FTC settlement with Amazon yields $70 million for consumers, advice for business

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The FTC’s law enforcement action against Amazon for unauthorized billing recently settled, leaving two key takeaways: 1) Consumers are eligible for more than $70 million in refunds; and 2) Businesses need to get customers’ express consent before placing charges on their credit or debit cards.

Last year, a federal judge in Seattle ruled in the FTC’s favor in an action against Amazon for billing consumers for unauthorized in-app charges incurred by children. Kid-focused apps available in Amazon’s Appstore prompted children to acquire virtual currency – for example, a “boatload of doughnuts.” But to parents who got stuck with the bill, it was more like a boatload of dough – millions of dollars in surprise charges they didn’t approve.

The Court agreed that Amazon’s practice of charging parents real live money for make-believe items in kids’ apps without parents’ consent violated the FTC Act. The FTC had already settled similar cases with Apple and Google.

The next chapter in the story is to make sure that people who were harmed by Amazon’s illegal practices get their money back. Under the terms of the settlement, Amazon is making more than $70 million in refunds available to customers who were charged for unauthorized in-app purchases made by a child.

Amazon may owe you a refund if:

  • You were billed for charges made by a child that you didn’t authorize, and
  • The charges were for in-app purchases made between November 2011 and May 2016.

The refund process is simple. If you’re eligible, you should have received an email from Amazon. If you think Amazon owes you money, but you haven’t received an email, there are two ways to find out more:

  1. Go to https://www.amazon.com/gp/mas/refund-orders/in-apprefund/ or
  2. Log into your Amazon.com account and go to the Message Center. If you’re eligible, you’ll find more information under Important Messages.

The refund request process is online only and consumers don’t have to send anything by mail to submit a refund request. The deadline for applying for a refund is May 28, 2018. Consumers can call Amazon at 866-216-1072 if they have questions.

The Amazon case also offers compliance currency for companies. Most importantly, as the Judge observed, “Courts have repeatedly held that billing customers without permission causes injury for the purposes of asserting a claim under Section 5 of the FTC Act.” Prudent businesses are careful to explain the nature of the transaction up front and get customers’ express consent before placing charges on their accounts.

Companies that use payment methods other than greenbacks on the barrelhead should pay particular attention to that principle. As the Court held, “Many of Amazon’s arguments improperly assume a familiarity with in-app purchases on the part of consumers.” It’s unwise for companies simply to assume that people grasp how new payment mechanisms work. A clearer explanation at the outset can reduce the risk of antagonizing customers and violating the law.

Furthermore, the case stands for the established proposition that if the disclosure of information is necessary to prevent a practice from being deceptive or unfair, the disclosure must be clear and conspicuous. Amazon argued that a small hyperlink that simply said “In-App Purchasing” was sufficient to alert consumers that they would be billed for in-app charges. Not so, ruled the Court.

If your company is looking for more guidance, consult .com Disclosures: How to Make Effective Disclosures in Digital Advertising.
 

Comments

HOW TO IF IM ELIGIBLE FOR REFUND

If supposed to get a refund please refund me thank you

Why am I signed up for Prime when I did not request it? If I did not keep a close eye on my CC, I would've never caught it, or is the ploy meant to work that way? This is illegal folks.

You made some respectable points there. I looked on the internet for the issue and found most people will go along with with your website.
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I have purchased good on amazon ,lately there have been problems delivering on time or no delivary at all
Any one else is experiencing similiar problem?

During the time mentioned I reported to apple about 2 charges that showed up repeatedly on my bill. Finally after my 2 girls had grown up and honest to God just werent that into video games, we were beach bums. I lucked up and got a young man to assist me, I was about to give up on apple and tell to eat it. Somehow the guy dug up the name of 2 video games that had been rented by a kid who lived in my hometown 220 miles north of us. Its a small town everyone knew everyone. I got in touch with a guy who I was stoll friends with ans asked did he know him. Well what do you know! He had been coming in regularly shoplifting things like rope knoves duct tape plastic sheeting, sounded like your basic murder kit. The kid got tipped off somehow and split. That guy was fired and another guy looked or rather glanced at the work we had compiled and remarked that kid and his imagination.
My case was not that simple. The rest of the $ involvoved was supposed to be 1 car payment handle by a CS emplyee thru WU because the automation system couldnt not do the 1st payment. TheCS agent assured me that the auto mated payment DID NOT GO THROW. A few days later I checked my back and yep had 2 car payments and 2 WU payments. I soke to the most rude women in America! She asked So? What do you want me to do about it?put it on next months. I told her about my health issue, she just said I will get A check in 30 to 35 business days. I told her I paid you with a debit card. To which she said they didnt use them. I told here I was going to stop payment on the extra check. Its not technically late.I then called my bank I guess theyve had problemswith WU. Normally before if I had an issue it was 10 days. After this is done. Im closing my account and going back to where people dont take advantange of you.No cell phone No tv., as off the grid as possble.my life is over.

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