Scams Are a Problem for Apple App Store, Digital Advertising

The Apple App Store is full of scams, according to Kosta Eleftheriou, who has hunted down scam apps for iPhones and iPads that lure consumers into a “free trial” and then charge them insanely high monthly subscription rates without an obvious way to cancel. Eleftheriou, who said these scam apps advertise themselves with thousands of fake 5-star reviews, has come to the conclusion that Apple doesn’t care or is incompetent. Apple isn’t the only target for fraudsters, who have a lucrative business scamming digital advertisers.

The Verge reports that Eleftheriou said most consumers are blind to potential scams because “Apple is essentially brainwashing people into believing the App Store is a trusted place.” He added that when “people point out these shady apps, Apple doesn’t necessarily take action.”

It took Apple six months to remove one scam developer who is a repeat offender in the App Store. Eleftheriou, who says Apple removed 100 apps due to his reports, revealed that scammers will also buy successful apps, make minor modifications and begin scamming. The Apple App Store makes an estimated $64 billion a year.

Apple has “been getting better about mandated warnings … [but] the bewildered reviews on these apps are a sign that many iPhone and iPad users are still having trouble.” Eleftheriou noted that some users “get virus pop-ups in Safari, they’re directed to the App Store and think the app is recommended by Apple, they download the app thinking it’ll help them, it’s got the perfect ratings, and they’re not savvy enough to know.”

The results are dire: “Only half will have figured out how to cancel it two months later,” he said. “The other half still hasn’t figured it out after 8 whole weekly billing cycles.”

The Verge states, “situations like these make it harder than ever for Apple to justify its constant rhetoric about how the App Store is safe, secure, and defended” and some Apple employees agree. Apple’s head of its Fraud Engineering Algorithms and Risk (FEAR) team Eric Friedman said the App Review team is “more like the pretty lady who greets you with a lei at the Hawaiian airport than the drug sniffing dog.”

Reviewers ordinarily review between 50 and 100 apps a day. Apple former senior director of worldwide marketing Michael Gartenberg “praised Eleftheriou’s recent efforts to highlight scams,” adding that the Apple ecosystem is “breaking at the seams.”

The Wall Street Journal reports Human Security said that, “fraudsters spoofed an average of 650 million ad placement opportunities a day in online ad exchanges, stealing ad dollars meant for streaming apps available on popular streaming-TV platforms run by Roku, Amazon, Apple and Google.” It added that the fraud could be “stymied if digital ad players strictly followed industry guidelines for tracking the origins of traffic and implemented certain security features.”

Human Security’s chief scientist Michael McNally noted that companies will “just play whack-a-mole, as long as the industry hasn’t upgraded to better defenses.” As the streaming industry grows, he added, “security safeguards aren’t keeping pace.” Google, Roku and “major advertising technology companies” are in discussion to improve security for connected TVs.