Financial literacy

How a Free Game Cost One Man $8000

There has been a lot of coverage recently about the father in Pembroke, Ont., whose teenage son recently racked up nearly $8,000 in Xbox charges playing FIFA soccer games. And he is not alone. Thousands of people get enormous credit card bills every month for games and consoles that feature in-app purchases or charges to play games.

It is common for developers to release games for free that have options to make purchases inside the game to skip difficult levels or purchase special items.

When a bill like this comes in, the first thing that parents do (after they wake up on the floor and calmly ask their children what happened), is they contact the game developer for a little mercy on the obvious misunderstanding.

As you might predict, developers are very reluctant to refund any money, as this is generally their business model.

Credit card companies are equally strict and will require that criminal charges of fraud be pressed against the person who made the purchases. In many situations, this would mean parents pressing charges against their teen, or even preteen children — not an option for most parents.

Some companies like Xbox say there is a setting that restricts minors from making any purchases, but it is often discovered too late for parents to do anything about it.

“Purchases made using a parent’s payment account are legitimate transactions under the Microsoft Services Agreement, and we encourage parents to use the many platform and service features we make available to prevent unapproved charges,” one official statement said.

Some games even use “play” money to purchase items in the game. But when you run out, it automatically starts making charges to your card to continue making these purchases. John Lawford, executive director of the Public Interest Advocacy Centre (PIAC) in Ottawa, said, “Typically, games offer opportunities for players to buy extra levels, features or players — and while sometimes it’s clear you’re paying with real currency, that’s not always the case.”

And no one is immune to the deceptive practices. Jack Black famously complained on the tonight show when his young son spent $3,000 on just one game.

Kanye West also put in his two cents on the issue.

“That makes no sense!!! We give the iPad to our child and every 5 minutes there’s a new purchase!!!”

West went on to tweet.

“If a game is made for a 2-year-old, just allow them to have fun and give the parents a break for Christ sake.”

In the U.S., the Federal Trade Commission sued Amazon, Google and Apple for not protecting kids’ from making in-app purchases. While Apple and Google both settled with the FTC in 2014, and refunded over $50 million between them, the Amazon case is still ongoing.

Consumers can’t always rely on the government to protect them. There are many things that parents, and anyone using a smartphone, can do to protect themselves.

  • Be informed — The first line of defense against these types of charges is to be an informed consumer. Pay attention to the games that your children are playing and learn what sort of in-game purchases they’re able to make.
  • Disable in-app purchases — Mobile app retailers such as iTunes and Google Play generally allow you to disable in-app purchasing in their settings options. Parents can also set up passwords to prevent children from accessing them completely.
  • Pay upfront for games — There are If your children are small, you can look for games that don’t have traps like these. Many times, you are better off looking for a game that costs a small amount up front and does not offer in-app purchases.
  • Monitor your accounts — One easy way to know if purchases are being made is to use a financial tool such as PocketGuard that will inform you of purchases that they happen. This might not prevent the first charge, but it will certainly keep your child from making additional charges that could cost you hundreds or thousands of charges.
  • Ask for a refund — If you do get a hefty bill, make sure you contact the developer or your service provider and ask for a refund. Paula Marner, a mother from Newfoundland, Canada received a $3,000 iTunes bill after her two boys spent the family’s U.K. vacation playing Clash of Clans. She thought it was a fun and free game that they could play while travelling, but the seven-year-old twins were busy making purchases from 99 cents to $99. When Marner complained about her bill, Apple reimbursed her and news sources report that they have done it in a number of other instances as well.

Ken Whitehurst advises that consumers should think about their devices in a different light, “A device capable of making purchases is like a bank card.” “These are powerful devices and people really should focus on understanding the risk that goes with using them.”

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Oleksandr graduated from Dnipro National University of railway transport in Ukraine. At first, he was a customer success manager at PocketGuard and in 1.5 years has been promoted to product manager....

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