Apple Insider magazine has reported that Connecticut based mother Jessica Johnson will be forced to pay for over $16,000 worth of in-game purchases, made by her six year old son over the course of several months, on the iPad version of the game ‘Sonic Forces’.
According to Johnson, she first noticed unauthorized activity in July, 2020. On a single day, twenty-five charges totaling over $2,500, were posted to her card. Overall, the total amount of unexplained charges came to over $16,000.
Chase Bank Conducts an Unprecedented Three Month Chargeback Investigation
Johnson contacted her card issuer—Chase Bank—and was told to file a chargeback. The bank also told her that because App Store purchases are a common type of fraud, the transactions would likely be reversed.
Countless merchants around the world know how this story usually plays out. Any chargeback request filed by a customer is instantly granted, no questions asked. Merchants only find out about them later, are forced to file a chargeback representment dispute, and then must spend time and resources making their case. Often, they lose.
However, that is not what happened here.
In October, Chase informed Johnson that they had conducted a three-month investigation into the purchases, determined they were not fraud, and were denying her chargeback request. She was told to contact Apple if she wanted to continue to seek a refund.
Preferential Treatment for Apple
It’s clear Chase provided Apple with preferential treatment, beyond anything your average merchant could even dream of hoping for.
First, the fact that Chase didn’t instantly perform a chargeback is completely against the norm. Because card holders, not merchants, are the bank’s customers, they will usually do anything to keep the customer happy. That did not happen here.
Second, minors making purchases with a credit card are still an unauthorized purchase. Although merchants consider them a form of friendly fraud, there is no reason card holders should be held accountable for them. According to NJ attorney Billy Pinilis:
“[In] the United States, the law doesn’t distinguish between a kid buying virtual coins in an app or pilfering your credit card from your wallet to go on a shopping spree — or for that matter, a thief taking your wallet from your car. An unauthorized purchase is an unauthorized purchase.”Source: creditcards.com
The fact that Chase was willing to take these steps is pretty clear anecdotal evidence that Apple receives special treatment. Any other merchant would have seen their profits instantly taken away, and be forced into a representment processes that is hardly friendly to merchants.
Bottom line, while the rest of the world is focused on the idea that Apple would charge a family to pay over $16,000 for purchases made by a six year old, we’re most shocked at the behavior of Chase bank.
It’s sad, yet unfortunately not surprising, to learn that they are usually so unwilling to help merchants—until Apple. Then, all of a sudden they are more than willing to go the extra mile to not only protect a merchant, but even break the long-established rules of what constitutes an authorized purchase.
Regardless of your thoughts on this particular case, we can only hope that the red-carpet treatment Apple received here is a signal that banks will start doing their due diligence and taking the needs of all their merchants seriously.
But we won’t hold our breath.
~ The Editorial Board