Amazon is being sued by the Federal Trade Commission for billing parents and others for unauthorized in-app charges made by children without the account holder’s consent.
In a complaint filed in federal court Thursday, the FTC seeks a court order requiring consumer refunds of the unauthorized charges that total millions of dollars, an FTC release said. The complaint also wants Amazon
permanently barred from billing account holders for such charges when the company doesn’t have consent.
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The children’s apps, available from Amazon.com’s app store, are downloaded on mobile devices like the Kindle Fire.
“Amazon’s setup allowed children playing these kids’ games to spend unlimited amounts of money to pay for virtual items within the apps such as ‘coins,’ ‘stars,’ and ‘acorns’ without parental involvement,” the FTC release said.
“Even Amazon's own employees recognized the serious problem its process created. We are seeking refunds for affected parents and a court order to ensure that Amazon gets parents' consent for in-app purchases," said FTC Chairwoman Edith Ramirez in the release.
The kids’ games often encouraged children to buy virtual items and blurred the lines between what costs virtual currency and what costs real money.
The FTC complaint highlights Amazon internal communications among employees, which said that allowing unlimited in-app charges without a password was "clearly causing problems for a large percentage of our customers," and added the situation was a "near house on fire."
In an Amazon letter sent to the FTC, it was indicated the FTC would like to come to the type of arrangement it did with Apple over a similar situation, the Los Angeles Times reported
Apple refunded $32.5 million to customers for mobile application charges.
Amazon told the Times that it has changed its buying process and offers refunds should children make mistakes buying within apps.
“Pursuing litigation against a company whose practices were lawful from the outset and that already meet or exceed the requirements of the Apple consent order makes no sense,” Amazon told the Times.
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