Unauthorised App and In-App Purchases Cost £30.9m A Month – Microsoft

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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Microsoft says children buying apps and making in-app purchases is costing parents

The cost of children using their parents’ smartphones to buy apps and make in-app purchases (IAP) has been estimated at £30.9 million, by research from Microsoft.

The firm asked 2,000 British parents who owned a smartphone or tablet if this had affected them, with 28 percent saying their children had bought an application without permission, and 83 percent of those saying they had suffered “bill shock” as a result.

The average cost to these parents was £34.18, leading Microsoft to suggest the monthly spend on authorised apps and IAP amounts to £30.9 million a month. However, it has been noted that hopefully those affected by bill shock would have taken steps to prevent it from happening again, reducing this number.

In-app purchases survey

Windows_Phone_8_tilesThe survey also revealed parents need to be educated about the pitfalls of their children getting hold of their devices, with 17 percent saying they shared their smartphone or tablet passwords with their children, while 23.5 percent had no such protection at all. It was unclear whether they were referring to their PIN number or the password required for a digital marketplace.

A majority of 77 percent said they believed they needed more help from technology companies with regards to managing their children’s app activities.

During the launch for Windows Phone 8, Microsoft spoke at excruciating length about ‘Kids Corner’, a feature that creates a separate profile for children that only lets them perform smartphone functions approved by their parents. This was backed up by a marketing campaign featuring typical working mums like Holly Willoughby and Jessica Alba.

The Office of Fair Trading is currently investigating whether children are being unfairly pressured or encouraged to pay for additional content in ‘free’ app-based or web-based games.

Some apps such as Zynga’s Farmville and EA’s Real Racing 3 are free to play or install, but offer the chance to unlock more content such as items or in-game currency through in-app-purchases. Currently, 80 of the 100 top-grossing Android applications employ this ‘freemium’ model.

In the last few months, there have been a number of reports claiming children have been purchasing items worth thousands of pounds, unbeknown to their parents, while complaints to PhonePayPlus, the UK regulator of premium rate phone services, have risen by 300 percent.

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