Apple will refund $32.5m to customers

Apple has agreed to cough up a minimum of $32.5 million in refunds to US customers who faced huge bills when their children made in-app purchases without permission.

The complaint was brought forward by the Federal Trade Commission (FTC). It alleged that Apple failed to notify customers that when they entered a password to approve a single in-app purchase, the login details remained active for 15 minutes allowing children to continue racking up an unlimited amount of charges.

Many children's games in the App Store offer in-app purchases to unlock additional functionality and charges range from as little as 99 cents up to $99.

As part of the settlement, Apple will change its billing procedures to make sure it has the express permission of the bill payer before an in-app purchase is authorised.

"This settlement is a victory for consumers harmed by Apple's unfair billing, and a signal to the business community: whether you're doing business in the mobile arena or the mall down the street, fundamental consumer protections apply," said FTC chairwoman Edith Ramirez.

"You cannot charge consumers for purchases they did not authorise."

In an internal memo to employees Apple CEO Tim Cook stated he wants to draw a line under the issue so the firm is not embroiled in a long legal battle.

"It doesn't feel right for the FTC to sue over a case that had already been settled. To us, it smacked of double jeopardy," Cook said in an internal memo.

"However, the consent decree the FTC proposed does not require us to do anything we weren't already going to do, so we decided to accept it rather than take on a long and distracting legal fight."

In the UK, a six year old named Will Smith ran up a 2,000 bill on his grandfather's iPad when he bought virtual food and coins in a game called Tiny Monsters. The situation was explained to Apple, and a full refund was awarded.