Amazon Begins Prime Refunds in $2.5B FTC Settlement

Amazon has begun distributing refunds to millions of eligible Prime subscribers in the United States as part of a $2.5 billion settlement with the Federal Trade Commission over allegations of deceptive enrollment and cancellation practices. The payments, which started arriving last week and will continue through December 24, 2024, stem from a lawsuit filed in 2023 accusing the company of signing up customers for the $139 annual Prime membership without their clear consent and then complicating the process to cancel.

Under the agreement, approved by a federal court in Seattle in September, Amazon will allocate $1.5 billion for consumer refunds, capped at $51 per person, while paying a $1 billion civil penalty to the government. The penalty marks the largest ever secured by the FTC in a case involving a violation of its rules, including the Restore Online Shoppers' Confidence Act. Amazon did not admit or deny the allegations but agreed to implement changes to its subscription processes, such as adding a clear and conspicuous button for customers to decline Prime enrollment and providing an easy cancellation method using the same steps as signup.