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Apple to settle lawsuit over in-app purchases by children

Kids spending too much money on in-app purchases on iPod, iPhone and iPad apps has lead to Apple settling a lawsuit for $100 million.

The lawsuit came after frustrated parents discovered that, without their permission, their children had racked up massive iTunes bills after downloading free apps only to then get charged to buy virtual currency or items with real money.

According to a report by US tech website GigaOm, as part of the settlement, Apple will offer a $5 iTunes credit or cash if the amount was over $30. Apple will offer a $5 iTunes credit to those who claim that a child bought in-game items without their knowledge or permission. If the amount in question is more than $5, Apple will offer a credit for that amount. If the amount in question is over $30, an Apple user can claim a cash refund.

The lawsuit came after parents sued the iPhone maker in 2011 when those parents found their children had amassed credit card charges for apps they thought were free. Garen Meguerian said his nine-year-old daughter had amassed charges without his knowledge. He claimed she had spent around $200 on toxin, gems and other “game currencies” within apps such as Zombie Café, City Story and Treasure Story.

In order to claim the refunds, parents will have to attest that their child had bought “game currency” and that the user didn’t give the child their Apple ID password.

It is not known how many people were affected by the “bait apps”. It is also unclear if people outside of the US will qualify for any refunds. Since March 2011, Apple has introduce more stringent controls over in-app purchases.

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