FTC Sues Amazon for Letting Kids Spend Parents’ Money

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The Federal Trade Commission says the online retailer has billed parents for millions of dollars of unauthorized app purchases by their children.

It’s too easy for kids to use mobile devices to make app purchases on Amazon without their parents’ permission. That’s the basis of a Federal Trade Commission lawsuit filed this week against the online retail giant.

The FTC said Amazon has allowed millions of dollars of unauthorized purchases by children through its app store. According to The Huffington Post:

“In total, parents and other Amazon account holders have suffered significant monetary injury, with thousands of consumers complaining about unauthorized in-app charges by their children, and many consumers reporting up to hundreds of dollars in such charges,” the lawsuit, filed in the U.S. District Court for the Western District of Washington, contends.

In-app purchases allow customers to purchase virtual items – like coins, stars, extra levels or songs, or game hints – within a free or paid game or app. However, it can sometimes be difficult to decipher whether the items cost real dollars or virtual game currency, especially for children.

In-app purchases cost between 99 cents and $99.99, HuffPo said. Amazon keeps 30 percent of revenue from in-app charges.

Amazon began billing for in-app charges in November 2011, the complaint said. However, according to The Wall Street Journal, it wasn’t until June 2014 that Amazon required consumers’ informed consent on its newer devices for all in-app purchases.

The FTC is seeking an undetermined amount in refunds from the online retailer, as well as a requirement that Amazon gets informed consent from parents before kids can make in-app purchases. According to the WSJ, Amazon told the FTC it wouldn’t agree to tighter controls. The Journal wrote:

Amazon associate general counsel Andrew DeVore said in a letter to the FTC that Amazon’s practices “were lawful from the outset and … already meet or exceed the requirements of the Apple consent order.” Amazon declined to comment beyond the letter.

Earlier this year, we told you that as part of a settlement with the FTC, Apple agreed to refund a minimum of $32.5 million to customers after children racked up millions of unauthorized in-app purchases. Apple also agreed to revise its billing practices to ensure that in-app purchases had informed consent from consumers.

I have a friend whose 7-year-old son used his Kindle Fire to rack up hundreds of dollars of in-app purchases on Amazon without her knowledge. She didn’t dispute the charges with Amazon, but she did have a serious discussion with her son about making in-app purchases on Amazon without asking her permission first.

Has your child made app purchases without your consent? Share your experiences below or on our Facebook page.

Stacy Johnson

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