[Lorric]

Madness! This is basically extortion!

http://www.guardian.co.uk/technology/2013/apr/12/smartphone-games

[The E]

Oh yes, the evil evil app makers are to blame for parents leaving credit card information on devices accessible to minors.

IMHO, the parents are much, much more to blame than the children, or even the producers of these apps. In order to make such a purchase, you need a credit card, and in order to have one, you need to be an adult (or close to it anyway). By not properly securing their devices, those parents enabled their children to make those mistakes.

[Phantom Hoover]

oh look, the classic "exploitative business practices are fine, it's the fault of dumb consumers for not being on their guard" argument comes out of its hole again

[Lorric]

Roll up! Roll up! Get your Smurfberries! Only £69.99!

[The E]

oh look, the classic "exploitative business practices are fine, it's the fault of dumb consumers for not being on their guard" argument comes out of its hole again

The thing is, these business practices aren't that exploitative. Sure, microtransactions etc are not a good thing, but ultimately, it's the parents responsibility to make sure that this **** doesn't happen.
The question here is, where does the app makers' (and the app stores') responsibility to make sure that whoever purchases something is actually the account holder end and the account holders' responsibility to make sure that no unauthorized purchases are being made begin?

[Lorric]

When I initially heard about this on the news, I thought it must be games that have a vast, vast array of DLC. But come on, $99 for Smurfberries?

http://www.escapistmagazine.com/news/view/107662-Eight-Year-Old-Girl-Blows-1400-on-Smurfberries

This is companies trying to score money, through at best immoral business practices. If they were at least selling stuff that some people would actually want to buy, like say 1,000 different costume items at £3 each and someone just took them all and that was where the £3,000 bill came from, at least it would be legit stuff, but this is crazy and just plain wrong, selling Smurfberries for more than a PS3 game. It's a trap, plain and simple.

[The E]

Sure it is.

And it is trivially easy to make sure you do not stumble into it. It's one thing that this form of drug dealing is possible; it's quite another to actually fall for it (or, in this case, not think the consequences of handing your tablet or phone to your kid through) and complain after the fact.

Personally, I am of the opinion that better user education is more desirable than edge-case regulatory practices.

[Lorric]

Sure it is.

And it is trivially easy to make sure you do not stumble into it. It's one thing that this form of drug dealing is possible; it's quite another to actually fall for it (or, in this case, not think the consequences of handing your tablet or phone to your kid through) and complain after the fact.

Personally, I am of the opinion that better user education is more desirable than edge-case regulatory practices.

So do you think the parents should lose the money?

[The E]

Ultimately, yes. They gave their kids what amounts to free access to their bank accounts and then left them alone with a drug dealer. That kind of stupidity needs to have punishment attached to it.

[Lorric]

Ultimately, yes. They gave their kids what amounts to free access to their bank accounts and then left them alone with a drug dealer. That kind of stupidity needs to have punishment attached to it.

I am at a loss for words.

You are cold and hard and unfeeling.

The parents wouldn't be the only ones who would suffer, while the "drug dealer" would grow fat on the money and others would be encouraged to follow in their footsteps.

[Apollo]

Sure it is.

And it is trivially easy to make sure you do not stumble into it. It's one thing that this form of drug dealing is possible; it's quite another to actually fall for it (or, in this case, not think the consequences of handing your tablet or phone to your kid through) and complain after the fact.

Personally, I am of the opinion that better user education is more desirable than edge-case regulatory practices.

So do you think the parents should lose the money?

Ideally, no. But that's a natural consequence of this type of stupidity.

The government does not exist to protect people from bad deals. It would be another matter if this was actual fraud, but it isn't. It's a simple ripoff.

[Fury]

Smartphones have capability to lock their respective stores with a password. Parents should make use of that and not give their credit or debit card information to minors too young to understand value of money. In fact, people should never give credit or debit card information to anyone, including their spouses and children. Granted, not even all adults understand value of money but that's different topic. As far as I know, Visa Electron is the card of choice for minors as it can be granted to as young as 10 years old. But that card is their own and parents can supervise its use and set daily and monthly withdrawal limits.

