Apple to cough up $100m after kids rinse parents' credit cards on apps

Parents whose credit cards took a hammering after their kids went on iTunes spending sprees are in line for some compensation from Apple - in a lawsuit settlement that could cost the fruity biz $100m.

Parents were horrified to receive huge bills from their iTunes accounts for items such as virtual vegetables for iPad games. A number brought a class-action suit against Apple, filed with the Northern District of California Court on 11 April, 2011.

The legal action cited apps aimed at children that are free to download but encourage users to spend money in-game on goods such as fruit, vegetables, ammunition and currency.

In the settlement proposed on Friday - which is to be formally agreed in court on 1 March - Apple agreed to pay a minimum of $5 in compensation to American claimants who can prove that their children bought items on iTunes through in-app games without permission during a particular 45-day period.

And full refunds could be available if parents meet the above requirements and fill in an online claim form.

Apple will also pay the legal bill for the case and promised to send an email notification about the settlement to everyone who made an in-app purchase of Game Currency and would fall into the class affected.

Sums under $30 will be refunded in iTunes credits rather than cash.

At the heart of the case was the 15-minute authorisation window after a user signs into an iTunes account: an Apple ID and password is required for purchases on iTunes-linked credit cards but only for fifteen minutes after one signs in. Kids were able to buy items of value up to $99.99 with just one click during that window. And Apple takes 30 percent of all app sales through iTunes.

Apple has since changed the parental controls on devices allowing users to disable in-app purchases or require a password before every transaction. ®