It's easy to understand a parent handing over their smartphone or tablet to their young one for entertainment or distraction. However, problems could arise if the child knowingly, or unknowingly presses the purchase button. Many applications include supplemental purchases that are offered to improve the app experience or advance to new levels, which range from $.99 to $100. These virtual items can easily turn into hundreds of dollars if the child sits there pressing it over and over. Should in-app purchases be final and non-refundable, even if made mistakenly?

The FTC is currently filing a lawsuit against online retailing giant Amazon, demanding refunds to parents who have been billed for unauthorized in-app purchases. The lawsuit comes after Amazon resisted the FTC's request to “tighten its policies for purchases made by children while using mobile applications”. The purchases have totaled millions of dollars, and have been made by children without the consent of a parent. Amazon began allowing in-app purchases since 2011, without requiring a password for a purchase. In 2012, the company began requiring passwords for purchases over $20. In 2013, complaints piled up, so it updated password protection again, but allowed windows of time where purchases could be made without re-entering passwords. Amazon changed its policy again this past June, employing “effective” holder's consent, as well as real-time notices for all purchases on its latest model devices. However, the FTC believes the unauthorized charges, which began in 2011, violated the FTC Act.

The FTC asks that Amazon follow a similar app store model of Apple, who the FTC was also recently in court with. Apple was required to increase security policies, such as password requests, ending in a $32.5 million settlement back in January. The FTC says in-app purchases are “final and non-refundable” by Amazon, who keeps 30% of the misled transactions. In a letter earlier this month, Amazon stated that it wouldn't “willingly accept tighter controls”. Due to Amazon's disposition, the FTC has increased its demands. In addition to a fine, it asks Amazon maintains stricter bookkeeping and disclosure over the next 20 years.