FTC Sues Amazon Over In-App Purchases by Children

July 15, 2014, Written By Bill Hardekopf
FTC Sues Amazon Over In-App Purchases by Children

The Federal Trade Commission is suing Amazon on behalf of parents who were charged for purchases their children made without their permission.

The lawsuit claims Amazon allowed kids to rack up millions of dollars in transactions through their platform without their parent’s consent. The company did not have a password protection setup that would allow parents to decide whether they wanted their children to purchase a certain item or app from their phones.

Most of the purchases in question were made through mobile apps like “Tap Zoo” and “Ice Age Village.”

Children can easily click on the ads that appear, and then go through an Amazon payment system to order what they want. The parents have no idea this has occurred until the bill appears.

Initial purchases are password protected, but then the account remains open for an hour for additional purchases. This is when the purchases in question take place.

“Amazon’s in-app system allowed children to incur unlimited charges on their parents’ accounts without permission,” said FTC Chairwoman Edith Ramirez. “Even Amazon’s own employees recognized the serious problem its process created. We are seeking refunds for affected parents and a court order to ensure that Amazon gets parents’ consent for in-app purchases.”

Apple recently underwent similar charges in January, and agreed to pay $32.5 million in refunds to fix the problem. Amazon is planning to fight the lawsuit in court.

The information contained within this article was accurate as of July 15, 2014. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.

About Bill Hardekopf

Bill Hardekopf is the CEO of LowCards.com and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.
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