Manage your monthly mobile costs1:16
David Koch says it's important to know what your data and call limits are.
DEMAND for apps and other online games is booming, bringing with it fresh financial traps for those with busy lifestyles and curious children.
While you may already have heard the horror stories about kids spending hundreds or thousands of dollars on in-app purchases for things such as gems and coins in video games, another potential financial problem is not knowing how much your family spends on this fast-growing form of entertainment.
Australians spent $870 million on mobile games last year, up 24 per cent for the year, according to research group Telsyte and the Interactive Games and Entertainment Association. Another $603 million was spent on digital downloads, up 33 per cent.
Telsyte managing director Foad Fadaghi says about 90 per cent of all spending on apps is now through in-app purchases.
“Our research shows that tablets remain the ultimate childminding device for parents,” he says.
Potential traps include free apps that finish quickly to tempt users to buy the full version, a 15-minute window for password-free buying after an initial purchase is made, and game buttons for in-app purchases designed in a way that allows simple mistakes to cost big bucks.
Parents should avoid giving their passwords to children, and use the settings of their phones and tablets to ensure all purchases require a password.
“It comes down to being very familiar with the tools that allow parents to manage spending,” Fadaghi says.
He says major app stores now have refund policies, and recent court decisions are giving consumers greater power in recovering money.
Heard Financial CEO Nicholas Heard experienced app pain when his son accidentally signed up to an ongoing in-app purchase costing $29.95 a month. After calls to Telstra and emails to the European app developer, he finally got it cancelled — but not before losing about $100.
Heard says it’s important not to give your online ID and passwords to your children. “Make sure your children don’t have access because it’s all pre-loaded on your credit card,” he says.
He agrees with Microsoft research that found three-quarters of parents believe their children know more about these technologies than they do.
Parents need to spend some time understanding the systems and how to manage them. “If the children do want to purchase anything, it gives you control to give the green light. There’s an education process. Tell that if something does pop up, say no — you don’t want to accept it,” Heard says.
Telyste’s Fadaghi says people need to budget for app purchases as part of their total digital entertainment spending.
“Most people don’t keep track of what they’re purchasing on an app, but it all adds up,” he says.
“It’s about setting limits and not just treating it like a few dollars here and there.”
Last month the Federal Court found that a US games company, Valve, had misled Australian consumers with different versions of a refund policy for its Steam platform.
The Australian Competition and Consumer Commission said it was the first time the courts had extended the definition of goods to include computer software.
“Consumer issues in the online marketplace are a priority for the ACCC and we will continue to take appropriate enforcement action to hold businesses accountable,” ACCC chairman Rod Sims says.
Originally published as How to avoid the app trap
