Apple details payout process for in-app purchase settlement

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Four months after agreeing to pay out more than $100 million to settle a class action lawsuit filed by parents whose children purchased virtual goods and enhancements sold inside iPhone and iPad applications without permission, Apple (NASDAQ:AAPL) is sending out notices detailing the settlement and deadlines for submitting reimbursement requests.

Per terms of the February settlement, Apple will provide refunds to as many as 23 million U.S. consumers whose children purchased virtual weapons and goods marketed within iOS apps and games. According to the email sent this weekend by Apple's In-App Purchase Litigation Administrator, Apple will award a $5 iTunes Store credit for unauthorized purchases under $30. Parents whose kids spent $30 or more, or those who no longer maintain an active iTunes account, will be entitled to receive a cash payment instead of credit.

"The Claim Form will require you to attest that you: (a) paid for Game Currency charges in Qualified Apps charged to your iTunes account by a minor without your knowledge or permission; (b) did not knowingly enter your iTunes password to authorize any such purchase(s) and did not give your password to the minor to make any such purchase(s); and (c) have not received a refund from Apple for those charges," Apple states.

To claim a settlement benefit, consumers must submit a valid claim form on or before Jan. 13, 2014. "If you do not claim a settlement benefit within this time period, you will lose your right to obtain this benefit," the Apple email notes. "If you don't want to make a claim and you don't want to be legally bound by the settlement, you must postmark your request to exclude yourself by August 30, 2013, or you won't be able to sue, or continue to sue, Apple about the legal claims and allegations in this case. If you exclude yourself, you will not be eligible to receive a payment from this settlement."

The class action suit, filed in 2011 on behalf of Philadelphia-based plaintiff Garen Meguerian and "other parents and guardians who permitted their minor children to download a free application and then incurred charges for game-related voidable purchases that the minor was induced by Apple to make," contends that iOS games like Bakery Story, Tap Zoo and Sundae Maker generated millions of dollars by selling "Game Currency" to children. Calling the freemium model "unlawful exploitation in the extreme," the suit states "These games are highly addictive, designed deliberately so, and tend to compel children playing them to purchase large quantities of Game Currency, amounting to as much as $100 per purchase or more." 

The settlement prompted Apple to add a line of text to freemium download pages in its App Store, alerting users when an iOS title supports in-app purchases. Apple subsequently introduced age-rating notification boxes below each iOS app's developer credits, a move to assuage consumers and watchdog groups calling for greater transparency around the App Store shopping experience.

For more:
- read this 9to5Mac article

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