Agreement demands $32.5 million in refunds for in-app purchases made without parents’ OK.

To settle a Federal Trade Commission complaint, Apple will refund consumers for in-app purchase charges made by children without the consent of folks, paying at the least $32.5 million for this reason.

The FTC complaint alleges that Apple violated the FTC Act by failing to produce adequate disclosure for purchases made on iOS devices. Before recent software changes, entering an Apple ID and password to put in an app or make an in-app purchase opened a fifteen-minute window during which subsequent in-app transactions were possible without further authentication.

FTC chairwoman Edith Ramirez characterized Apple’s concession as a win for consumers. “This settlement is a victory for consumers harmed by Apple’s unfair billing, and a signal to the business community: Whether you’re doing business within the mobile arena or the mall down the road, fundamental consumer protections apply,” she said in an announcement.

According to the FTC’s legal filing, Apple has received tens of thousands of complaints from parents since March 2011 about unauthorized in-app purchases. In a couple of cases, these charges reached several hundred or perhaps thousands of bucks.

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While app developers profited from these transactions — some through games cynically designed to encourage spending on virtual goods as opposed to to supply compelling game play — Apple’s oversight of the in-app payment process makes the corporate liable.

Not all the FTC commissioners believe that needs to be the case. Commissioner Joshua Wright issued a dissenting statement, saying that those affected represent a miniscule group of shoppers and that the harm done was minor.

Wright also argues that the FTC won’t second-guess Apple about the right way to design its products or require it to revise a proven business practice.

‘[A]ny injury to consumers flowing from Apple’s number of disclosure and billing practices is outweighed considerably by the advantages to competition and to consumers that flow from an analogous practice,” said Wright in his statement.

Apple CEO Tim Cook, in an email to employees published by re/code, argued that the FTC action was unfair since the company had previously settled a lawsuit over unauthorized in-app purchases.

The FTC intervention “smacked of double jeopardy,” Cook wrote. “However, the consent decree the FTC proposed doesn’t require us to do anything we weren’t already going to do, so we decided to simply accept it instead of tackle an extended and distracting legal fight.”

Cook said that last year Apple sent out 28 million emails to people who had made in-app purchases in games designed for kids and received 37,000 claims. To exhaust its $32.5 million settlement fund, Apple must pay out about $878 per claim. Likelihood is the common claim is far lower. The unspent balance of the fund, if any, would be awarded to the FTC.

Thomas Claburn is editor-at-large for InformationWeek. He have been writing about business and technology since 1996 for publications equivalent to New Architect, PC Computing, InformationWeek, Salon, Wired, and Ziff Davis Smart Business. He’s the writer of a science fiction novel, Reflecting Fires, and his mobile game Blocfall Free is obtainable for iOS, Android, and Kindle Fire.

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