“You wouldn’t believe what happened at work today,” said my friend, Keith Ferrell. He helps teachers and students integrate technology into elementary school classrooms.  As we talked over dinner, he shared a crazy (but all too common) story.  A nine-year old girl at his school had spent $3,711 on a variety of online games.  She racked up the bill in just three weeks—right under her parents’ noses.

Your child couldn’t do that?  That’s what her parents thought.  The fourth grader downloaded free apps through iTunes. Dragon Mania Legendswas one of her favorites. Her parents’ credit card was linked to her iPad.  At some point, her parents must have used her iPad to make an online purchase.  After that, the little girl bought whatever game upgrades she wanted. 

In Dragon Mania Legends, players battle Vikings with a team of dragons.  Their odds of kicking Nordic butts increase when players buy in-app packages.  They include a pile of gems for $1.99, a sack of gems for $4.99 and an island full of gems for a whopping $99.99.

 January 14th was the little girl’s Dragon D-Day. She bought seven islands of gems.  In just one day, she cost her parents $700 (see screen shots below). “Her teacher had noticed a lot of games on the girl’s iPad,” said Keith.  “That prompted a look at her iTunes account.  From there, we found all of her online purchases.” 

According to Fortune magazine, last year Apple agreed to refund at least $32.5 million to parents whose kids racked up huge bills through in-app purchases.  Apparently, Apple hadn’t told users that entering an iTunes password allowed 15 minutes of access.  This gave kids 15-minutes to go on buying sprees without entering a password.

 “Apple also agreed to change its billing practices to make sure all app charges are made with parental permission,” said Fortune’s Tom Huddleson, Jr.  If Apple made a change, somehow, this nine year old found her way around it.

Amazon is criticized for something similar.  The U.S. Federal Trade Commission is suing the online retailing giant for charging parents whose children made unauthorized in-app purchases.  “Amazon’s in-app system allowed children to incur unlimited charges on their parents’ accounts without permission,” said FTC Chairwoman Edith Ramirez.

According to the FTC complaint, Amazon tried fixing the problem by ensuring that account owners enter passwords for charges over $20.  But that might not be enough.  In just three weeks, the fourth grader who charged $3,711 to her parent’s credit card made 19 purchases below the $20 threshold.

It’s easy for parents to point a finger at the gaming industry.  But according to Singapore-based school psychologist, Dr. Jeff Devens,  parents can be blamed.
Devens says parents should take the following steps:

1.  Control settings and passwords
If your child has unsupervised access to a computer or ipad make sure YOU control the settings and passwords to apps and websites. For example, with an iPad go to settings, general, and restrictions. Enabling restrictions allows you, the parent, to determine what access your child will have. You set a 4 digit passcode, known only to you. Once completed, you have the option of deselecting the following: Safari, Camera, Face-Time, iTunes Store, iBooks Store, Installing Apps, Deleting Apps, and In-App Purchases. With this feature, the only apps appearing on the computer will be those that the parents have allowed.

2. Teach Responsible Behavior
Don't assume that kids can handle the freedoms that come with technology.  They can’t—not without guidance. Have them demonstrate responsibility before giving them access to the sites, tools,  and apps.

3. Set Time Limits and Supervise
Schedule times for your child to be on the computer. And follow up to see what they are doing. This isn't about invading their personal space. It’s about trying to understand what’s attracting them.  

“Technology is an increasing part of our kids’ lives,” says Dr. Devens.  “It's not going away. So it’s time for parents to get in the game.”

As you can see from the screenshots below, a lot of damage can be done in a few short weeks.

Nine-Year Old’s 3-Week Spending Spree

Total Spent:  $3,711 USD  ($4,640 Singapore dollars)
(Prices below are in Singapore dollars)

Nine-Year Old's 3-Week Spending Spree Receipt

Andrew Hallam is a Digital Nomad currently living in Chapala, Mexico. He’s the author of the bestseller, Millionaire Teacher and The Global Expatriate's Guide to Investing: From Millionaire Teacher to Millionaire Expat.