FTC Asks Amazon To Refund Illegal Games Purchases By Kids

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Federal regulators announced a lawsuit against Amazon accusing the retail giant of illegally charging parents for millions in gaming purchases by their kids.

The Federal Trade Commission says Amazon allowed kids to make purchases of virtual items like “coins” and “stars” in Kindle Fire games without their parents’ consent. It was a violation of federal law, while Amazon earned 30% on all such purchases.

The FTC complaint quotes internal Amazon communications in which employees raised concerns about allowing unlimited in-app charges without requiring a password.

Apple reached a settlement with the FTC over the same issue in January, agreeing to refund $32.5 million to parents whose kids made unauthorized purchases through iPhone and iPad apps. The company also settled a related class-action suit.

The FTC, however, doesn’t yet have an estimate for the total unauthorized charges in the Amazon case, but said the figure is in the millions of dollars. One woman, for example, told the agency that her daughter had racked up $358.42 in purchases without her knowledge.

The lawsuit seeks full refunds for all those affected. Amazon revised its policy on in-app purchases last month to require consent from account holders, the FTC said.

In a letter to FTC, Amazon said that the lawsuit was deeply disappointing. The company says it has already refunded some purchases following complaints from parents. Amazon claimed, its policy already meets the standards of the one Apple imposed following its settlement.

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