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CNET News Video: Apple to refund unauthorized in-app purchases

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CNET News Video: Apple to refund unauthorized in-app purchases

1:56 /

It's welcome news for parents with app-happy kids. Apple agrees to comply with a Federal Trade Commission order requiring the tech company to issue at least $32.5 million in reimbursements for in-app purchases made by kids without parental consent.

-If you have a smartphone or tablet, then you've encountered what's called an in-app purchase. -Everyone expects an app to be free. And so, developers are left trying to make money within the apps themselves by selling things like, you know, leveling up with any game, extra coins, extra power. -While many kids' games in the Apple app store are free, parents can end up paying a lot more for in-app purchases, especially when kids buy things without their consent. Now, in a settlement with the Federal Trade Commission, Apple has agreed to provide full refunds to parents whose kids made unauthorized purchases. Apple will pay out at least $32.5 million. According to the FTC, Apple has received tens of thousands of complaints, including one from a parent whose daughter spent $2,600 in the app, Tap Pet Hotel. In a statement, Apple said protecting children has been an app store priority. And that, quote, "today's agreement with the FTC extends our existing refund program for in-app purchases, which may have been made without a parent's permission." In a memo to employees leaked online, Apple CEO, Tim Cook, explained that Apple has already sent e-mails to 28 million app store customers, and plans to reimburse the 37,000 claims received. He said, quote, "The consent decree the FTC proposed does not require us to do anything we weren't already going to do. So, we decided to accept it rather than take on a long and distracting legal fight." Aside from talking to your kids, parents can take steps to prevent in-app purchases. -If you check your settings, you make sure you turn off in-app purchases or that you have to authorize them. Or you can just make sure that you never ever tell your kids your password. -Apple must also change its billing practices to make sure it gets expressed informed consent before billing a customer for in-app charges. In San Francisco, I'm Sumi Das, CNET for CBS News.

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