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Commission warns Kiwis to watch out for in-app purchases

10 Jul 2014

The Commerce Commission is today reminding consumers about the potential to accidentally make in-app purchases when using applications on their mobile devices.

“With the school holidays in full swing, now is a good time to remind parents to keep an eye on the apps that their children may be downloading,” warns Ritchie Hutton, Commerce Commission Head of Investigations.

“In-app purchases can add up quickly and lead to significant costs.”

Consumer protection organisations overseas have received a large number of complaints about in-app purchases, which has resulted in some positive changes in how mobile platform providers advertise apps.

As a result, many apps now disclose that they contain in-app purchases.

Apps are often free to download but many require in-app purchases to maximise the experience of the app. These purchases may include paying to avoid a delay in gameplay, buying upgrades or buying extra content.

Offering in-app purchases in free to download apps is a very successful revenue making model and has become widespread.

For example, during June 2014, 47 of the 50 ‘Top Grossing’ apps on Apple New Zealand’s iTunes store were free to download.

Consumers, particularly children, may not understand that buying in-game currency and other in-app purchases require the payment of real money.

“In-app purchases are often displayed in ways that have been specifically designed to maximise the chance that a consumer will take up the opportunity to buy," Hutton adds.

"This practice is particularly evident in children’s games where children are often faced with repeated prompts to make a purchase."

Many consumers are also unaware that in some cases, once you enter your password to download an app from the app store, the password stays live for a period of time - this means that if devices are then given to children, they can make subsequent purchases without parental consent.

The good news is that anyone can change the settings on their devices so that the password must be entered every time. There are also ways to restrict the purchase of in-app purchases completely.

The Commission has the following tips for consumers to reduce the risk of running-up unexpected bills on their mobile devices.

1. Check apps for in-app purchases

When downloading an app, especially free ones, check for information on what features the app has, including in-app purchases. This information is usually now made clearer for consumers. Look for the words “Offers in app purchases”.

Apps sold in Apple’s store have lists that set out each individual in-app purchase and the maximum price you can pay for a single in-app purchase. Check reviews of an app online before downloading it, for other users’ experiences and opinions.

2. Change your password settings

Check how long the default time is that your password will remain active on your device once you have entered it. For example, the default settings on some devices have a 15 to 30 minute password window where you don’t need to re-enter your password for additional purchases.

You can remove this password window in your device’s settings. Your settings may change depending on what version of software you have installed on your device so it pays to check when you upgrade your software.

3. You can turn off in-app purchases

Most devices have the ability to stop any in-app purchases. Check your device settings.

4. Check your bill regularly

Check your app store bill regularly so you know what purchases are being made on your account.

5. Don’t share your app store password with anyone, including children

If only you know your app store password, you will know when your credit card is being charged. Just remember to also change the default setting for how long your password remains valid after the first time you enter it.

6. You do have rights

If you do end up in a situation where in-app purchases have been made without your knowledge or permission, you can apply for a refund from your app store provider.

If you come across conduct you believe may be misleading or deceptive under the Fair Trading Act, let the Commerce Commission know by calling 0800 943 600 or visiting www.comcom.govt.nz.

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