Amazon bills parents millions for in-app purchases made by kids

Amazon.com has billed parents for millions of dollars' worth of unauthorised in-app purchases made by their children, according to a FTC complaint filed in a US court yesterday.

The FTC's lawsuit, filed in US District Court for the Western District of Washington, sought a court order requiring that Amazon.com refund parents for unauthorised purchases made by their children.

The FTC further wanted the court to ban the company from billing parents and other account holders for in-app charges without their consent, according to the agency's press release.

Amazon.com kept 30 per cent of all in-app charges, the FTC said in its complaint. According to Jessica Rich, director of the FTC's Consumer Protection Bureau, the Amazon case highlighted a central tenet of consumer protection laws in the US, that companies should get customer permission before charging them.

Amazon, in a letter to the FTC 1 July, said it was ''deeply disappointed'' that the agency was moving toward filing a lawsuit. ''We have continuously improved our experience since launch, but even at launch, when customers told us their kids had made purchases they didn't want we refunded those purchases,'' wrote Andrew DeVore, Amazon's associate general counsel.

In the complaint, the FTC alleged that thousands of parents - including one consumer whose daughters racked up $358 for in-game charges had fallen victim to a system that allowed charges without any step "that requires a password to validate payment information."

The FTC was seeking a court order requiring Amazon to refund customers for "millions of dollars" in unauthorised charges and to ban the company from billing parents for in-app charges made by children without parental consent.

The complaint said many of the kid-friendly games and apps on Amazon mobile devices such as the Kindle Fire encouraged children to pay for virtual in-game items with real-world money, usually connected to their parent's credit card.