Amazon has begun issuing automatic refunds as part of a settlement related to a substantial $2.5 billion agreement with the Federal Trade Commission (FTC). This settlement, reached on September 25, 2022, wrapped up a two-year civil suit where Amazon was accused of employing deceptive practices to mislead consumers into signing up for Prime subscriptions.
According to the FTC, Amazon’s tactics included utilizing misleading user interfaces that made it difficult for consumers to decline Prime membership clearly. The settlement mandates that Amazon must pay a $1 billion civil penalty and provide $1.5 billion in refunds to affected consumers. In addition, Amazon has agreed to cease unlawful practices related to subscriptions and cancellations concerning Prime memberships.
As part of the settlement, Amazon is now required to implement various measures aimed at enhancing consumer awareness and consent. This includes introducing a clear option for customers to decline Prime at the checkout, abandoning the misleading “No, I don’t want Free Shipping” button. Customers will also see improved disclosures detailing the costs, renewal terms, and cancellation processes directly during the enrollment.
Refund distributions commenced in November, with the final checks sent by December 24. Eligible Prime subscribers who enrolled between June 23, 2019, and June 23, 2025, could receive refunds of up to $51. Refunds will be distributed in two phases: the first phase will involve automatic payments to those who qualify, while the second phase requires consumers to submit a form after the initial round of payments.
It’s noteworthy that the eligibility criteria are specific; customers must have enrolled through Amazon’s “Single Page Checkout” and have attempted to cancel their Prime membership during this period or enrolled through a problematic sign-up flow. Additionally, eligible customers must have utilized four or fewer Prime benefits in the last six years.
This settlement not only provides financial relief to consumers but also enforces stricter accountability on Amazon, promoting transparency during the signup process. As the company implements these changes, it hopes to restore trust with its customer base and ensure that future practices align more closely with consumer protection standards. The proactive steps taken could mark a shift towards improved relations between Amazon and its subscribers, demonstrating a commitment to responsible business practices.