Or is your issue just with the fact that some games offer unlimited opportunities to spend money? There are many areas of the economy where you can blow as much cash as you desire, I hardly think that alone should qualify something as "defrauding customers".
Because the audience is kids who don't understand the value of money and whose parents aren't tech savvy enough to turn off IAPs in the kids' gaming tablet. Kids go and download these "free" games from the market, then play for some time and get the offer of buying some in-game diamonds with real money and either do the purchase without knowing what their up to or get their parents to pay for it.
In many countries there are regulations about marketing stuff for kids, but these games do not fall under the regulation.
There's no doubt that the execs of gaming companies know that a lot of the money they are getting is from kids who do not understand the value of what they are getting.
This article explains it in more detail: http://www.gamasutra.com/blogs/RaminShokrizade/20130626/1949...
The short of it is: Games who rely on IAP invariably have this progression: They start out as games where player skill determines progress, which has the two-fold effect of causing players to invest time in the game (and become emotionally attached) AND generating favourable reviews from journos who only have limited time to test a game. Then they gradually begin to slow progress of the player by increasing difficulty, and in especially cruel cases prevent the player from playing by introducing longer and longer timers; both of which can be circumvented with IAP to make the game at least superficially resemble its beginning state again.
And this is a bait-and-switch, pure and simple.
The player, having invested time, having become emotionally attached, and having memories of an enjoyable game have then these three choices: Walk away, force themselves to endure pain and uphold their investment, invest more to make the game resemble their memories again. And none of this is obvious from the outset.
> Do you think users don't understand what they're buying?
As i summarized above, they likely understand it, but have several pressures on them causing them to make an emotional choice, not a rational one.
The arcade machines were real upfront about what's going on. You paid a coin to play, and you paid a coin to cheat. There was no pretension of free and no obfuscation of the transaction. further arcade machines were made at a time when the hardware was not affordable for the home.