Amazon has agreed to pay $500,000 in a settlement with California regulators after the internet retailer billed nearly 700,000 consumers for unfilled free package offers mailed to their homes.
The agreement between Amazon and the state’s Attorney General’s Office came after a lengthy investigation. It was approved on Tuesday by a judge in Sacramento.
People could receive up to eight free packages that were never delivered.
Records show that Amazon sent nearly 700,000 packages to over 300,000 zip codes throughout California between January 2012 and July 2016. It was the state’s most populous jurisdiction with 35 million residents.
Chris Stadelman, an attorney with the office of consumer protection, said many of the addresses listed in the investigation are where Amazon conducted its package pickup business.
“We’re glad this matter is now resolved and it demonstrates how important it is for consumers to know what they’re getting when they sign up for Amazon free shipping,” Stadelman said.
“Consumers shouldn’t have to think twice before they register for free shipping,” he said. “Amazon must make sure it alerts people to incoming delivery of products they have registered.
Amazon said the cost of the settlement to customers, primarily due to refunds, would be mitigated by its efforts to improve its free shipping program and monitor each contract to identify any exceptions.
Several lawsuits were filed in California by consumers who said Amazon told them they would receive up to six free packages. In addition to refunds, Amazon agreed to pay attorneys’ fees and to comply with the state’s consumer protection laws for two years.
The company had no comment, but did state that it will implement new processes to prevent and detect changes and potential violations of state law, and it may also expand its notification requirements to ensure that consumers are notified of package deliveries as and when required.
Some of the recipients of the order notices received packages that were not shipped at all. Other packages went to people who had never made any online purchases through Amazon.
The New York Attorney General’s Office reached a similar agreement with Amazon on 18 September, 2016. Under the terms of that deal, Amazon will pay $1m in fees to the office for its consumer protection investigation.
The agreement filed in that case states that Amazon had collected more than $1m from around 800 consumers in the state and billed them for eight unattended free products from Amazon, including hoverboards, Smart TV’s and home theater systems.
A representative for Amazon told the attorney general’s office the company said it erroneously printed free product delivery listings on more than 100,000 packages.