Yoga app developer says Apple forces him to ‘steal’ from users through auto-payment gotcha

The developer of a popular yoga iPhone app says Apple is forcing him to “steal” from users by requiring implementation of gotcha-style automated payments at the end of their free trial. The developer currently lets fans of the Down Dog app opt-in to monthly payments at the end of the trial, rather than automatically charging their accounts.  Apple has rejected the latest update of the app, and in a back-and-forth dialog with the developer seen by this reporter, the firm confirms it won’t accept the update unless automatic charges are implemented.

“They can choose to steal from their customers who forget to cancel, but we won’t do the same to ours. This is a line what we will not cross, ” the developer Tweeted on Tuesday.

Automatic charges at the end of a free trial are the source of much frustration for consumers. The Federal Trade Commission has devoted a page of instructions on its website to what consumers should do when they get caught up in automated end-of-free-trial charges — sometimes referred to as ‘grey’ charges — including instructions on how to dispute the payments with credit card companies.

Apple did not immediately respond to a request for comment.

In a dialog with the developer labeled “binary rejected,” Apple offered this rationale, according to a screenshot provided by Benjamin Simon, founder of Down Dog.

“We noticed that your app offers a free trial without implementing the offer in App Store Connect. Offering free trials through App Store Connect ensures that when the free trial period is over, the user will automatically be billed (unless the user has canceled the subscription,” it said.

Apple says elsewhere that consumers should cancel free trials at least 24 hours before the end or risk being charged.

The developer Tweeted that auto-charging at the end of a free trial is a customer service headache.

“We’ve experimented with auto-charging trials in the past and they lead to (1) fewer users trying the product (2) a huge number of refund requests by users who forget to cancel and (3) complete disbelief from those users when we explain that Apple won’t allow us to issue refunds,” Down Dog, based in San Francisco, said. “It’s particularly bad because (1) canceling a subscription is notoriously hard to find in Apple’s settings (2) Apple requires users to cancel at least 24 hours *before* the trial is over and (3) their site for requesting a refund often returns an error after logging in.”

Apple’s information page on “auto-renewable subscriptions” doesn’t seem to clearly preclude Down Dog’s opt-in design.

A Reddit thread devoted to the issue includes some Apple users complaining about automatic payments, while others defend the model, suggesting consumers should be savvy enough to cancel before the free trial runs out.

While consumers can always initiate a fraud dispute with their credit or debit card issuer if they feel unfairly charged, Apple holds significant clout in that scenario: The firm can close a user’s iTunes account if it feels chargebacks are excessive.

The issue arose when the developer of Down Dog updated its software with minor updates and submitted it to the app store, triggering a review.

The rejection came as a surprise, Simon said.

“We’ve been doing a non-autocharging trial for almost two years.  The update they are rejecting just has bug fixes and performance improvements – there’s no change to the free trial,’ Simon told me.

The disagreement comes only weeks after Apple’s very public app spat with Basecamp and it’s Hey email app. Initially, Apple rejected Hey because it did not allow users to sign up for the paid service through the app — which gives Apple a 30% cut — but instead required signups at Basecamp’s Hey website. That cut Apple out of the transaction.

The maker of Down Dog suspects similar motivations in this incident.

“In addition to in-app purchases, we allow users to subscribe on our website at a discount …because of Apple’s 30% cut,” the developer told me. “Apple won’t let us mention the website option in the app, and it seems plausible that they want us to do an auto-charging trial so that users won’t find the website option on their own during their trial. Obviously they’re not stating that reason explicitly.”

 

About Bob Sullivan 1451 Articles
BOB SULLIVAN is a veteran journalist and the author of four books, including the 2008 New York Times Best-Seller, Gotcha Capitalism, and the 2010 New York Times Best Seller, Stop Getting Ripped Off! His latest, The Plateau Effect, was published in 2013, and as a paperback, called Getting Unstuck in 2014. He has won the Society of Professional Journalists prestigious Public Service award, a Peabody award, and The Consumer Federation of America Betty Furness award, and been given Consumer Action’s Consumer Excellence Award.

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