Amazon ordered to refund parents for their kids' in-app purchases
Hey, parents! Remember that time you had to sell the house because your kid spent all your money buying pretend farm animals or bubbles or whatever on their Kindle Fire? Well, we have good news for you: A federal judge has ordered Amazon to pay you back for those in-app purchases.
On Thursday, U.S. District Judge John Coughenour in Seattle ordered the online messiah to establish a yearlong process by which it would repay any parents whose children spent money on in-app purchases without their permission.
According to the FTC, some of the kid-friendly games available on Amazon's app store were marked as "free," but since they had to be connected to an Amazon account in order to be downloaded, that meant they were also connected to the credit card associated with that Amazon account. Yup, once your kid downloaded a "free" game, they also had access to your credit card. "Amazon chose to set up the payment process [so that] kids could incur charges without their parents' knowledge," wrote the FTC on their website. The total cost of all those charges? Over $86 million.
To their credit, once Amazon learned internally that this was happening, they also freaked the eff out. One employee said in an email that this was "clearly causing issues for a large percentage of [Amazon's] customers." So they went about trying to fix it, and by 2013, set up the system so that a password was required for any in-app purchases. This was almost a great idea, except for two fatal flaws. First, the password was only required for purchases over $20, and second, after a purchase, there was a 15-minute "put it on my tab" window during which purchases could be made without a password.
Oh, Amazon. Your heart was in the right place, but apparently, you have never met children before. Do you have any idea how much money a kid can rack up in 15 minutes of 99-cent purchases? We bet there's a family living under a bridge somewhere that can tell you.
Amazon will start setting up a method for identifying and notifying parents who are eligible for a refund in early 2017. And in case you were wondering, that refund won't be coming in the form of a gift card — Amazon asked, and the judge said no.