Amazon to Refund $70M to Parents Whose Kids Made Unauthorized Purchases

Amazon to Refund $70M to Parents Whose Kids Made Unauthorized Purchases
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Editor’s Note: Amazon has released new information on how to receive your refund. If you’re eligible for a refund, you should have received a direct email from Amazon on May 26, 2017. You can also log into your Amazon account and access information about requesting a refund under the “Important Messages” tab. This post originally ran April 5, 2017.

Here’s a move that’s straight out of the Overwhelmed Parent 101 playbook. Your kid is having a fit. A full-blown tantrum. You don’t have time for this. You hand your unruly child a tablet to play with. Problem solved — at least in the short term.

Hey, I’m not criticizing. I’ve done this way too many times myself.

Your tablet will come back smudged with fingerprints — and possibly loaded up with in-app purchases that your click-happy kid agreed to.

Now, Amazon has agreed to refund up to $70 million worth of in-app purchases children made without their parents’ consent.

That’s right, Junior! I’m getting back all that cash you spent on upgrades for Tiny Monsters on my Kindle Fire!

Last year, a federal court found that Amazon had billed consumers for unauthorized in-app charges incurred by children using mobile apps, such as online games downloaded through Amazon’s app store.

The court found that Amazon didn’t clearly inform parents that free apps could include in-app purchases, and it didn’t provide enough notice or password requirements to prevent kids’ unapproved purchases.

Amazon initially appealed the ruling, but later dropped the appeal, paving the way for the refunds.

If Amazon charged you for an in-app purchase your kids made between 2011 and 2016, you could be eligible for a refund.

It’s unclear exactly how Amazon will reimburse customers. The courts rejected its request to issue refunds via gift cards, so it’s expected to issue refunds directly to customers’ debit or credit cards, or with checks.

In a similar case from 2014, Apple emailed and sent postcards to every customer who might have been affected. Apple issued refunds to 37,000 customers.

If you think you might be in line for a refund, be on the lookout for a message from Amazon.

Apple and Google Have Run Into the Same Problem

“This case demonstrates what should be a bedrock principle for all companies — you must get customers’ consent before you charge them,” said Thomas B. Pahl, acting director of the FTC’s Bureau of Consumer Protection. “Consumers affected by Amazon’s practices can now be compensated for charges they didn’t expect or authorize.”

Amazon isn’t the only app provider to get hit with a case like this.

In 2014, Apple and Google settled similar cases with the FTC over unauthorized in-app purchases for $32.5 million and $19 million, respectively.

Amazon’s app store comes pre-installed on some Kindle tablets and Android device owners can download it.

Parents complained that it was too easy for their kids to make digital purchases on Amazon apps without permission.

At first, Amazon didn’t warn customers about the existence of in-app purchases at all. Eventually, it presented smaller notices and occasionally required a password, but the FTC said that wasn’t enough. Later, Amazon started presenting a pop-up requiring authorization when making an in-app purchase, satisfying the FTC’s authorization requirements.

Your Turn: Have your kids ever made in-app purchases without your permission?

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. His two children LOVE in-app purchases.