The bottom line is that parents more often than not, have means to supervise their minors use of money. They should exercise that and not blame outside parties for their own ignorance. While parents should actively seek out means to protect their minors in this brave new electric world, I have to admit that not nearly enough is done to educate parents that such things can happen in the first place and how to prevent them.

That said, there are companies out there that are blatantly exploiting minors and ignorant parents alike. It's not moral, but is is legal. Companies have throughout ages sook to exploit people to gain profit, this is nothing new. Only the means to do so are. Well, relatively new as they have existed since smartphones became popular.

[MP-Ryan]

I might agree with Fury and The E if children (under 18) were not legally banned from making purchases on credit cards / phone accounts, particularly credit cards / phone accounts in their parents' names.

A child cannot consent to an EULA, a child cannot authorize purchases by credit card, and the fact that the software not only allwos credit card information to be stored and tied to the app but does not require a further code entry by default (without enabling it) is ridiculous, exploitative, and quite probably illegal.  Specifically, these stores are storing credit card or account information which any person with physical access to the device can then utilize without impediment.  In fact, these apps are largely relying on the fact that these store systems are not protected by default without very specific client action.

In short:  these microtransactions largely rely on ignorance at the user end to make money, and actively do not prevent credit card fraud - and legally, a child authorizing a transaction on their parents' card is fraud.

So, yeah - the app makers are absolutely at fault and should be made to change these practices immediately.

[General Battuta]

If it's fraud you can presumably just dispute the charge, correct-o? Why are these people paying the charges?

[Lorric]

If it's fraud you can presumably just dispute the charge, correct-o? Why are these people paying the charges?

The ones in the articles I posted have done so.

But anyone who doesn't know they can, or how to is going to get stung.

Thankfully, we're not living in The E's World, where these people should lose the money for the crime of stupidity.

[Aardwolf]

But it's fraud committed by the child, derp

[MP-Ryan]

If it's fraud you can presumably just dispute the charge, correct-o? Why are these people paying the charges?

Excellent question.  If it's a credit card, they should be calling the card company and filing the charges as disputed.  Wireless companies would be trickier as it is in their interest to be paid, so you may have to go to a government regulatory to get those charges dealt with.

Regardless - legally-speaking, only an account holder on credit and wireless accounts can authorize charges to them.  Use by any other party is criminal fraud in Canada, US, UK, Europe.

[MP-Ryan]

But it's fraud committed by the child, derp

Doesn't matter.  They wouldn't be criminally-charged, but children cannot legally agree to contracts, and therefore any expenses arising from a contract engaged in or signed by a child has no force in law, and any charges associated with it are legally invalid.

[MP-Ryan]

Replying to all of it, consumers shouldn't have to deal with this - smartphone software is being developed in a manner that specifically allows, if not tacitly seeks, this type of abuse in order to make money.  While parents have an obligation to protect their information (through security settings they have to manually enable), the app developers have an obligation to ensure the contracts they are offering are legally-valid, a step so absurdly simple the only reason they don't do it is because it makes them less money if kids can't abuse their parents' accounts.

[The E]

I might agree with Fury and The E if children (under 18) were not legally banned from making purchases on credit cards / phone accounts, particularly credit cards / phone accounts in their parents' names.

But here's the thing: The store system cannot determine who is using the device at the time. If the account is logged in and the convenience functions turned on, then the assumption has to be that the account holder is driving. So as far as they're concerned, the entire transcation was perfectly legal. If the transaction is then disputed, how do you determine whether the dispute was legitimate, or whether it is a fraud attempt by the user?

In short:  these microtransactions largely rely on ignorance at the user end to make money, and actively do not prevent credit card fraud - and legally, a child authorizing a transaction on their parents' card is fraud.

I absolutely agree! But here's the thing: As long as these practices aren't forbidden, it falls to the customer to protect himself. If the customer fails to do so and then gets bitten, it's something the customer has to deal with, not the various regulatory agencies.