U.S. Government Sues Amazon For Letting Kids Use Money on Apps

Jul 12, 2014 08:47 AM EDT | Matt Mercuro

The U.S. government sued Amazon.com this week for letting kids run up millions of dollars in purchases on the credit cards of unsuspecting parents while they played mobile apps like "Ice Age Village" and "Tap Zoo."

The lawsuit was filed by the Federal Trade Commission. It seeks to make the online retail store refund money that was spent without parental permission and to end the company's practice of allowing purchases without requiring passwords or any other mechanism that allows parents total control over their accounts.

Unauthorized charges are often linked to children's apps, like games, that can be free to download but requires players to make in-app purchases by buying "coins" and other digital products with a credit card synced with a device, the FTC said this week in a complaint.

Games listed in the complaint included "Tap Zoo" and "Ice Age Village," which allows kids to manage a zoo or ancient town. In order to do that though, they can buy digital items, some of which cost real money.

One users put a review on Amazon.com back in July 2013 claiming that "Tap Zoo" was a "cash trap" and that his son spent at least $65 on it without permission.

The apps run on Amazon's Kindle Fire, Kindle Fire HD and devices that run on Google's Android operating system, according to Reuters.

The FTC recently settled a similar case with Apple earlier this year, in which Apple agreed to refund customers approximately $32.5 million in unauthorized charges made by kids and to change its billing procedures.

Apple now requires consent from parents for in-app spending.

In the letter, Amazon Vice President and Associate General Counsel, Andrew DeVore, protested the FTC's threat to file a lawsuit against the company if it did not agree to a consent order similar to the one it reached with Apple back in January.

DeVore added that the FTC threat to sue "leaves us no choice but to defend our approach in court."

Some parents claim their kids spent hundreds of dollars on games without their permission. Amazon bills for the in-app purchases, and keeps 30 percent of all charges. 

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