Commission Reminds Consumers to Watch out for In-app Purchases
Published on: 17th Jul 2014
Note -- this news article is more than a year old.
New Zealand's Commerce Commission is 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," said Ritchie Hutton, Commerce Commission Head of Investigations. "In-app purchases can add up quickly and lead to significant costs."
Consumer protection organisations in a number of countries 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.
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. This practice is particularly evident in children's games where children are often faced with repeated prompts to make a purchase," said Mr Hutton.
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.