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Ken Magill

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Stupid Government Watch: FTC is Parenting for Us

7/15/14
 
By Ken Magill
 
If I’d have known I could abdicate my parental responsibilities to the Federal Trade Commission, I’d have done so long ago.
 
About a year ago, the wife got a call from her credit card company warning her of suspicious charges on her account, about $145 worth.
 
“No I did not make those charges,” she said after the rep detailed them for her.
 
The rep promptly credited her the $145 and that was that, or so we thought.
 
Somehow, the wife figured out later someone in the family did make those charges, our son. He had been making in-app gaming purchases on the wife’s smart phone without our knowledge.
 
“You mean while he was playing with your phone, he was banging up charges?” I asked the wife.
 
“Yep,” said the wife.
 
“Did you think you would not get caught?” I asked our son.
 
Silence.
 
“I don’t know what pisses me off more,” I said. “The fact that you charged money to your mother’s account without her permission—which is stealing, by the way—or the fact that you were stupid enough to think we wouldn’t find out.”
 
His punishment was the usual: a verbal dressing down and no video games for a week. And that seemingly was enough. He now asks permission whenever he wants to buy a download of any kind and the purchase comes out of his allowance, which he earns by cleaning a kitty litter that houses crap from three cats and Swiffering the floor.
 
Apparently, similar scenarios have been taking place nationally. 
 
The FTC last week announced it is suing Amazon.com for allegedly billing parents millions of dollars for unauthorized in-app purchases their kids made.
 
Apparently, the wife and I aren’t the only ones who were stupid enough to keep our kid occupied with a smart phone when we want to have a peaceful dinner without making sure safeguards against unauthorized purchases were in place.
 
According to the FTC, when Amazon first introduced its Appstore in 2011, there were no password requirements in place even for kids’ games.
 
Then in March, 2012, after getting a bunch of complaints, Amazon started requiring passwords for app purchases of more than $20. People still apparently complained.
 
According to the FTC: “in early 2013, Amazon updated its in-app charge process to require password entry for some charges in a way that functioned differently in different contexts. [E]ven when a parent was prompted for a password to authorize a single in-app charge made by a child, that single authorization often opened an undisclosed window of 15 minutes to an hour during which the child could then make unlimited charges without further authorization.”
 
Here’s an idea: Supervise, discipline and course correct your own damn children. Unauthorized credit-card charges made by kids are easy enough to get reversed. Even if Amazon had refused to give refunds—which it didn’t—the credit-card company is a second avenue of remedy.
 
The FTC is suing Amazon over a minor inconvenience that can double as a teachable moment for parents and their kids. It certainly taught the three of us a lesson.
 
Amazon has apparently fixed the problem to the FTC’s liking, but not quickly enough.
 
“Not until June 2014, roughly two and a half years after the problem first surfaced and only shortly before the Commission voted to approve the lawsuit against Amazon, did Amazon change its in-app charge framework to obtain account holders’ informed consent for in-app charges on its newer mobile devices,” the FTC said in a release.
 
So the FTC is suing over a problem that’s been fixed. It’s suing for refunds for everyone affected even though all they had to do was resolve any dispute with Amazon or their credit-card issuer.
 
This is the kind of crap American taxpayers are funding.
 
They’re busting their asses week in and week out so they can pay for a bunch of clowns to conduct show trials.
 
"The FTC should be encouraging innovation in the growing mobile industry, which benefits consumers and competition," said Peggy Hudson, the Direct Marketing Association’s senior vice president of government affairs, in a statement. "Instead, the Commission seems focused on using novel legal theories and scarce enforcement resources to go after America's leading tech companies in court. Amazon reportedly has already done the right thing by enhancing its app market and providing consumer refunds, so consumers have nothing to gain and plenty to lose from the Commission's lawsuit. Nothing will discourage future innovation faster than punishing good deeds."
 
Every word of that statement is true except one: scarce. The FTC’s enforcement resources are clearly not scarce enough.
 
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