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In a class action settlement agreed to by Amazon, the Federal Trade Commission (FTC) has stated the online eCommerce giant will refund money to parents of children who made unauthorized in-app purchases for games Amazon claimed were free to use. The FTC filed the lawsuit in 2014 after allegations surfaced that Amazon charged parents several million dollars for the unauthorized in-app purchases children made. Court documents reveal the FTC also charged Amazon with failing to supply parental controls that would have stopped the unauthorized in-app purchases
Children accessed the supposedly free games from tablets and Smartphones. According to the settlement, Amazon offered access to free games, but the catch was children had to spend money to buy the virtual items found within the games. The in-app game charge for virtual products ranged in price between 99 cents and more than $100.
According to the FTC, “Amazon began billing for in-app charges in November 2011, well after media reports about children incurring unauthorized charges in similar apps from other mobile app stores. Amazon nonetheless often has failed to obtain parents’ or other account holders’ informed consent to in-app charges incurred by children.”
Tens of thousands of Amazon customers filed complaints with the FTC, which took immediate steps to stop the practice. A 2016 court ruling declared Amazon failed to gain parental consent for the in-app purchases. However, the judge ruling over the class action lawsuit refused to grant a permanent injunction to stop Amazon from generating revenue, without the consent of parents. Shortly thereafter, the FTC and Amazon agreed to drop appeals to complete the refund request and thus, the completion of the class action settlement.
What You Need To Know
According to class counsel, eligible class members include parents of a child who was under the age of 18 and made an Amazon in-app purchase between November 2011 and May 2016. The more than $17 million settlement fund covers all of the unauthorized in-app purchases. Refund amounts depend on the amount of the unauthorized charges made to credit card accounts.
Amazon must contact eligible class members through email to tell them if they qualify for class member eligibility. Parents click on the link within the email or they can visit their Amazon account and open the “Important Messages” link.
The deadline to file a claim is May 28, 2018. Federal Trade Commission v. Amazon.com Inc., Case No. 2:14-cv-01038, in the U.S. District Court for the Western District of Washington at Seattle has set up a website for plaintiffs at www.ftc.gov/enforcement/cases-proceedings/refunds/amazon-refunds.
The FTC is represents by class counsel Jason Adler, Heather Allen, Jane Ricci, Miya Tandon, Katharine Roller, Helen Wong, and Laura Solis. Amazon hired two large law firms to handle the legal issues involved in the class action settlement.