[telecom] For Apple, Pressure Builds Over App Store Fraud

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For Apple, Pressure Builds Over App Store Fraud

By EVELYN M. RUSLI and BRIAN X. CHEN March 15, 2012

In a little over an hour, Ryan Matthew Pierson racked up $437.71 in iTunes charges for virtual currency that he could use to buy guns, nightclubs and cars in iMobsters, a popular iPhone game. One problem: Mr. Pierson, a technology writer in Texas, has never played iMobsters.

"This was fraud," said Mr. Pierson, recalling the November incident. "I woke up, checked my e-mail, and I could see these purchases happening in real time."

Mr. Pierson raised the issue with Apple and his bank, and the problem was eventually resolved. But his experience is hardly unique, as reflected by hundreds of online complaints saying that Apple's iTunes Store, and in particular its App Store, which the company portrays as the safest of shopping environments, is not so secure.

The complaints come from consumers like Mr. Pierson, who say that their accounts have been hijacked or that some apps are falsely advertised. And they come from creators of apps, who say they are having to deal with fraudulent purchases that drain their time and resources. Software makers also complain that competition in the App Store has become so brutal that many companies resort to artificially inflating their popularity rankings to grab attention.

It's a change for Apple, which was once criticized for its micromanaging of the App Store. Now the problem is not too much control, but too little.

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