Amazon Ordered to Refund Parents Millions of In-App Purchases Made by Kids
A Seattle judge just ordered the ecommerce giant to set up a notice-and-claims process in 2017.
Ever been on the receiving end of a staggering credit card bill, only to realize your kid had racked up hundreds of dollars while playing games like Pet Shop Story and Ice Age Village on their mobile device? I have. And it sucks.
Luckily, these kinds of in-app purchases made by kids too young to know better may now be a thing of the past. Because according to Reuters, a Seattle court has just ordered Amazon to pay back millions of dollars to parents like me, whose kids spent big bucks for in-app purchases on their mobile devices without our permission. YASSSS!
The problem started back in 2011, when the online retailer first rolled out in-app purchases without any password protection or other safeguards in place to stop kids from making unauthorized buys. It was as simple as clicking a button.
In a lawsuit filed against Amazon in 2014, the FTC (which has already settled similar cases against Apple and Google) estimated that of the $86 million generated by in-app purchases in the Amazon app store, almost half—42 percent!—had been made by kids without parental consent. Yikes!
"Amazon's in-app system allowed children to incur unlimited charges on their parents' accounts without permission," the FTC said at the time. And while Amazon maintained it was adding safeguards and making refunds where applicable, the court sided with the FTC when it deduced that the retailer's procedures for informing its customers about in-app charges were not sufficient.
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The new order from U.S. District Judge John Coughenour calls for Amazon to set up a notice-and-claims process beginning in early 2017 to alert parents of their eligibility for refunds. "It accomplishes the goals of placing liability on Amazon," Coughenour explained, "and refunding eligible customers."
Great news! Now if only I could convince them it was my 10-year-old who bought and watched all five seasons of The Americans at $29.99 a pop...