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Why aren’t banks doing more to control in-app spending?

child using credit card

Every year in the UK, children spend an incredible £270m on loot boxes and other in-app purchases.

Lured by these virtual treasure chests, children pay to unlock special characters, weapons, skins or extra content in a game.

Players don’t always know what they are buying – as the contents of the loot boxes can be a mystery – and they may even fail to understand they are spending real money.

And with 93% of children playing online games regularly, this is an issue affecting many families.

Indeed, there are frequent horror stories in the news, such as the children who spent nearly £550 in three weeks buying players in the video game FIFA. Or the son with learning difficulties who emptied his savings account, spending more than £3000 on one game over three months.

Are things improving?

Parent Zone has been at the forefront of the campaign for change, demanding better information for parents from games companies and further research into the links between gambling and gaming.

MPs have now called for loot boxes to be classified as gambling, which would ban their sale to children. And a recent report by the House of Lords urges the government, who are due to review the Gambling Act later this year, to act immediately.

In the meantime, could banks be doing more to protect parents from these unexpected and excessive charges?

Why aren’t banks stopping these payments?

According to UK Finance, “banks, building societies and card companies are always looking out for unusual transactions, using a range of sophisticated security features to protect customers from possible frauds. Where an unusual transaction is identified, firms will typically contact customers to verify whether the payment is genuine.”

The problems with this seem to be identifying the transactions as either “unusual” or “fraud”. If your card details are saved on an app or Google Pay, for example, there would be no reason to flag the payment. And if you’ve given your child your password or pin number, it’s likely to count as an authorised transaction.

Furthermore, recurring payments don’t necessarily arouse suspicion because, banks say, they might be a subscription. And once a pattern of spending develops, it’s not going to be seen as unusual.

What banks can do to help

However, the Financial Conduct Authority says that if a child has used your card “with a limited understanding of what’s happening”, the payments may not all be authorised. And they point to the need for banks to treat customers – especially those who are vulnerable – fairly.

Last year, an extra layer of security was introduced for online payments in the form of Strong Customer Authentication (SCA). The idea is to reduce fraud by asking the customer to confirm their identity via a phone call, text message or an app.

Although this is generally used for bigger purchases, if multiple payments of any amount are made within a short period of time, you may be asked to prove it’s really you making the purchase.

Not all banks have set this up yet – but they must do so by March 2021, which will help parents prevent their children spending without permission.

Banks have also voluntarily introduced a range of tools for managing card transactions. Customers can, for example, block in-app purchases, set a spending limit or enable live push notifications from mobile apps when card payments are made.

Each bank varies, so it’s worth contacting yours to find out what they offer.

And if you don’t want these restrictions on your bank card, why not set up a separate account for gaming activity? You could open a new account, with its own card, transfer a small amount of money into it and use that as the default for any in-app purchases.

What else can parents do?

Whatever device or platform your child uses, there are parental controls that allow you to turn off or limit spending. And they can be set up to require authentication on all purchases. We’ve got a guide to controlling in-app purchases here.

The UK Interactive Entertainment Association (Ukie) launched the Get Smart About P.L.A.Y. campaign, earlier this year, encouraging more parents to use tools that manage screen time and in-game purchases on video game consoles.

They have partnered with Askaboutgames for step-by-step guides to setting up parental controls on consoles, handhelds, smartphones and tablets. There are also simple videos to guide you through the process.

Apple’s Screen Time gives you control over the App Store and Google’s Play Store has similar features available through Family Link.

There are further protections if in-app spending is charged through your phone. If you see an unexpected charge on your bill, you can contact the Phone-paid Services Authority (PSA) or you can make a complaint about charges through Phone Brain.

Other top tips

  • Check all bills and bank statements regularly 
  • Don’t share passwords or pin numbers with your child
  • Check any information available from gaming companies on the inclusion of in-app purchases and the odds of success when opening a loot box 
  • Talk to your child and explain that even when playing free games, buying extra lives, coins or moving to the next level can cost real money

Image: kwanchaichaiudom/stock.adobe.com


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