FTC Sues Amazon for Letting Children Make Purchases on Parents' Devices - The UpStream

FTC Sues Amazon for Letting Children Make Purchases on Parents' Devices

posted Sunday Jul 13, 2014 by Nicholas DiMeo

FTC Sues Amazon for Letting Children Make Purchases on Parents' Devices

Remember last year when Apple had to shell out million to customers who weren't watching their kids make purchases on their iPhones? Well, Amazon is in a similar boat this year as the Federal Trade Commission has gone after Amazon for "unlawfully billing" parents for app purchases made by children. It seems that a regulatory group is now stepping in to protect parents from supervising children on their devices.

The FTC says there are currently no passwords or PINs are required for children to make purchases on the Amazon app store. Consumer protection director for the FTC, Jessica Rich, had this to say on the matter.

Many millions were spent on unauthorized charges. This is about the age old principle of consumer protection. We plan to obtain refunds and put it back in consumer's pockets. We're now headed to court.

The FTC further alleges that Amazon had knowledge of this and did not do a thing about it until the agency confronted Amazon with its policies. The Commission also added that many customers contacted the FTC to complain about these "unauthorized" charges. No word on how many complained nor when the investigation began.

Rich continued by saying that, "If you feel you've been had and want a refund contact the FTC."

Let me add some clarification here. There's no unauthorized charges taking place. Parents are complaining because their kids made purchases and they didn't watch over the things happening on these devices that cost hundreds of dollars.

Granted, similar to Apple's hand being forced in the same case after the ruling, Amazon does not have a PIN or password in place for in-game purchases, so kids can tap at-will and ring up charges as they please. And, like Apple, I can see that changing here, too. What's interesting here is the FTC has been investigating for a while and has actually caught Amazon employees acknowledging that there are no safeguards and not doing anything about it for years. Again, perhaps they figured that parents would be cautious on giving their kids a device connected to both the Internet and their bank account, but I'm afraid we probably can't make that assumption anymore.

In the end, this case will probably end just like the Apple one. Parents complain because their children charged their credit card on in-app digital goods and currency and the businesses did nothing to protect them. But in the same breath they complain that they don't want businesses snooping and watching over them.

I will end this piece by saying that the Windows Phone team thought ahead and all apps require a PIN or password before being able to make any purchases during any part of installing or using an app. And Microsoft didn't have to go through a lawsuit or an FTC investigation to make that decision.


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