FTC: Amazon Billed Parents Millions for Kids' Unauthorized App Buys

The Federal Trade Commission has filed a lawsuit against Amazon demanding refunds for parents billed for millions of dollars in app purchases.

The FTC alleges that Amazon profited from charging parents for unauthorized in-app purchases their children made. If the FTC wins its lawsuit, Amazon will have to refund the money it made. It would also face a permanent ban from billing parents for purchases made by their children without their permission.

"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."

The FTC's statement about the case makes it clear Amazon had knowledge this was a problem:

The complaint highlights internal communications among Amazon employees as early as December 2011 that said allowing unlimited in-app charges without any password was "…clearly causing problems for a large percentage of our customers," adding that the situation was a "near house on fire."

Amazon changed its in-app purchasing framework in June 2014 to prevent unauthorized charges, but the FTC wants to help parents get their money back for all of the bills their kids racked up trying to beat games like "Ice Age Village."

This is the FTC's second time pursuing a refund for parents who didn't authorize in-app purchases. Earlier this year, Apple settled a similar complaint for $32.5 million.

Amazon recently responded to the complaint with a letter to Ramirez expressing disappointment at the FTC's decision to file charges. You can read the whole letter here:

Amazon's Letter to Honorable Edith Ramirez