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Amazon Settles FTC Case Over Kids' Unauthorized In-App Purchases for $70M

By George Khoury, Esq. on June 02, 2017 | Last updated on March 21, 2019

Did your kids go crazy making in-app purchases on an Amazon device without you finding out until the credit card bill showed up? Well, good news! Amazon has finally agreed to a settlement in the case brought against them by the FTC in 2014 for failing to safeguard users from unauthorized purchases. It is estimated that there were $70 million in unauthorized in-app purchases.

Soon after in-app purchases became a "thing," parents were subjected to shock, at random, in the form of unexplained credit card charges due to a lack of restrictions on in-app purchases. Both Apple and Google settled similar claims almost immediately in 2014 and implemented changes to safeguard against unauthorized in-app purchases.

What's an In-App Purchase?

On most new digital devices, software developers can submit programs, including games, news readers, social media, entertainment media, tools, and more, to be made available for purchase or free download on what's called an app store, or app marketplace. The programs themselves are called apps. However, many of these apps, contain additional content or features that can be added into the app for an additional price. These extras are the "in-app" purchases.

What's an Unauthorized In-App Purchase?

Basically, when a consumer purchases something using their phone, or any other form of electronic payment, including a credit card, it is only considered valid if the actual individual consents to, or authorizes, the purchase (that's why you have to sign your credit card slips).

What happened to Amazon, Google, and Apple was that parents set up accounts so that their children could use the devices. However, the devices initially lacked strong enough controls to prevent the children from then making purchases without their parent's consent. What's more is that many free to download apps allowed users to make repeated in-app purchases, which often make games easier or provide other benefits. In-app purchases can range in value from a single dollar to over $100.

That Happened to Me! Where's My Refund?

If you realize that your kid made those unexplainable charges appear on your credit card while using an Amazon device, you can apply directly to Amazon for a refund. The window for claims is rather large and stretches from 2011 to 2016.

The deadline for submitting claims is May 28, 2018.

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