Amazon to Refund $70 Million to Parents for Childrens’ Unauthorized App Store Purchases


Amazon is finally ready to take some measure of responsibility for charging customers’ credit cards for their children’s purchases without their consent.

In 2014, both Google and Apple settled FTC complaints with payouts of $32 and $19 million, respectively, for similar purchases. Amazon, however, has been considerably more reluctant to do so. They have continued to challenge the Federal Trade Commission regarding the legitimacy of in-app “micro-transactions” made by children but charged to their unsuspecting parents.

The original FTC complaint protested the lack of safeguards preventing unauthorized users from making unlimited purchases. At the time, the FTC asserted that “Amazon’s in-app system allowed children to incur unlimited charges on their parents’ accounts without permission” and that “even Amazon’s own employees recognized the serious problem its process created.”

Despite Amazon’s rebuttals, a court agreed with the FTC in April 2016. And while Amazon has continued to appeal orders to refund customers until now, they seem to have finally owned up to their responsibility. Customers will be paid directly — the court also dismissed the notion that users might be refunded with Amazon gift cards.

The Federal Trade Commission seems to have been satisfied by the final result. Thomas B. Pahl, acting director of the FTC’s Bureau of Consumer Protection, said in a statement:

This case demonstrates what should be a bedrock principle for all companies — you must get customers’ consent before you charge them. Consumers affected by Amazon’s practices can now be compensated for charges they didn’t expect or authorize.

Amazon’s payout may come late, but it will dwarf both Google and Apple’s settlements combined. Roughly $70 million is expected to be in customers’ hands in the very near future, covering any potentially unauthorized Amazon Store payments made between 2011 and 2016.

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