5-Year-Old Danny Kitchen Racks Up $2,550 iPad Bill While Playing ‘Zombies vs. Ninja’ Game. Huffington Post.

How often have you handed over your iPod touch, iPhone or other smart phone to your kids to play a game?  Well, we don’t do it anymore.  Not after reading about all of the families hit with huge bills from games that are free, but enable you to make purchase in the app.

The game makers actually found a great loophole,” says Jake Marsh.  Marsh is an iPhone developer. “They can give their games for free and then charge for in game upgrades so you may have a game where you can play it all day every day for free but to experience the game you have to pay for a new shield.”

The Kitchens are not alone in the in game purchase fiasco.  Will Smith, 6, spent £2,000 playing Tiny Monsters app on his grandfather’s iPad.  The family was unaware of little Will’s huge spending spree until his grandmother tried to use the credit card, only to have it declined.

Parents whose children have accidentally run up huge bills playing games on their iPhones could be in line for compensation from Apple. Campaigners are awaiting the result of a U.S. court case in which a group of disgruntled parents are suing the company after their children’s innocent game playing ended up costing a fortune. They accuse Apple of enticing children to spend money on iTunes. If the parents are successful, it could open the door for legal actions worldwide.

The answer to all of this nonsense is Do Not Let Your Kids Play Games on Your Devices!  Even though purchases are password protected, under current rules, after users have entered their password to buy a product, there is a 15-minute window during which they need not supply their password again when making further purchases. It means if a parent downloads an app and then lets their child use that app immediately, the child can make as many in-app purchases as they like for the next 15 minutes before being prompted for the password again.

How to protect yourself against In Application Purchases (IAPs)

• Turn off IAPs on your device and require a passcode (not the device’s passcode) to turn them back on.
• On an iPhone, go to Settings, tap General, then Restrictions, and then set an unlock code. Also, scroll down to the In-App Purchases switch and slide to off.
• Put the device in “airplane” mode, or otherwise turn off internet access.
• Require the account password whenever any purchase is made (be it an IAP or a new app).
• Put your app store account on a gift card instead of linking to a credit card, so any download damage is limited to a specific amount.

Looks like Apple is going to have to pay the piper on this one.  Apple’s settlement over in-app purchasing inches closer to approval and may include 23M refunds.

Apple’s proposed settlement over in-app purchases made by unwitting children was discussed in a court hearing, with counsel for both parties hammering out how the Cupertino Company will dole out refunds. In the settlement, which could see claims from over 23 million iTunes users, Apple is offering plaintiffs $5 iTunes credits, the same amount in cash, or full refunds for claims over $30.

So stay tuned, if you were a victim to IAPs you just might be able to recover something back from Apple.  Be ready to jump through hoops to get your reimbursement.