Deadline for online games industry

The online games industry has been given a two-month deadline to comply with consumer protection rules aiming to prevent children feeling pressured to “pay to play”.

The Office of Fair Trading (OFT) is cracking down on the industry by publishing a final set of principles for online and in-app games which will also cut the risk of payments disappearing from young players’ parents’ accounts without their knowledge.

It has given games producers a deadline of April 1 to make sure they comply with the rules, which aim to ensure the cost of a game is spelled out to consumers up front.

The principles aim to clarify existing consumer protection law in the fast-moving industry and tackle the OFT’s concerns that firms are using “aggressive commercial practices” and ” exploiting children’s inexperience, vulnerability and credulity”.

Following a market investigation in 2013, the OFT raised concerns about “industry-wide practices that were potentially misleading, commercially aggressive or otherwise unfair”.

The set of principles, which have been firmed up following a consultation, state that consumers should be told up front about costs associated with a game or about in-game advertising, as well as any important information such as whether their personal data is to be shared with other parties for marketing.

Costs should be shown clearly and prominently before the consumer begins to play, download or sign up to a game or agrees to make a purchase, and they should also be broken down to specify the cost of signing up as well as optional extras which can be purchased within the game.

The principles also make clear that in-game payments must not be taken and are considered unauthorised unless the payment account holder, which is likely to be the child’s parent, has given his or her express, informed consent.

They say that: “Traders must ensure that, at the point of each purchase, the consumer explicitly acknowledges his/her obligation to pay.”

The principles also state that a game that has “the potential to exploit a child’s inherent inexperience” by implying that other players or characters within the game are relying on the consumer to do something that is ultimately likely to require a payment is not likely to comply.

For example, one that tells youngsters: ” Your seagull is hungry! Feed him ice cream or he will be unhappy”, where the only way the consumer can keep the seagull happy is to buy more ice cream, is unlikely to be considered up to scratch.

But one which gave more objective and “non-exploitative” information, saying: ” Your seagull is hungry! Feed him sardines or ice cream to make him strong,”, where sardines are available to earn in the game and ice creams are available to buy for real money, would be more likely to comply.

The OFT quoted figures showing that nearly 90% of children aged between seven and 15 have played online games in the past six months, with half paying to play at least once.

It has also produced guidance for parents, suggesting that they should c heck the “payment options” settings on their device. One option is to make sure that a password is required for every purchase, rather than opening a “payment window” in which the password will not be needed for any further payments.

Parents should also check whether there are any in-game purchases by looking at its description on the app store or the game’s website, the OFT said.

It also suggests that parents should try playing the game themselves to understand what their children will see.

The OFT said it has seen “positive engagement” by the games industry and significant improvements to its practices since it launched its investigation. If firms fail to comply with the principles, the watchdog can take enforcement action, which could ultimately include fines.

Clive Maxwell, OFT chief executive, said: ” Many children enjoy playing these types of games. This rapidly growing creative sector has also brought wider economic benefits.

“The online and apps based games industry has already made significant improvements during our consultation process. But it still needs to do more to protect children and treat its customers fairly .”

The OFT launched its investigation in April last year following concerns that users could run up sky-high bills by paying for content such as upgraded membership or virtual currency in forms including coins, gems or fruit.

Often, players find they can only access certain areas of these games for free and must pay for higher levels or features.

Citizens Advice has incorporated the OFT’s advice into its website. Consumers can also get advice or complain to Citizens Advice about online or in-app games by telephone or by visiting a Citizens Advice Bureau.

The OFT, and new body the Competition and Markets Authority (CMA) from April 1, will have access to complaints and may use them in deciding whether to take enforcement action.

Alex Chisholm, chief executive of the CMA, which has a remit to make sure markets work well in the interests of consumers, businesses and the economy, said: ” Once the CMA acquires its powers in April 2014, we will pick up from where the OFT has left off.

“The CMA will continue to monitor the market to check whether the industry is complying with its legal obligations.”

Martin Lewis, founder of MoneySavingExpert.com, said: ” While any and all action is welcomed, the games industry should’ve been banged to rights already over this.

“The fact that games and apps targeted at children pump out charges that can add up to thousands of pounds in a few hours is simply irresponsible.”

He added: “P art of the problem is that many kids are more tech-savvy than their parents. Young kids can easily pick up passwords as they sit on mum or dad’s knee.

“Who can blame them for using the password when they’re in games that encourage them to collect treasures?”

Deadline for online games industry