On Wednesday, Amazon.com, Inc. (NASDAQ:AMZN) began issuing automatic refunds to millions of customers as part of a sweeping $2.5 billion settlement with federal regulators.
FTC Says Amazon Used Misleading Sign-Up Flows
The company was accused of misleading users into paid Prime memberships and making cancellations unnecessarily difficult.
The Federal Trade Commission alleged that Amazon relied on deceptive design practices to enroll customers in Prime without their clear consent and later complicated the process for canceling the subscription.
Regulators said Amazon must overhaul its enrollment and cancellation systems, including adding a more prominent and straightforward option to end a membership.
As part of the settlement announced earlier this year, Amazon must pay $2.5 billion, with $1 billion designated as a civil penalty and the remaining $1.5 billion allocated for customer refunds.
Eligible Prime Members Could Receive Up To $51
Refunds are now being sent automatically to qualified U.S. Prime members who signed up through disputed enrollment flows or attempted to cancel between June 23, 2019, and June 23, 2025.
Customers must also have used fewer than three Prime benefits within one year after joining to receive a refund.
The FTC said eligible users will get back actual membership fees paid, up to a maximum of $51, minus any prior credits or refunds.
According to the agency, customers will have 15 days to accept the payout through PayPal or Venmo.
Those who ignore Amazon's email will automatically receive a paper check mailed to their default shipping address, noted The Hill.
Amazon Responds, Says It Has Always Followed the Law
In a previous statement, Amazon said its executives have consistently complied with legal requirements and that the settlement allows the company to move forward.
The company said it works "incredibly hard" to make Prime enrollment and cancellation clear and to provide strong value to members, adding that it plans to continue improving the service.
Refund distribution will continue through Dec. 24 and a broader claims process for additional customers is expected to launch next year, according to the FTC, the report noted.
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