A quick recap.
Back in December 2011, we reported a free-to-play Chinese-only language game was riding high in the UK top grossing charts.
Weird perhaps, but on reading the reviews, users were complaining they hadn't downloaded the game and were being charged for in-app purchases they hadn't bought. The conclusion was the game was a scam.
Hence, when three Chinese language games appeared on the much more lucractive US top grossing chart this week, our assumption was it's a case of history repeating.
But this is where the story gets really interesting.
From the horse's mouth
Since that article, we've been in touch with a publisher which is at the sharp end of what we're calling iTunes Scamgate.
It doesn't want to go on the record because it's worried about Apple's reaction to its testimony. But what seems clear is that it's doing nothing wrong.
Indeed, it claims its business is being undermined by scammers who are using its games and hacked credit cards to gain in-game currency by fraudulent means, and Apple's not helping.
Pocket Gamer: When did you first start hearing about these iTunes fraud payments from users?
We didn't get such complains from users. It sounds weird but that's true.
What happened was we started to notice this issue when we found ourselves getting much less revenue compared to the virtual items we sold. We asked Apple about it and were told it's 'bad debts'.
Then we searched on Google and found it was related to credit card fraud. It's something we can do nothing about ourselves, as we don't know which payments are bad.
So you've spoken to Apple. What's its response been?
I attended the iOS 5 Tech Talk World Tour 2011 in Beijing last December and talked to Apple staff face-to-face. I complained about this issue.
They told me they've noticed it and are fighting back against the criminals. But Apple protects its customers and refuses to give us a 'cheater list' we can check against.
Why do you think your games are being targeted, as the hack would only seem to make sense if a game developer makes money?
Actually, I think you're wrong. No developer can benefit from this.
As we understand it, the process works like this:
- A player pays money to a hacker to buy virtual items or currency in a specific iOS game at a much lower price than the official rate.
- The hacker then uses a stolen credit card or iTunes account to complete the iTunes payment.
- If the owner of the legitimate iTunes account or credit card complains to Apple, they are reimbursed the purchase. The revenue is then deducted from the developer, but the original player keeps his object or currency.
Is the fraud happening on the US App Store or on other stores?
Our first iOS game was English language only, and we didn't have any problems.
Then we released a Chinese language game, which became popular and then the problems started. When we checked our log of IAP against the revenue we got from the Chinese App Store, it was much less than it should have been. In other territories, the deviation is much smaller.
The reason is Chinese law is very weak when it comes to such credit card criminals. You can see on many popular Chinese website how these transactions work.
You say your sales have been affected. How?
We suffer in two ways from this issue.
Some honest players won't play or pay in our games. Some players choose to buy cheap items using the hackers.
We're trying our best to fight against this issue. If we find a fraudulent payment, we will block the cheater's account. We also have staff trawling the exchange sites and if we find someone is trying to sell virtual items for our games, we will contact them and get that transaction banned.
However, from our point of view, what would be more efficient would be if Apple told us about fraudulent payments on a user level so we could punish every cheater and so stop our players purchasing from hackers.
We worked on web games and worked closely with PayPal in this manner, and it reduced the problem.
Obviously, we'll be further researching this growing issue. You can get in touch with us at news {at} pocketgamer dot co [dot] uk.
