UK Office of Fair Trading investigates child in-app purchases

The U.K. Office of Fair Trading says it is currently investigating companies that offer free applications for children that include in-app purchases.

We've seen the stories. Parents let their children play apps on their tablets, blissfully unaware that such a thing as in-app purchases — where everything from digital coins to unlocking new levels — can be completed, only to have bills demanding thousands of dollars arrive at the end of the month.

Following a series of high-profile cases, for example the story of one young boy who spent £1700 on his father's iPad in less than an hour, tech firm Apple has introduced a warning for parents on iTunes for apps. The warning  makes it abundantly clear whether a free, seemingly harmless app for your child to play does or does not contain in-app purchases.

Ultimately, it is the parent's responsibility to check what their children are doing. However, not every parent understands how an application works, the fact you can turn off in-app purchases in settings, or even that in-app purchases exist. Companies like Apple that are beginning to take notice and adapt accordingly are making a step in the right direction, but when applications exist — aimed at children — that offer £50 virtual items, you have to wonder how many firms are counting on the naivety of parents.

It isn't just Apple or Google that can be held responsible; this is an industry-wide problem. The OFT has now launched an investigation into whether some children are being "unfairly pressured or encouraged" to buy in-app items with their parent's money, unaware that their wish to unlock new levels or features may result in a bill that makes their parents' eyes water.

As part of the investigation, the OFT has written to firms offering such free web or app-based games, asking for information on the marketing side of in-game purchases. In addition, the agency is asking parents to contact it in relation to any example apps or games which they believe mislead parents or children. Game developers and hosts are also encouraged to get in touch if the OFT is going to formulate a strong understanding of such marketing aimed at minors.

Cavendish Elithorn, OFT Senior Director for Goods and Consumer, said:

"We are concerned that children and their parents could be subject to unfair pressure to purchase when they are playing games they thought were free, but which can actually run up substantial costs.

The OFT is not seeking to ban in-game purchases, but the games industry must ensure it is complying with the relevant regulations so that children are protected. We are speaking to the industry and will take enforcement action if necessary."

Under the U.K.'s Consumer Protection (from Unfair Trading) Regulations, established in 2008, if aggressive or misleading advertising is found in child-focused apps, then this kind of "direct exhortation" is unlawful. The OFT says that a number of single purchases of currency or items can range from a few pence to £70 or more, and as use of mobile devices and the Internet among children continues to rise, misleading practices need to be nipped in the bud.