Last night apparently someone used my iTunes account to download some free game Galaxy Empire and then purchase a $19.99 in-app purchase. It basically drained my $25 balance from a gift card down to $1. I got an e-mail from Apple saying a device not previously associated with my account made the purchase and that my account was locked down. I immediately changed my password and am trying to get the store credit back.

I know individual devices can be prevented from making in-app purchases, but what about the entire iTunes account?

Anyone else had their iTunes account compromised with unauthorized purchases? I don't understand why such devices not associated with my account are even allowed to make these purchases.