Apple will offer $5 credits for parents victimized by “bait apps”

Parents whose kids blew their money buying virtual goods in "free" apps from Apple's iPad store will be getting refunds in the near future. That is, if a judge approves a settlement recently filed in a class-action lawsuit.

Even if it's approved, the payments won't actually happen until about 2014, according to GigaOm report on the settlement [PDF] earlier today. The settlement allows for a credit or refund for any adult user who had a minor buy "game currency" (virtual goods) via the adult's account without permission.

Under the settlement, any user who had this happen to them can fill out a simple claim form to get a $5 credit from the iTunes store. Alternatively—for those unlucky few whose kids went on real virtual shopping sprees—users can ask for a credit for all unauthorized charges in any 45-day period, if they complete a slightly more detailed claim form. Any user whose damages exceed $30 can ask for a cash refund instead of a credit.

It's possible to ask for refunds even beyond the 45-day period, but an additional explanation will be required about why the unauthorized purchases continued for so long.

So-called "bait apps" are marketed as free apps, but then allow for easy in-app purchases. It's not always clear, especially to kids, that the virtual goods cost real money. And some companies made it suspiciously easy to spend eye-popping sums of money on virtual goods all at once. (Do you really need a button in a child's game that allows for an immediate purchase of $99.99 worth of virtual fish?)

In 2010, GigaOm writer Kevin Tofel wrote about his experience when his daughter caused him to get a bill of $375 for virtual fish. The "bait apps" got more publicity in 2011, when some parents started complaining about massive bills being racked up by their kids. A class-action lawsuit was soon filed. The Daily Show did a stinging segment on the practice, in which it compared the CEO of Gameview Studios, maker of the popular Tap Fish game, to a drug dealer. A Daily Show correspondent also interviewed a father whose young son racked up more than $1,500 buying "virtual goods."