84 Fraudulent Apps On The AppStore Still Trick Users Out Of More Than $100M Annually

Scam apps have been an issue for as long as the App Store has existed. So, since 2008, it’s still mind-boggling that after 14 years the most valuable company in the world doesn’t seem to get a handle on the issue. Why are the brilliant engineers that brought us the iPhone suddenly not capable of coming up with a solution that protects consumers? Well, you might not like the answer.

After all, it might not be in Apple’s interest to address the issue. With the mobile phone market being saturated, the big bucks are increasingly earned in the App Store. And Scam apps are great clients. They obviously make a lot of money through their scams, of which Apple gets its cut. Plus, the App Developers spend a lot of that money on running Ads on the App Store that Apple also gets to pocket. Not too shabby, as they like to say at Apple.

In March 2021, Avast shared a list of 133 fraudulent apps for which Sensor Tower estimated a total of 500M  downloads and total revenue of $365M generated by the applications in their lifetime.

Dr. Frederik Lipfert, the founder of vpncheck.org, has found that over a year later, more than 60% of these reported scam apps are still active on the AppStore. According to his calculations, these apps are scamming users for anywhere north of $100M annually.

84 Scam Apps Still Available on Apple’s AppStore

Of late, Apple has been subject to antitrust lawsuits and has come under regulatory scrutiny that will likely rein in its market power and control over the online marketplace. Apple has continually argued against the move for free markets, citing user privacy concerns.

If Apple is indeed warding off the endless sea of litigation with the consumer’s best interests at heart, how has a self-appointed AppStore critic, Kosta Elftheriou, uncovered and reported several fraudulent apps that have gone unnoticed by the tech giant? Wink wink, we have an idea why.

Apple’s primary argument for its need to continue to be the gatekeeper, and keep control over app distribution, fails to impress when we take a moment to shine the spotlight on fleeceware apps still running on the AppStore a year after being reported. Fleeceware is any sketchy app designed to defraud end-users by charging excessive subscription fees and is typically difficult to cancel. While these apps don’t attack users and compromise security like ransomware, they do have the same end goal, i.e. money.

Avast shared a list of 133 fraudulent apps in March 2021, and after over a year, in June 2022, 84 of them are still active on the AppStore.

Dr. Frederik Lipfert went through the list shared by Avast and confirmed the details for each app individually in Sensor Tower. He found that for June 2022, the active fleeceware applications had 7.2M unique downloads bringing in total net revenue of $8.6M in a single month.

List of active iOS Fleeceware Apps

Here’s a breakdown of the fleeceware apps based on Avast’s list that is still active on the AppStore for the month of June 2022:

Showing 1 to 84 of 84 entries Active Fleeceware Apps on iOS from Avast’s report dated 23-03-2021*

The data is a quick Google search away and readily available for anyone who would care to take down fraudulent apps. Apple dragging its feet despite having a team dedicated to reviewing apps is quite telling, particularly after individual developers have pointed out several scams and Avast’s curated and published its list of fleeceware apps.

It should be noted that Apple has implemented some rudimentary controls for reporting a scam app using the ‘Report a Problem’ button. But how is this useful, if they don’t act on the information their users submit?

Apple’s Motive: Coins or Consumers?

Let’s take a look at Apple’s earnings from the AppStore and its overall profitability.

• Apple’s Commission: Apple takes a 30% cut in sales from developers. Due to a policy change, app makers can now talk to their customers about direct buying options that will not be subject to Apple commissions. Last year, Apple also reduced the commission rates to 15% for businesses making under $1M annually, presumably after tasting regulatory scrutiny and pressure from app makers (thank you, Epic?).
• Apple’s Search Ads: Apple is ever-expanding its advertising business. Which is reported to now be at almost $4B a year
• AppStore Profitability: Despite these antitrust lawsuits, we can only hazard a guess at the profitability derived from AppStore as Apple has been evasive about its profit margins. Yet, if their resistance to comply is any indication, the profits derived would probably be a significant number.

The fact remains that these policy changes were introduced in response to lawsuits and were not addressed preemptively from the perspective of end-users and developers who formed the core of the AppStore ecosystem. But with regulation getting tighter, Apple seems to care more about its own bottom line than actually protecting its users.

The Anatomy of a Scam

So, while it is clear that fleeceware apps dupe us out of our money, how do we spot one? Let’s dive into the telltale signs of a fraudulent app.

1. App genre: Most scam apps fall under the category of entertainment apps such as virtual musical instruments or utilities such as flashlights and calculators. Fleeceware apps can pop up in your searches if you’re in the market for apps related to fortune-telling, photo or video filters or editors, quiz-based games, tuners, volume boosters, scanners, templates or wallpapers. While these are the more common themes, there’s nothing to stop scam app makers from branching out to other domains.
2. Fake reviews: This one is fairly easy to spot. The rating breakdown typically has a great many paid 5-star reviews with bogus reviewer names over a specific period that hides the legitimate lower-rated reviews.

Figure 1: Rating Breakdown of a Fleeceware App

Figure 2: 5-Star Reviews of a Fleeceware App

Figure 3: Lower Rated Reviews of a Fleeceware App

3. Excessive subscription charges: Fleeceware apps often come with hidden costs and a free trial period for a fairly basic app that you could likely get for free. Users may be billed multiple times or charged a higher amount at checkout. It is much harder to unsubscribe from its services, and unsuspecting victims are often billed even after uninstalling the app.

If you want to know more, Kosta Eleftheriou has a fascinating Twitter thread exploring how sketchy apps make money.

Home Remedies for Fleece Burns

It is one of those scenarios where the old adage “prevention is better than cure” rings ominously true. Researching for free alternatives and reading the 1-star reviews is a good place to start before subscribing to any app. More often than not, fleeceware apps tend to have words like fake, scam, fraud app, and several complaints around subscriptions in their user reviews. Additionally, don’t fall for false advertisements that state the app is recommended by Apple, as in the case of StringVPN, another scam app uncovered by Kosta Eleftheriou.

However, if you have fallen victim to this scam and all your attempts to unsubscribe have failed, you should reach out to your bank and ask them to stop processing any payment requests made by the fraudulent app. That’s an easier option compared to canceling and requesting the bank to re-issue the card with a new card number.

Wrapping Up

It’s a shame that the most valuable company in the world isn’t addressing these issues. There might be many reasons for it but “we can’t figure out how” is probably not it. If developers like Kosta Eleftheriou or researchers at Avast can figure it out, Apple could as well. The truth is, they just don’t really care because it makes them a lot of money. According to Apple CEO Tim Cook, 100,000 applications are being reviewed in any given week, and forty thousand of them get rejected. And still there remain Apps on the Store pointed out by many folks that Apple just can’t get a handle on. Strange times indeed.

We’ll check back on this in 12 months and report if Apple in the meantime found it necessary to address the presence of these apps on the AppStore.

*Note: For every app that SensorTower estimates as <5k in downloads and revenue, Dr. Frederik Lipfert has taken 2,500 as an estimate.

This article is republished with the permission of Dr. Frederik Lipfert, who is the founder of vpncheck.org. You can find the original link here.