Amazon Sued for Making It Way Too Easy for Children to Spend Money

Amazon is sued by federal agency over children making in-app purchases too easy.

Amazon has just faced a lawsuit by federal agency over letting kids make purchases too easily on mobile devices without their parents' approval. Photo: m.sinjela/Flickr

Amazon has just faced a lawsuit by federal agency over letting kids make purchases too easily on mobile devices without their parents’ approval. Photo: m.sinjela/Flickr

In a complaint that was filed Thursday, the Federal Trade Commission states that the retailing company has unlawfully charged customers millions of dollars for children’s’ “in-app purchases” – buying digital knickknacks while playing games or using apps on devices like Kindle Fire tablets – that were made without their parents’ or the account holders’ knowledge.

“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, reads.

The FTC has even calculated the average price of such purchases which appeared to be from 99 cents to $99.99 each.

The lawsuit says that making a purchase while playing a game or using an app was too easy, that’s why sometimes too young to even read, to amass charges on their parents’ accounts purchased something. It worths mentioning that Amazon receives 30 percent of the revenue from purchases made within apps.

FTC Consumer Protection Director Jessica Rich revealed to reporters that thousands of consumers had been affected and the unauthorized charges totaled in the millions of dollars.

“A central tenant in consumer protection is that you need to obtain consumer consent before placing charges on their bills,” she said. “That applies all places, from brick-and-mortar stores to app stores.”

“Even Amazon’s own employees recognized the serious problem its process created,” notes FTC Chairwoman Edith Ramirez . “We are seeking refunds for affected parents and a court order to ensure that Amazon gets parents’ consent for in-app purchases.”

“In many instances, parents have complained that their children could not or did not understand that their activities while playing the app could result in charges that cost real money,” the complaint says.

“Amazon has received thousands of complaints related to unauthorized in-app charges by children in these and other games, amounting to millions of dollars of charges.”

The retailing giant declined to comment on the issues itself and referred to a statement it made in a letter last week to the FTC, in which it called news of the impending complaint “deeply disappointing.”

“We have continuously improved our experience since launch, but even at launch, when customers told us their kids had made purchases they didn’t want we refunded those purchases,” wrote Andrew DeVore, vice president and associate general counsel at Amazon.

“[O]ur experience at launch was responsible, customer-focused, and lawful, including prominent notice of in-app purchasing, effective parental controls, real-time notice of every in-app purchase, and world-class customer service.”

The FTC lawsuit comes about a week after the agency filed suit against T-Mobile for allegedly placing hidden charges in customers’ bills.

“Companies need to get consumers’ consent before placing charges on their bills,” Rich said in prepared remarks during the press call. “This principle applies to companies of all types, from brick-and-mortar businesses to mobile app stores. And it applies to charges of all kinds, from purchases of physical goods to charges for the virtual items at issue in today’s action.”

Share this article

We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language, all capital letters or appear to be spam, and we review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Coinspeaker Ltd.