FTC lawsuit seeks Amazon refund of in-app charges

Windsor Genova – Fourth Estate Cooperative Contributor

Washington, DC, United States (4E) – The Federal Trade Commission (FTC) on Thursday filed a lawsuit against Amazon.com Inc. for billing parents in-app charges that children incurred without their consent.

The lawsuit filed before the U.S. District Court for the Western District of Washington seeks the refund of millions of dollars that Amazon.com charged customers of children who bought items within apps downloaded on Kindle Fire tablets and other devices without their permission or knowledge.

The suit also asks the court to order Amazon to stop billing parents and other account holders for unauthorized charges.

Amazon willingly allowed kids to purchase virtual items in games and apps worth 99 cents to $99 without their parents’ consent, said Jessica Rich, director of the FTC’s Consumer Protection Bureau.

According to the complaint, Amazon introduced in-app charges to the Amazon Appstore in November 2011. The charges apply to purchases of items such as “coins,” “stars,” and “acorns” in games and other apps that appeal to children. The purchase did not require passwords so children were able to buy unlimited amounts of items and parents wracking huge bills later.

Parents complained of the billing and lack of password for in-app purchases. FTC said Amazon employees acknowledged in 2011 that the lack of password was causing problems to customers. This prompted Amazon to require password for purchases of up to $20 in March 2012.

But the problem of children making unlimited purchases persisted based on Amazon’s internal emails in July 2012. The following year, Amazon again made new changes on in-app purchases wherein a parent was prompted for a password to authorize a single in-app charge made by a child. However, that single authorization often opened an undisclosed window of 15 minutes to an hour during which the child could then make unlimited purchases of in-app items without further authorization.

It was only by June this year that Amazon required account holders’ informed consent for in-app charges made on its newer mobile devices.

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