Apple settles lawsuit over apps aimed at kids — will pay $5 iTunes credit or cash

Did your kid rack up charges on Apple’s app store without your permission? You may be in luck: the company says it will pay to settle a lawsuit over so-called “bait apps,” which are games that can be downloaded for free but then charge for “game currency” like virtual goods or play money.

Under the terms of the settlement, Apple will offer a $ 5 iTunes credit to those who claims that a minor bought in-game items without their knowledge or permission. If the amount in question is more than $ 5, Apple will offer a credit for that amount. If the amount in question is over $ 30, an Apple user can claim a cash refund.

The proposed settlement comes after parents sued Apple in 2011 upon discovering that their minor children had racked up credit card charges in supposedly free games. The issue was the subject of a Daily Show feature about a father whose kids racked up hundreds of dollars to keep virtual fish alive in a game called “Tap Fish.” The same problem also befell GigaOM’s Kevin Tofel whose kids spent $ 375 – also on virtual fish.

In order to collect under the settlement, Apple users will have to attest that a minor bought “game currency” and that the user did not provide the minor with the Apple password.

The proposed settlement, first reported by Law360 (subscription required), does not state how much Apple will pay in total or how many users are affected. It does state that Apple will send an email notice to “over 23 million iTunes account holders who made a Game Currency purchase in one or more Qualified Apps.”

The settlement still must receive preliminary approval from a federal judge. If that occurs, which it typically does in class action cases, the notification period will begin and Apple will begin accepting claims. After the claims are in, a judge will approve the final settlement and Apple will begin making payments — this would likely occur late this year or in early 2014.

Apple did not immediately reply to an email request for comment.

Apple’s Bait App Settlement by

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