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Australian firm fined £250k for advertising premium rate service in children's apps

An Australian app company has been fined £250,000 by the UK's premium rate phone number watchdog PhonepayPlus for advertising a "misleading" paid service inside children's apps created by other companies.

CommandM PTY Limited's app claimed to boost smartphone battery life and charged a £4.50-a-week premium rate subscription.

The fact that the service was advertised in apps designed for children led to numerous complaints by parents. PhonepayPlus said one parent reported the app as they received a bill of over £100 after their child subscribed.

The ruling means consumers can claim a refund if their children subscribed to the service by mistake or were misled into signing up. The regulator has said it will also be contacting the creators of the apps which the advert featured in to explain the ruling.

"As children and young people increasingly engage with apps we will continue to work with parents and games developers to make sure that children can get the best of this exciting technology in a safe environment," said PhonepayPlus chief exec Paul Whiteing.

The UK Office of Fair Trading is currently investigating online games and apps aimed at children (opens in new tab), particularly the wider problem of children being "unfairly pressured or encouraged" to purchase costly add ons, something which is often done easily with a click of a button, without their parent's knowledge.

The report will determine whether these games are "misleading, commercially aggressive or otherwise unfair" and is set to be published in October 2013.

Tomas is co-founder of Lucky Pilgrim, a team of journalists, photographers and art directors who connect brands to audiences through words, imagery and design. He was formerly editorial director at Chapel and managing editor at Courier magazine, and was a writer for ITProPortal as well as The Independent, EastLondonLines, The Sunday Times Magazine, and Croon.