Google will refund consumers a minimum of $19 million in order to settle a Federal Trade Commission complaint against them, which states that the company has unfairly billed users for in-app microtransactions made by children.
Google also agreed to modify its billing practices to make sure that it “obtains express, informed consent before charging for micro transactions.” Unauthorized in-app charges made by children are one of the main reasons for refund requests, referred to as either “friendly fraud” or “family fraud”. At the moment, Google will refer any refund requests directly to the app developer.
The FTC has stated that Google has been violating the FTC Act’s prohibition since 2011 for unfair commercial practices in regards to billing consumers whose children were the ones to make the transaction, without asking for a password requirement or any form of account holder authorization. The complaint states that consumers have reported up to hundreds of dollars of unauthorized charges.
The pop-up box Google introduced in 2012 asked for the account holder’s password before any form of billing went ahead; however, the box didn’t display any form of charge before payment. It also didn’t inform the consumer that once the password is entered, a 30-minute window opens up, allowing for unauthorized purchases.
The court order states that Google is required to inform consumers who have made in-app purchases about the refund process within 15 days of it being finalized. If they fail to refund the $19 million in 12 months, the remainder of the money must be paid to the Commission to either refund customers or to be given to the U.S. Treasury.
In a prepared statement, FTC Chairwoman Edith Ramirez said, “For millions of American families, smartphones and tablets have become a part of their daily lives. As more Americans embrace mobile technology, it’s vital to remind companies that time-tested consumer protections still apply, including that consumers should not be charged for purchases they did not authorize.”