Amazon has agreed to compensate eligible customers in Arizona to the tune of $3 million, following allegations that the company made it excessively difficult for customers to cancel their Prime memberships. The settlement comes after Arizona Attorney General Kris Mayes accused Amazon of using a convoluted cancellation system designed to prevent customers from ending unwanted subscriptions easily.
According to reports by the Arizona Daily Star, the agreement requires Amazon to distribute $3 million among eligible consumers and pay an additional $1.5 million towards investigating consumer fraud and educating residents about protection measures. The company will also cover $1.5 million in legal expenses for the state. Additionally, Amazon has agreed to donate $1 million to charities chosen by Mayes, all of which work towards providing food for those in need.
The lawsuit, filed by Mayes in 2024 under Arizona's consumer fraud laws, focused on Amazon's online Prime membership cancellation process. The state claimed that customers had to navigate at least six separate steps to end their subscriptions, contradicting the company's advertisements claiming members could cancel anytime. Customers were required to log in to Prime Central, click on 'Manage membership', select 'End membership', click on 'Continue to cancel', again select 'Continue to cancel', and finally click on 'End now'.
Mayes argued that the process created unnecessary hurdles for customers attempting to leave the subscription service. The state alleged that the system was designed to discourage cancellations and retain members who might otherwise have ended their subscriptions, leading to a reported reduction in cancellations by 14%. Amazon Prime costs $139 annually in the US and offers benefits such as free delivery, sometimes on the same day, along with other membership services.
Amazon has denied any wrongdoing despite agreeing to the settlement. The Arizona agreement follows a separate settlement between Amazon and the Federal Trade Commission last year, which required the company to change its cancellation practices. However, Mayes continued with her own lawsuit, arguing that the federal settlement might not cover everyone who experienced difficulties cancelling Prime memberships or compensate them for all their costs.
The Arizona Attorney General's Office aims to recover as much money as possible for consumers affected by these alleged practices. The settlement will provide restitution to eligible residents, and Mayes' office will continue standing up for consumers dealing with unwanted subscriptions. However, Amazon has not admitted any wrongdoing under the consent judgment.