Amazon To Refund Millions In Unauthorized In-App Purchases

The Federal Trade Commission sued Amazon and other companies after children racked up millions of dollars of in-app purchases without their parents' knowledge. The FTC and Amazon have dropped appeals.

DAVID GREENE, HOST:

You probably feel like sometimes you are literally living on your smartphone or tablet. You're catching up on the news, maybe you're playing some games.

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UNIDENTIFIED VOICE: Tasty.

RACHEL MARTIN, HOST:

Tasty.

GREENE: (Laughter) That is from Candy Crush, which, like a lot of other games, you can download for free.

MARTIN: Yeah. You can download for free. But then many games ask if you want to pay to get more features. Those are called in-app purchases. And Julie Comeaux made one of these when her young daughter got a Kindle for Christmas.

JULIE COMEAUX: It's not something we were familiar with, but we made an in-app purchase for $5.

MARTIN: Comeaux says she gave Amazon her password to make that first purchase. But here's where things went really wrong - she left the Kindle with her daughter.

COMEAUX: When we checked the account and we saw hundreds of charges from Amazon. It totaled near $10,000.

GREENE: Ten thousand dollars all racked up by Comeaux's daughter without having to ever type in the password again.

COMEAUX: She cried. She cried. I had to calm her down. But yeah, she was very upset, didn't know she was spending real money.

MALINI MITHAL: Within these apps, it can be very confusing to determine, particularly for a child, whether you're buying something that really costs money.

GREENE: That is Malini Mithal of the Federal Trade Commission. After complaints from Julie Comeaux and other customers, the FTC sued Amazon and Google and Apple over these in-app purchases.

MARTIN: Google and Apple both settled three years ago before the case went to court and agreed to give refunds. This week, Amazon and the FTC dropped their appeals cases in federal court. The company will now have to notify every single person who made an in-app purchase.

MITHAL: Then those parents or account holders can confirm that these were charges that they didn't authorize and get a refund.

MARTIN: The FTC says Amazon may refund as much as $70 million in unauthorized charges. And details of how that process will work are expected to come soon.

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