Amazon $2.5B settlement over Prime subscriptions: When will payments be sent?
(NEXSTAR) – It’s been more than a month since Amazon reached a $2.5 billion settlement after the FTC accused the online retailer of using “deceptive methods” to sign up millions of customers for paid Prime subscriptions.
So when will you receive your part of the settlement?
Ultimately, it depends on whether you qualify or not. However, the federal agency has indicated when payments might be distributed.
Here’s what you should know.
What is the subject of the $2.5 billion settlement?
The FTC’s accusation is twofold: First, Amazon signed up “millions of consumers” for Prime subscriptions without their permission, and then it “intentionally made it difficult for consumers to opt out.”
According to an FTC announcement in September, not only will Amazon have to pay more than $2.5 billion (more on that in a bit), but the company must “cease Prime’s illegal enrollment and cancellation practices.”
This includes creating a “clear and conspicuous button for customers to decline Prime” and eliminating the “No, I don’t want free shipping” button. Amazon also needs to specify the cost of Prime during the signup process, as well as the date and frequency of when the customer will be charged, whether it will automatically renew, and how to cancel.
Multiple Amazon executives have also been charged with intentionally misleading affected customers and violating the Federal Trade Commission (FTC) and the Restoring Online Shoppers’ Confidence Act (ROSCA).
“Amazon and our executives have always followed the law, and this settlement allows us to move forward and focus on innovating for customers,” the company said in a statement last month. “We work incredibly hard to make it clear and simple for customers to sign up or cancel their Prime membership, and to deliver great value to millions of loyal Prime members around the world. We will continue to do that, and look forward to what we will offer members Prime in the coming years.”
How much will I get from the $2.5 billion settlement?
This depends on whether you qualify, but first, it’s worth noting that the $2.5 billion settlement amount will not be fully returned to affected customers.
The FTC says $1 billion will go toward a civil penalty, leaving $1.5 billion to repay consumers. There are three requirements you must meet to qualify for any portion of these funds.
First, of course, you must be a Prime member in the U.S. Second, you must either sign up for Prime through Amazon’s “Defiance sign-up flow” (including signing up through the Prime global decision page, shipping choice page, one-page checkout, or Prime Video sign-up flow) or attempt but fail to cancel your subscription — which must happen between June 23, 2019 and June 23, 2025. Finally, you had to use fewer than three Prime benefits — like Prime Music or Prime Video — during any one-year period after you became a Prime member.
If you meet all three criteria, you may receive a refund of your subscription fee, although the FTC says this will be capped at $51.
Do I need to apply for a refund?
At the moment, no.
According to the FTC, refunds will be automatically sent by Amazon no later than Christmas Day this year.
The FTC says that next year, it will begin the claims process for eligible Prime customers. Additional details about this process have not been published yet.
Ultimately, if you think you’re eligible, you’ll have to wait until December 25 to find out if you receive a payment or receive a notification from Amazon about your refund. Otherwise, you will likely have to wait for the claims process to open.
Meanwhile, Amazon is already facing another lawsuit. Last week, two people filed a lawsuit against the retailer for advertising “fake sales” and misleading customers during Prime Day events.
A spokesperson declined to comment on the lawsuit when contacted by Nexstar.
Nexstar’s Jeremy Tanner contributed to this report.
