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How to Avoid Costly In-App Game Charges

Susan Johnston

As parents travel over the holidays, many will hand little ones a smartphone or tablet to keep them entertained on the road. After all, hundreds of tablet and smartphone games cater to kids of varying ages, and it beats hearing a chorus of "Are we there yet?" every 15 minutes. But if parents aren't careful, that seemingly harmless gesture could cost them big bucks in the form of in-game or in-app purchases.

These charges can occur in a few different ways. So-called "freemium" games are free to download, but once you reach a certain point in the game, ads (which you can remove for a fee) disrupt the game or limit your ability to continue playing so that you're tempted to pay a small upgrade fee. Click on an in-game advertisement by mistake, and you may wind up buying a ringtone subscription you don't want or downloading malware. Some games also charge for special premium themes, coins or additional features.

[Read: How to Stop Grey Charges.]

A report by the Federal Trade Commission in December 2012 found that 17 percent of 400 apps reviewed allow minors to purchase virtual goods within the app, with prices between 99 cents and $29.99. A few dollars here or there for an online game may not seem like much money, but those transactions can add up quickly. Several recent lawsuits have involved parents who have been billed for thousands of dollars' worth of in-app purchases. To make sure this doesn't happen to you, here's how to keep these costs in check.

1. Choose games carefully. Read a game's description before downloading it. If a game has an in-game purchase option, it will usually say so in the app store. According to Bj?rn Jeffery, co-founder and CEO of kids' app development company Toca Boca, some companies offer game-related purchases in a separate store where parents can enable locks, while "some companies try to blend [purchases into the game] to as high a degree as possible." Toca Boca charges players a one-time fee to download games rather than charging for in-game purchases. However, app stores do not always distinguish games or apps that have in-app advertising from those that do not, so there's still the potential to make purchases through advertisers rather than through the app itself.

Jailbreaking your phone (removing built-in limitations of your phone's operating system) or buying from outside the official app store can lead to malware issues, according to Cathal McDaid, head of security operations at the mobile security provider AdaptiveMobile. "Downloading apps from official, well-known app sources is much safer than using third-party app sites that may contain potentially dangerous apps," he says. Installing malware could also result in unwanted charges or create headaches getting the malware removed from the device.

[See: 7 Hidden Smartphone Expenses.]

2. Play games before letting kids play. Before handing over your smartphone or tablet to your kids, play through a game yourself to see how it works and how purchase options might be presented. "For parents, it's not always apparent when you open the app that there are purchases along the line," Jeffery says. "It looks like a free game." If a game has in-app purchase options, you might decide that it's OK for your child to play the game on a limited basis after you've discussed it with him or her, or you might choose an alternative game without extra charges.

3. Adjust your settings. Contact your mobile carrier to discuss how you can prevent unwanted charges. "One U.S. carrier [AT&T] offers the ability to customize access controls to content, purchases and incoming texts based on what the parents want for each child," McDaid says. "Another carrier [Verizon] places parental passwords on many functions, including application access, the ability to make purchases and the length of time spent on the smartphone [or] tablet. Without the parent's activated password, the function won't work on the device."

Some smartphones allow you to go into settings and disable in-app purchases altogether. If you have a smartphone or tablet that's used exclusively by your kids, this option could help prevent unauthorized charges. But if you play games on the device and want to give yourself the option to buy extra coins or more game functionality, turning off in-app purchases could be an annoyance, Jeffery points out.

4. Don't share your password or credit card number. Nowadays, many kids are tech-savvy enough to place an online order or use a credit card for in-game purchases, so Simone de Rochefort, contributing writer and editor at pixelkin.org, a resource for gamer families, warns against sharing credit card numbers or passwords with your kids. "It doesn't equate to not trusting them," she says. "Keeping a password private is about safety." Some games, apps or websites store credit card information, though, so this method isn't fail-safe.

[Read: How to Make More Secure Passwords.]

5. Help kids make the connection between virtual currency and real money. Use in-game charges as a way to teach kids about financial decision-making. Virtual currencies in a game often don't feel like money, but using something tangible to represent that virtual currency can help kids understand the old adage that "money doesn't grow on trees." De Rochefort suggests keeping a cache of chocolate or a stack of quarters and subtracting one for each in-game purchase. "As soon as a kid is old enough to have an allowance, give that physical representation," she says. "Relate it to things that they love or an activity they'd like to do."

6. Set up alerts for in-game or in-app purchases. Getting email alerts for these transactions could help you address kids' spending habits before they become an expensive problem. Of course, adults can get caught up in mobile games too, de Rochefort says. If you play mobile games yourself, alerts could also help ensure that your own FarmVille or Candy Crush addiction doesn't empty your bank account.

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