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Coins & Stars & Acorns

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kid playing a game on a deviceOver the past few years parents have pulling the hair out when their kids rack up unauthorized purchases of virtual “coins,” “stars,” and “acorns,” while playing a downloaded game. Some kids have racked up more than $300 in unauthorized charges while children who could not read were able to just click a lot of buttons at random and incur a boatload of unauthorized charges.

Kids’ games often encourage children to acquire virtual items in ways that blur the lines between what costs virtual currency and what costs real money. In the app “Ice Age Village,” for example, children can use “coins” and “acorns” to buy items in the game without a real-money charge. However, they can also purchase additional “coins” and “acorns” using real money on a screen that is visually similar to the one that has no real-money charge. The largest quantity purchase available in the app would cost $99.99.

Amazon has been under fire since 2011 for facilitating these in-app unauthorized charges. The online giant has tried several times to refine its system but only recently plugged the holes. The Federal Trade Commission (FTC) has taken on Amazon to issue refunds to consumers for the unauthorized charges and permanently ban the company from billing parents and other account holders for in-app charges without their consent.

According to the FTC, when Amazon introduced in-app charges to the Amazon Appstore in November 2011, there were no password requirements of any kind on in-app charges, including in kids’ games and other apps that appeal to children. According to the FTC this left parents to foot the bill for charges they didn’t authorize.

In March 2012 Amazon updated its in-app charge system to require an account owner to enter a password only for individual in-app charges over $20. However, the FTC says Amazon continued to allow children to make an unlimited number of individual purchases of less than $20 without a parent’s approval.

In early 2013, Amazon updated its in-app charge process to require password entry for some charges in a way that functioned differently in different contexts. According to the FTC, even when a parent was prompted for a password to authorize a single in-app charge made by a child, that single authorization often opened an undisclosed window of 15 minutes to an hour during which the child could then make unlimited charges without further authorization.

Not until June 2014, roughly two and a half years after the problem first surfaced and only shortly before the FTC started its lawsuit process against Amazon, did Amazon change its in-app charge framework to obtain account holders’ informed consent for in-app charges on its newer mobile devices.

BEST ADVICE: Avoid giving a kid passwords to your online app store. Make sure if a purchase is made by your kid you sign-out of the online app store promptly. Never leave a toddler unattended with a device that has an open app store.

If your were victimized by prior unauthorized kiddie charges contact the FTC with your supporting documents such as credit card statements or online app store purchase history.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357).kid playing a game on a device

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