The U.S. government sued Amazon.com on Thursday for allowing children to collectively run up millions of dollars in purchases on the credit cards of their unsuspecting parents while taking on mobile apps like “Tap Zoo” and “Ice Age Village.”
The suit, charged by the Federal Trade Commission, seeks to get to the online retailer refund money spent without parental permission and to end the Amazon’s practice of allowing purchases without needing a password or other mechanism that gives parents control over their accounts.
The unauthorized charges are frequently connected with children’s apps, such as games, that can be free to download but allow players to induce in-app purchases by buying “coins” or other digital products with the credit card associated with the device, the FTC said in its complaint.
The FTC complaint cited “Tap Zoo” and “Ice Age Village” in which children manage a zoo or an ancient town. To manage that, they can purchase digital items that often cost real money.
A user puts a reviewatn Amazon.com on July 2013 complaining that “Tap Zoo” was a “cash trap” and supposed his son spent $65 on it without permission.
The game currently tells parents how to disable the purchasing function.
The apps run on Amazon’s Kindle Fire, Kindle Fire HD and devices that use Google’s Android operating system.
The FTC settled a similar lawsuit with Apple Inc in January. Apple agreed to refund to customers at least $32.5 million in unauthorized charges made by children and to change its billing practices to take consent from parents for in-app spending.
Amazon declined comment, and referred reporters to a letter that its vice president and associate general counsel, Andrew DeVore, wrote to FTC Chairwoman Edith Ramirez dated July 1.
In the letter, DeVore protested the FTC’s threat to file a lawsuit against the company if it did not correspond to a consent order along the communication channels of the one reached with Apple in January.
DeVore also said the FTC threat to sue “leaves us no option but to maintain our approach in court.”
The FTC alleged in its lawsuit that Amazon responded to complaints about unauthorized charges by requiring passwords for large purchases in 2012.
That was offered to all purchases in 2013, but once a password has been entered, a purchase window remains open for up to an hour, meaning that further charges could be made without parents’ knowledge, the complaint stated.
The complaint quotes an Amazon official as saying in brief after the program began: “We think that parents are shut out from the buying procedure for these apps.”
Some parents read their children spent hundreds of dollars without their knowledge, the complaint stated.
Amazon bills for the in-app purchases and holds back 30 percent of the complaints, the complaint added. Amazon.com shares were down 0.7 percent at $327.48 in afternoon U.S. trading