The latest class action lawsuit against online retail giant, Amazon.com, calls into question one of the company’s biggest and most recognized draws – Amazon Prime. Class members of the lawsuit allege that Amazon wrongfully charged them for Amazon Prime memberships and engaged in false advertising of its services. This is not the first time that Amazon has been sued in connection to its Prime memberships, and the current lawsuit suggests that there may be more to come.
The Lawsuit’s Allegations
Amazon Prime is a membership program that offers various perks to its members – most notably, free two-day shipping. Amazon Prime members pay $99 each year for the services, which also includes video and music streaming, photo storage, and early access to deals and sales. As a promotion for the program, Amazon offers a 30-day free trial. But at the end of the free trial, customers will be automatically charged the annual membership fee unless they cancel in advance.
The recent class action lawsuit filed earlier this month against the company consists of a group of Amazon customers from California and Texas alleging that they were deceived into paying for unwanted Prime memberships. The plaintiffs in the suit allege that they purchased products from Amazon and unbeknownst to them, were charged for Prime memberships for years without their knowledge or consent. Once the plaintiffs discovered the unauthorized charges to their accounts, they allege that Amazon refused to provide refunds. According to the complaint, Amazon represented to its customers that they would not be charged for the Prime membership. No written terms regarding the price of membership were provided to plaintiffs. The complaint alleges that Amazon “knew that their representations and omissions were untrue and misleading, and deliberately made the aforementioned representations and omissions in order to deceive reasonable consumers.”
The lawsuit, Laura Makenna, et al., v. Amazon.com LLC, 17-CV-04412, was filed in the United States District Court for the Northern District of California. It alleges that Amazon violated California and Texas consumer protection laws and the federal Electronic Funds Transfer Act. The plaintiffs, some of whom were charged $100 to $400 for Prime membership fees, are seeking damages and an order requiring Amazon to provide notice to its customers regarding their Prime marketing.
Other Lawsuits Against Amazon
This isn’t the first time that Amazon was accused of wrongfully charging their customers for Prime services. Earlier this year, another class action lawsuit was filed against Amazon. The plaintiff in Latoya Christmas v. Amazon.com LLC, et al., 17-CV-01301, filed in the U.S. District Court for the Northern District of Illinois, alleged that her debit card was charged, without her consent or knowledge, for the purchase of Amazon goods and a $99 Amazon Prime membership. Although Amazon agreed to cancel the Prime membership and refund the $99 fee, Amazon then withdrew another $99 from plaintiff’s bank account, which was never credited back. According to the complaint, Amazon “concealed, suppressed and/or omitted” the fact that the plaintiff would be charged an additional $99 fee despite her cancellation of the Prime membership. The lawsuit seeks to represent a class of consumers who were wrongfully charged by Amazon for Prime memberships after they had already submitted cancellation requests of the service. The suit alleges that Amazon violated the Electronic Funds Transfer Act and the Illinois Consumer Fraud and Deceptive Business Practices Act. The plaintiff is seeking damages in the amount of $1,000 per violation of the Electronic Funds Transfer Act.
Similarly, in Harris v. Amazon.com LLC, 16-CV-967, the plaintiff alleges that he was charged for Prime membership without his knowledge or consent. The lawsuit was originally filed in the Los Angeles Superior Court of California but was later removed to the United States District Court of the Central District of California under federal question and Class Action Fairness Act jurisdiction. Lead plaintiff, Gregory Harris, alleges that he was charged more than $100 for Amazon Prime after he purchased products from the retailer in June 2015. The complaint alleges that these actions constitute a “common scheme to mislead consumers and incentivize them to purchase products from its website.” The complaint further alleges that Amazon violated the California False Advertising Act by “making misrepresentations and untrue statements about its services, namely…that it would not charge [customers] for membership fees in order to purchase products on its website, and made false representations to Plaintiff and other putative class members in order to solicit these transactions.”
The litigation of these class actions will require the assistance of various consumer fraud and products liabilities experts, particularly in light of Amazon’s experienced and innovative role in the online retail market. In order to establish a class action, it must be proven that the alleged conduct injured each proposed class member and that the damages can be determined by common proof. An expert versed in conducting empirical research could help break down the individual customer transactions on Amazon.com to find common issues pertaining to all customers. As the complaints against Amazon allege that the company engaged in false advertising and failed to disclose the Prime membership fees, a consumer fraud expert would be needed to establish the general practices in the online marketing industry and if Amazon deviated from said practices. The lawsuits also present technological issues, i.e., credit cards, debit cards, and checking accounts being debited without authorization. An expert in consumer finance can help describe the mechanisms that Amazon used to automatically charge their customers and whether said charges were adequately disclosed.
Amazon is undoubtedly a retail giant that continues to gain traction in its industry. Consumers and litigants alike should keep a watch on any developments in these class action lawsuits, as they just might change the way Amazon conducts business in the future.