Amazon Sued for Over Billing App Store Purchases Made by Kids

The Federal Trade Commission (FTC) on Thursday filed a lawsuit in a Federal District Court in Seattle, contending that Amazon improperly billed customers for “many millions of dollars” of charges made by children without their parents’ consent. The suit focuses on charges related to games downloaded through Amazon’s app store.

The suit says that Amazon’s mobile store introduced the ability to bill customers with an application (called in-app charges) in November 2011, but did so without parental notifications or password requirements in children’s games. In many cases, the charges were for digital goods like coins, clothing, clues or tools that help a player progress through a game.

Jessica Rich, director of the agency’s Bureau of Consumer Protection, said in a conference call on Thursday that Amazon’s approach resulted in “sticking parents with unexpected bills in the hundreds of dollars.”

Ms. Rich said that the charges led to “thousands of complaints that we know of.” In the discovery phase of its suit, she said, more complaints are likely to surface and the agency will be able to estimate more precisely the purportedly improper charges.

Apple had faced similar accusations regarding its app store and it settled with the FTC in January, agreeing to better ensure parental approval of purchases and to pay at least $32.5 million in refunds to customers.

In the conference call, agency officials said they could not comment on private negotiations with Amazon and why no settlement had been reached.

Ms. Rich did say that the FTC’s goal in both the Apple and Amazon cases had been to seek full refunds and require informed consent. In the Amazon case, the agency is seeking an outcome “similar to the settlement with Apple,” Ms. Rich said.

Last month the FTC informed Amazon that it planned to sue, unless the company agreed to a consent order modeled after the Apple settlement. Since Amazon claimed their case involved “very different facts,” the company had “no choice but to defend our approach in court.”

The complaint said that it was not until June 2014 before the commission voted to approve the suit, that Amazon changed its in-app purchase program to really obtain informed parental consent. Ms. Rich claims, that was almost two and a half years after the problem surfaced. During that time, Ms. Rich said, parents who sought refunds faced an Amazon process that was “unclear and rife with deterrents.”

If you have incurred unauthorized charges from purchases made on Amazon without your consent, you may be entitled to compensation. Contact one of our Gacovino Lake attorneys at 1-800-246-HURT (4878) for further information.

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