Kid’s Unauthorized Use of Credit Cards: Can You Get a Refund?

Sitting their kids down with a phone video game seems harmless for countless parents. What parents may not expect is that many of these games have in-app purchases that are enticing for kids. This type of advertising and game design often leads to kid’s unauthorized use of credit cards. Kids using credit cards correlate with new technology and home devices, such as food delivery apps and smart home systems. Aside from being a stressful situation, many parents face confusing feedback and support from game companies and credit card providers. 

Kid Purchases $1000 On Toys From Amazon 

While many kids may spend a few dollars here and there for in-app purchases, others may use their parent’s credit cards for larger items. In this video, a ring doorbell captures when an Amazon delivery driver shows up at a parent’s door with $1000 of authorized credit card purchases. 

The mother clearly sounds confused after the delivery driver tells the parent about the packages. She explains that her daughter is only nine years old and must have purchased it by mistake. The delivery driver offers her sympathy, but she asserts that it is policy actually to deliver items. 

What would you do in this situation? Is there no way for the parent to return the items? 

FTC Lawsuits Regarding Kid’s Unauthorized Use of Credit Cards 

Surprisingly, the state of kid’s unauthorized use of credit cards used to be worse than it is currently. In 2014, the Federal Trade Commission (FTC) filed lawsuits against Amazon to get refunds for parents whose kids made unauthorized purchases and to improve the transparency of in-app purchases for kids. 

Amazon offers numerous games marketed toward kids. Many of these games offer in-app purchases or expansions that kids can purchase. One major issue parents cited is that many charges appeared vague. Apps often failed to clarify whether in-app currency or real dollars would apply to various purchases. As recently as 2012, kids could technically purchase any in-app charge below $20 without their parents’ authorization.

In 2013, Amazon tried to improve some of its purchasing protocols by adding purchase passcodes to many apps. However, it soon became apparent that many kids could make unlimited purchases for a 15- to 60-minute window after their parents entered their password.

Multiple parents participated in these lawsuits. Each came forth with stories of how their kids made hundreds of dollars of in-app purchases. Some kids took advantage of unlimited purchase windows, while others pressed buttons and made accidental purchases. 

The FTC was successful, yielding $19 million (from Google), $32.5 million (from Apple), and $70 million (from Amazon) back to parents. They continue to improve the state of advertising to children and the unauthorized use of credit cards. 

Can You Get a Refund For Your Kid’s Purchases? 

Parents are usually responsible for their children’s actions (and thus purchases). This is especially true if children make purchases with their parent’s permission. However, some instances allow parents to obtain a refund for their children’s unauthorized use of credit cards.

Firstly, many credit card companies offer a fraud liability guarantee or similar service. With this guarantee, customers can get refunds and have unauthorized credit card usage investigated by their creditor. This is true even if the person who is using your card is your kid or another family member. 

If you make your kid an authorized user, you are responsible for their purchases, even if you don’t technically authorize them. Likewise, some credit card institutions may not offer fraud protection or charge investigations. Thus, you should research whether your credit card company has services that can help you if your kid uses your credit card. 

An Attorney’s Opinion

According to TikTok attorney Ugo Lord, situations involving kids’ unauthorized use of credit cards will take into account the measures put in place to prevent purchases. Parents often face liability for their children’s purchases, even if the purchases are made accidentally.

As mentioned above, there are many ways you can help reverse and refund the charges involved. For instance, many credit card companies will offer fraud protection against unauthorized charges. Amazon has an incredibly lenient return policy, with most items being fully refundable within 30 days of purchase. Especially with increased requirements and protections from the FTC, it is becoming increasingly easy to refund unauthorized credit card usage. 

So, while phone apps may seem like fun and games, you may want to re-check your children’s ability to make in-app purchases the next time you hand them a phone to play.