FTC: Amazon Unjustly Bills Parents for Unauthorized In-App Purchases

The Federal Trade Commission filed a lawsuit on Thursday against Amazon for knowingly allowing children to purchase content within apps on mobile devices without requiring authorization from parents. The FTC claims that Amazon did not take necessary measures, such as “password requirements,” to keep minors from making purchases through their parent’s accounts.

“For years, despite this very real consumer issue, Amazon often allowed children to run up unlimited charges without their parents’ knowledge or permission,” affirmed the director of consumer protection of the FTC, Jessica Rich.

Internal Amazon emails included in the FTC lawsuit reveal the company acknowledged their practices were “clearly causing problems for a large percentage of our customers.” They began requiring a password for in-app purchases over US$20 soon after. In a letter to the FTC earlier this month, Amazon claims their parental controls were very “effective” and provided customers with “real-time notices” when making in-app purchases.

“We have continuously improved our experience since launch, but even at launch, when customers told us their kids had made purchases they didn’t want we refunded those purchases,” wrote Amazon’s associate general counsel, Andrew DeVore.

The FTC further states that “in-app purchases are final and non-refundable” by Amazon, and that the company keeps 30 percent of the money.

The trade commission has notified Amazon that they will proceed with the lawsuit unless they adopt changes similar to Apple’s app store. They say the lawsuit is intended to prevent children from unknowingly purchasing “virtual items,” such as games or apps.

Source: USA Today.

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