Prime packages being delivered in New York City on July 6, 2024. Photo by Beata Zawrzel/NurPhoto/Getty Images
As reported by CNN
Amazon will soon pay refunds to a portion of Prime program participants as part of a settlement with the Federal Trade Commission (FTC) totaling $2.5 billion. More than $1.5 billion will go specifically to customers. This marks the FTC’s largest regulatory settlement in history and one of the most significant restitution cases in regulatory history.
The FTC said in a press release that Amazon used enhanced subscription traps to mislead online shoppers during sign-ups for Prime services. The settlement ends a two-year dispute over whether the company manipulated its practices to lure consumers into a subscription and make cancellation harder.
According to FTC estimates, about 35 million customers may have been harmed by deceptive Prime sign-up practices and may be eligible for compensation.
Who is eligible for refunds
Rights to a share of the settlement go to any users who subscribed to Amazon Prime or “not successfully canceled” their subscription in the United States between June 23, 2019, and June 23, 2025.
Customers who used “no more than 3 Prime benefits” within a year from the date of signup and went through a “complex registration flow” will receive automatic refunds from Amazon. Under the FTC’s final order, users who are eligible for refunds registered via the Universal Prime page, the delivery options page, Prime Video, or a one-page checkout.
Automatic payments will be issued in the first period after the FTC order – usually within 90 days. They will refund amounts not to exceed the total dues paid for the membership, but not more than $51.
Anyone who files a valid claim through Amazon and is approved may also receive up to $51.
Claims for accidental sign-ups will be paid after automatic payments, in the total amount of dues paid (up to $51) during the Prime subscription.
Prime subscribers who could not cancel the subscription will receive a payment in the next group equal to the total dues paid, but not more than $51.
If remaining funds prove insufficient to cover all claims, payments will be made pro rata: taking into account the total amount to which claimants were entitled and the number of Prime benefits used. This means many customers may receive less than the maximum amount or even less than what was anticipated under the settlement.
While the official site with claim filing details and other information has not yet been published, it is important to monitor the regulator’s and the company’s official announcements regarding when the claims service will launch and the next steps.
The settlement provides that within 30 days after the automatic payments finish, all eligible claimants will be notified by email and by mail.
Claimants with eligible claims will have up to 180 days to submit a claim to Amazon via email, pre-paid mail, or the settlement site.
Amazon has stated that the company and its leadership “always comply with the law.”
“We are doing a tremendous amount of work to make signing up for or cancelling a Prime membership clear and simple for customers, and to provide significant value to millions of loyal Prime members around the world. We will continue in this direction and look forward to what Prime will bring to customers in the future,” the company added.
“Amazon used sophisticated subscription traps to mislead online shoppers during Prime sign-ups”
“We are extremely committed to making Prime sign-up or cancellation clear and understandable for customers, and to delivering significant value to millions of loyal Prime members around the world. We will continue in this direction and look forward to what Prime customers expect in the years ahead.”
As this settlement concludes, it remains important to closely monitor the FTC and Amazon’s official announcements, as payout details and claim filing requirements may be clarified in the coming months.
