(NEXSTAR) — Over a month ago, Amazon settled for $2.5 billion after the Federal Trade Commission (FTC) claimed that the retailer employed “deceptive methods” to sign up millions of customers for paid Prime memberships.
So, when can you expect your share of that settlement?
Well, that really hinges on your eligibility. Fortunately, the federal agency has shared some details on when payments will be made.
Here’s what you should know:
What is the $2.5 billion settlement?
The FTC’s charges consist of two primary claims. First, they alleged that Amazon enrolled “millions of consumers” in Prime without their consent, and second, they claimed that Amazon “intentionally made it difficult for consumers to cancel.”
As per the FTC’s announcement in September, Amazon is required not only to pay over $2.5 billion but also to rectify its subscription and cancellation practices for Prime. This includes making a “clear and prominent button” for customers opting out and removing the “No, I don’t want free shipping” option. Additionally, Amazon must provide clear information about Prime pricing during sign-up, detailing billing frequency, auto-renewal policies, and cancellation procedures.
There were also allegations against various Amazon executives for misleading customers, violating both the FTC Act and the Restoring Online Shopper Confidence Act (ROSCA).
In a statement, Amazon asserted, “Our executives have always complied with the law, and this settlement allows us to move forward and focus on innovation for our customers.”
How much of the $2.5 billion settlement will I receive?
This really depends on your eligibility. However, it’s important to understand that not all of the $2.5 billion is available for refunds to affected customers.
The FTC indicates that $1 billion will be allocated to civil penalties, while $1.5 billion will be set aside for consumer refunds. There are three criteria you need to satisfy.
First, you must be a US Prime member. Second, you should have signed up for Prime through Amazon’s “Challenge Registration Flow” (which includes several specified registration methods) or have tried to cancel your subscription without success. These actions must have occurred between June 23, 2019, and June 23, 2025. Lastly, you should have used Prime less than three times in a year after becoming a member.
If you meet these conditions, you could receive a refund on your subscription fee, capped at $51, according to the FTC.
Do I need to apply to receive a refund?
At this point, no application is necessary.
The FTC has stated that Amazon will automatically issue refunds by Christmas Day this year.
The actual billing process for eligible customers is expected to start next year, but more details on this have yet to be shared.
If you believe you qualify, you’ll need to wait until December 25th to find out whether you’ll receive a payment or a notification from Amazon regarding your refund. Alternatively, if you don’t qualify, you might have to wait until the application process begins.
In the meantime, Amazon is facing another lawsuit. Recently, two individuals filed against the company for allegedly misleading customers with “fake sales” during Prime Day.
A spokesperson for Amazon declined to comment on this new lawsuit when approached.
