Amazon to Pay $2.5 Billion in Historic FTC Settlement Over Prime Subscription ‘Traps’
Last updated September 29, 2025
Amazon has agreed to pay $2.5 billion to settle allegations that it “enrolled millions of consumers in Prime subscriptions without their consent and knowingly made it difficult for consumers to cancel.”
As Checkbook reported in 2023, when the Federal Trade Commission (FTC) filed this case, Amazon denied tricking customers into signing up for Prime, with an annual cost of $139.
But on Sept. 24, the company agreed to pay the government a civil penalty of $1 billion and refund $1.5 billion to approximately 35 million customers harmed by what the FTC described as “deceptive Prime enrollment practices.”
“The evidence showed that Amazon used sophisticated subscription traps designed to manipulate consumers into enrolling in Prime and then made it exceedingly hard for consumers to end their subscription,” said FTC Chairman Andrew Ferguson.
In a statement issued after the settlement, Amazon said, “We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership.”
This historic settlement was announced following opening arguments in the case, which was being held in a federal courtroom in Seattle. It’s the largest civil penalty ever paid for violating an FTC rule and the second-largest restitution for consumers resulting from an FTC lawsuit.
While Amazon did not admit to any wrongdoing as part of this settlement, the world’s largest online retailer agreed to “cease unlawful enrollment and cancellation practices” for Prime by:
- Having a clear and conspicuous button for customers to decline Prime. Amazon can no longer have a button that says, “No, I don’t want Free Shipping.”
- Including clear and conspicuous disclosures about all material terms of Prime during the enrollment process, such as the cost, the date and frequency of charges to consumers, whether the subscription auto-renews, and cancellation procedures.
- Creating an easy way for consumers to cancel Prime, using the same method that was used to sign up.
If the judge approves the settlement, qualifying Prime customers will receive a refund of up to $51. There’s nothing you need to do; the FTC says Amazon will automatically provide the refunds by December 25 to those who meet the eligibility criteria.
Customers who meet all three of these requirements may be eligible for an automatic refund:
- You live in the U.S.
- You signed up for a Prime membership between June 23, 2019, and June 23, 2025, through one of the enrollment processes challenged by the FTC in this case, OR you unsuccessfully tried to cancel your Amazon Prime membership between those same dates.
- You used less than three Prime benefits, such as watching a Prime video or listening to Amazon Music, in any 12-month period after you enrolled in Prime.
Fraud Alert: The FTC is not contacting people about these refunds. If you get a call from someone who claims to be from the FTC, it’s a scam.
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Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He has been protecting consumers for more than 40 years, having covered the consumer beat for CBS News, The Today Show, and NBCNews.com. You can also find him on Facebook, Blue Sky, X, Instagram, and at ConsumerMan.com.