Apple lawsuit over kids' app bills nears settlement

Parents whose children racked up bills on their parents' credit cards by buying "Smurfberries" and other virtual money inside iPhone or iPad games such as Smurf's Village without their parents' knowledge would be able to claim an iTunes credit under the proposed settlement of a class-action lawsuit against Apple.

The settlement proposed by lawyers for the parents who launched the lawsuit offers parents either:

• A $5 iTunes credit.
• An iTunes credit for the amount their kids spent on unauthorized in-app purchases over a 45-day period.

In order to qualify for the credit, parents must not have already received a refund.

The settlement is "unopposed" by Apple, but must be approved by a district court in San Jose, Calif., that is scheduled to hear it on March 1.

The lawsuit was launched in April 2011 by Garen Geguerian, a Phoenixville, Penn., father of two girls, who were 12 and nine at the time. The nine-year-old incurred a bill of about $200 over several weeks buying items such as zombie toxin, gems, and city cash, which act as virtual currency in free apps such as Zombie Café, Treasure Story and City Story.

Four other parents joined the lawsuit over the next month.

The lawsuit alleged that the games are designed to be highly addictive and to "encourage minors to purchase game currency, if the game is to be played with any success."

Early in 2011, after parents complained and the U.S. Federal Trade Commission said it would launch an investigation into Apple's sales practices, Apple started requiring a password to be entered for all individual in-app purchases and started displaying warnings that free games could offer in-app content for sale.

However, prior to that, purchases could be made without a password for 15 minutes after an initial password was entered.