10 july 2014

The agency is asking the court to force Amazon to refund parents for virtual goods their kids bought before passwords were required.

The Amazon Appstore on a Kindle Fire. Screenshot by CNET

The Federal Trade Commision has filed suit against Amazon, alleging that the company illegally billed parents for “millions of dollars” in unauthorized in-app charges made by children through mobile devices.

The FTC’s complaint, filed Thursday, asks the court to force Amazon to refund the money to those customers. In-app purchases typically involve virtual goods bought within an app, like extra coins or energy in a game, according to the FTC. Some bills totaled hundreds of dollars, and some virtual goods cost as much as $99.99.

When Amazon launched in-app purchases in late 2011, the store did not require password requirements for purchases, allowing kids to purchase items without restraint, the agency said in a press release. Now, however, passwords are required.

“Amazon’s in-app system allowed children to incur unlimited charges on their parents’ accounts without permission,” FTC Chairwoman Edith Ramirez said in the release. “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.”

When the FTC initially alerted Amazon to its allegations, the company said in a letter last week that it would fight the agency in court, saying ,”we have consistently improved the customer experience in response” to consumer complaints over in-app purchases. Amazon said it was standing by the previous statements made in the letter.

Source: http://www.cnet.com/news/ftc-amazon-cost-parents-millions-in-accidental-app-purchases/