development has so alarmed officials at the Federal Trade Commission that the agency is moving to overhaul rules that many experts say have not kept pace with the explosive growth of the Web and innovations like mobile apps. New rules are expected within weeks.

“Today, almost every child has a computer in his pocket and it’s that much harder for parents to monitor what their kids are doing online, who they are interacting with, and what information they are sharing,” says Mary K. Engle, associate director of the advertising practices division at the F.T.C. “The concern is that a lot of this may be going on without anybody’s knowledge.”

The proposed changes could greatly increase the need for children’s sites to obtain parental permission for some practices that are now popular — like using cookies to track users’ activities around the Web over time. Marketers argue that the rule should not be changed so extensively, lest it cause companies to reduce their offerings for children.

Image: Child using computer, via Shutterstock


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FTC Accuses “Your Baby Can Read!” of Deceptive Ads

Wednesday, August 29th, 2012

It always seemed too good to be true. And now the Federal Trade Commission has filed a complaint against the man who created the “Your Baby Can Read!” program, accusing him of false and deceptive advertising.

Promoted in infomercials and on the Internet, the program was said to help babies as young as nine months old learn to read with videos, flash cards, and pop-up books.

The FTC filed the complaint against Robert Titzer, the product’s creator, as well as the company, Your Baby Can, and Hugh Penton, Jr., who served as president and chief executive officer of the company until March 2010. Both the company and Penton agreed to settle with the FTC.

The defendants began selling their program to parents and grandparents around January 2008, charging about $200 and taking in more than $185 million, the complaint says. In one infomercial for the product, a two-year-old girl is shown reading from the book “Charlotte’s Web.”

From the Associated Press:

The company, based in Carlsbad, Calif., announced earlier this year that it was going out of business. It cited the high cost of fighting complaints alleging that its ads were false.

Titzer, an educator with a doctorate in human performance from Indiana University, developed the program and appeared in many of the ads promoting the Your Baby Can Read videos and program. He was billed as a “recognized expert in infant learning.”

The FTC says he and the company did studies to back up the claims. But the agency says those studies were flawed.


Image: “Your Baby Can Read!” via The Miami Herald.

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