FTC suing Amazon for unauthorized in-app charges

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Federal Trade Commission today filed a lawsuit against Amazon that says the company billed parents for millions of dollars in unauthorized charges that were the result of children using mobile applications that were downloaded or purchased from Amazon’s Appstore.

FTC says no password or parental consent was required for purchases that were made by children who played games and bought virtual items such as acorns, coins and stars within the games. As a result, Amazon allowed children to spend unlimited amounts of money without parental involvement on the so-called in-app purchases, FTC says.

FTC consumer protection director Jessica Rich says “thousands” of consumers were affected, but she wouldn’t be more definitive. Rich also wouldn’t say how many millions of dollars consumers were charged.

Amazon didn’t respond to an email from Consumers Digest requesting comment.

FTC’s lawsuit seeks a court order that requires Amazon to refund consumers for the unauthorized charges and permanently bans Amazon from billing parents and other account holders for in-app charges without their consent.

The agency says Amazon in November 2011 introduced in-app purchases that didn’t require a password. In March 2012, Amazon updated its in-app billing system to require account owners to enter a password for purchases that cost $20 or more, FTC says. However, Amazon continued to allow children to make unlimited purchases of less than $20 without an account holder’s approval until June 2014.

Another app supplier, Apple, agreed in January 2014 to refund at least $32.5 million to consumers who had similar unauthorized charges that were the result of children using apps for iPads and iPhones.