The Federal Trade Commission has filed a lawsuit against Amazon, alleging the online retailing giant billed parents for unauthorized in-app purchases made by children totaling millions of dollars.
In a statement released Thursday, the FTC claims Amazon allowed kids to make purchases within apps downloaded via mobile devices such as the Kindle Fire tablets without parental consent. The purchases would then be charged to the account holder without permission.
The FTC also says when Amazon started allowing in-app purchases in 2011, they did not implement measures such as password requirements to prevent kids from unknowingly racking up purchases on their parents' accounts.
"Even Amazon's own employees recognized the serious problem its process created," said FTC chairwoman Edith Ramirez in a statement. "We are seeking refunds for affected parents and a court order to ensure that Amazon gets parents' consent for in-app purchases."
Amazon could not be immediately reached for comment.
Last week, The Wall Street Journal reported Amazon was fighting back against the FTC's claims, stating in a letter that parental controls on their devices were "effective."
Many apps on smartphones and tablets include supplemental purchases users can make to enhance their experience. The transactions range from 99 cents to $100.
At issue are games or apps aimed at children that allow players to purchase virtual items. In some cases, children purchase the items unaware that they cost real-world money.
An example cited by the FTC details the case of a mother whose daughter acquired more than $350 in virtual goods without consent.
The FTC says in-app purchases are "final and non-refundable" by Amazon, with the company keeping 30% of transactions. The agency is pursuing a court order requiring Amazon to refund users for unauthorized purchases.
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