Apple Refunds $100M For Unwanted In-App Purchases

The bad news keeps on rolling for Apple this week.  

The company’s stock, which was once valued at more than $700 a share, hovers just above $400 this week. To make matters worse, Apple recently lost patent battles to rival Samsung and has angered shareholders with decisions it’s made related to their compensation.

Now, the California-based company has issued a $100 million settlement in a more than two-year-old class action lawsuit, 9 to 5 Mac reports. The agreement entitles claimants to full or partial refunds.

Originally filed by a Pennsylvania man, the lawsuit alleged that Apple engaged in “unlawful exploitation” of minors with its in-app purchases by not alerting parents that their children could use Apple’s login passwords to spend money through games, according to PC Magazine. When several other similar lawsuits emerged, a class action lawsuit was filed.

In one of the most infamous incidents, profiled in The Washington Post, an 8-year-old girl spent $1,400 through an iPhone game called “Smurf’s Village.”

Apple emailed the full legal notice, which was obtained by the source, to all participants this week. As part of the resolution, parents whose children unknowingly racked up charges through in-app purchases will be compensated.

Parents whose children accumulated less than $30 in unwanted bills are to receive a $5 iTunes gift card. Those who have terminated their Apple accounts will be awarded cash refunds of the same value.

Parents whose bills from applicable purchases exceeded $30 and were made within a 45-day period will be given full cash refunds.

Eligible class members are defined as U.S. residents who paid for an in-app purchase without their knowledge or permission. Qualified apps under the terms of the settlement are all games rated 4+, 9+ or 12+ that gave users the option of purchasing game currency. 

Claimants have until August 30 to write to the court to object the settlement; until September, 27 to go to a hearing and speak to the court about the agreement; and until January 13, 2014, to submit a claim form. The release notes that this is the only way claimants can be reimbursed under the settlement.

Apple did not admit that it was at fault in the notice.

“Apple denies all allegations and is entering into this settlement to avoid burdensome and costly litigation,” the legal notice stated. “The settlement is not an admission of wrongdoing.”

Read the company’s full statement here.