Apple to hand out $100 million in iTunes credits to settle lawsuit

Apple has agreed to hand out more than $100 million in iTunes store credits to settle a lawsuit alleging that its iPhone and iPad apps allowed children to make purchases without their parent’s knowledge or consent.

The lawsuit, which was filed by five parents two years ago, alleged that Apple did not create parental controls to keep children from buying extra features sold within a video games app. The parents who filed the lawsuit said they didn’t realize their children were charging their accounts until they were billed. Some of the games were designed for children as young as 4 years old.

“Apple failed to adequately disclose that third-party game apps, largely available for free and rated as containing content suitable for children, contained the ability to make in-app purchases,� the lawsuit alleged, according to a report by Reuters.

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In the settlement, Apple agreed to give $5 of iTunes store credit to about 23 million affected customers. Apple will also pay cash refunds to customers seeking $30 or more from the company, according to the Associated Press.

In March 2011, Apple added more stringent controls to prevent children from making in-app purchases so easily.

Before the settlement is finalized, it will have to receive court approval. A hearing for the proposed settlement will take place Friday, according to the Reuters report.

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