Online games warned over practices
The online games industry has been warned against pressuring children to 'pay to play' under proposed principles drawn up by the Office of Fair Trading.
The proposals follow an investigation by the OFT that found that some games included "potentially unfair and aggressive commercial practices to which children may be particularly susceptible".
Investigators found games that implied the player would somehow be letting other players or characters down if they did not buy content, blurred the distinction between spending virtual currency and real money and used statements or images to encourage children to make a purchase.
The OFT said such practices were likely to breach consumer protection law, and companies in the market needed to make changes to ensure they were fully complying with their legal obligations.
The draft proposals say payments made by children while playing games online will not be deemed authorised, and should not be taken, unless the account holder - such as a parent - has given their informed consent.
And they state that consumers should be told upfront about potential costs for playing the games, and any other important information such as whether their personal details will be shared with third parties.
The OFT launched its investigation in April following concerns that users could run up substantial costs paying for content such as upgraded membership or virtual currency in forms including coins, gems or fruit.
Typically, players can access only certain areas of these games for free and must pay for higher levels or features.
OFT executive director Cavendish Elithorn said: "This is a new and innovative industry that has grown very rapidly in recent years, but it needs to ensure it is treating consumers fairly and that children are protected.
"The way the sector has worked with us since we launched our investigation is encouraging, and we've already seen some positive changes to its practices. These principles provide a clear benchmark for how games makers should be operating. Once they are finalised, we will expect the industry to follow them, or risk enforcement action.
"In the meantime, we want to hear what parents, consumer groups, industry and anyone else with an interest thinks about our principles before we finalise them later this year.
"This is a global industry so we're also sharing our principles with our enforcement partners worldwide with the goal of achieving some common international standards."
Gillian Guy, chief executive of Citizens Advice, called for the guidelines to back strong enforcement.
She said: " The scandal of online games which try to pressure or trick players into making extra purchases must end. We've seen parents turning to us after their children inadvertently run up huge bills for downloads, so we welcome the OFT's moves to clamp down on the practice.
"After an unexpected £200 bill landed on his doormat, one of our clients assumed he'd been the victim of fraud. But after approaching his bank, he was told that the bill was in fact down to a game his 10-year-old son enjoyed playing. He was shocked to be told that as the extra costs were laid out in the small print, the only way to get his money back would be to sue his son.
"It's good to see that the OFT are considering action to make games include clear information on costs, and require authorisation for the account holder before children can make in-app purchases. The final rules must be backed up by strong enforcement action to ensure that consumers are properly protected."
Martin Lewis, founder of MoneySavingExpert.com, described the OFT consultation as "flaccid".
He said : " When games like My Little Pony and others charge £69 a pop for children to buy "gems", there is something almost sinister happening.
"Many of these free games take advantage of children's confusion between virtual and real money and some parents' technical illiteracy.
"The OFT consultation is flaccid - the problems are apparent and games makers and app stores need to be held to account.
"We need rules that stop bait pricing on games predominantly marketed or targeted at children: wealth warnings both at the start of games and inside app stores to indicate it is an in-app purchase game, and caps put on how much can be spent on such purchases within an hour, which can only be removed by the cardholder."
A DCMS spokesman said: "We welcome the OFT's investigation into this very important issue. The Government is committed to ensuring that consumers, and particularly children, are properly protected.
"We will be studying the OFT findings and proposed remedies and will be interested to see how the industry responds."