Jan 31, 2026
Amazon owes money to millions of Amazon Prime members who could receive part of a $2.5-billion settlement — all because of how the company marketed its subscription service and communicated its cancellation terms.
According to the Federal Trade Commission (FTC), Amazon allegedly enrolled millions of Americans into Amazon Prime memberships without their clear consent. The filing also alleges that Amazon made it difficult for consumers to cancel their memberships (1).
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The settlement, announced earlier this year, includes $1.5 billion in customer refunds and a $1-billion civil penalty. This penalty is the largest ever in a case involving an FTC rule violation (2).
Amazon has not admitted to any wrongdoing.
“We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership, and to offer substantial value for our many millions of loyal Prime members around the world,” spokesman Mark Blafkin shared in a statement to the Associated Press in September (3).
Millions of current and former Prime members may be eligible for a refund, either automatically or by filing a claim.
Are you eligible for a refund?
Class-action settlements sometimes go unclaimed because people don’t realize they qualify, or assume they need to jump through hoops. In this case, many refunds are being issued automatically, according to FTC statements made to NBC Chicago (4).
You may qualify for an automatic refund if:
- You are a U.S.-based Amazon Prime customer.
- You signed up for a Prime subscription through a so-called “challenged enrollment flow” or tried to cancel online but were unable to do so between June 23, 2019, and June 23, 2025.
- You used no more than three 3 Prime Benefits (such as Prime Video products or Prime Music) in any 12-month period following Amazon Prime enrollment.
The FTC identified four “challenged enrollment flows,” or situations where customers were prompted to join Prime — such as when selecting shipping options — and might not have realized they were signing up. You don’t need to remember how you signed up to qualify. Amazon does the analysis to determine whether you went through one of the applicable flows (1).
Amazon began notifying eligible customers about automatic refunds in November and December by email. Payments are being sent through PayPal and Venmo. Customers who do not accept the digital payment within 15 days will receive a paper check through the mail.
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If you think you are eligible but do not receive an automatic payment, you can file a claim. Eligible customers have 180 days to apply, and Amazon has 30 days to review the submission, after which you will hear about how to claim your payment.
Refunds are capped at $51 per eligible customer, reflecting the Prime subscription fees customers would have paid during the impacted period (4).
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How to avoid paying for unwanted subscriptions
Even small charges for unused subscriptions can add up over time, especially when you don't realize you're paying for them — or even ever signed up in the first place.
A CNET survey found the average U.S. consumer spends about $1,080 per year on subscriptions, including about $200 on subscriptions they never use (5).
This new settlement also highlights a growing issue for American consumers: Many everyday products and services require a subscription now. And when life is busy, signing up is easy, and cancelling is complicated, consumers can easily lose track of recurring charges.
Let this settlement serve as a reminder to stay on top of subscription services that quietly drain your wallet. Here are a few practical tips:
- Review your bank and credit card statements regularly: Set a quarterly calendar reminder to review your accounts for recurring charges. If something looks unfamiliar, investigate it right away.
- Cancel free trials the second you sign up: If you know you don’t plan to use a subscription beyond the trial period, you can usually sign up for a free trial, cancel right away, and continue using the service until the trial expires. That way, you don’t need to worry about remembering to cancel later.
- Track subscriptions in one place: Tools like Rocket Money, PayPal or your bank’s built-in subscription tracker can help you find (and cancel) forgotten or unused subscriptions.
- Pay attention to what benefits you actually use: If you’re paying for a subscription you don't use, it may be time to downgrade your account or cancel.
- Pay attention to deals: Check for credit card rewards, new sign-up bonuses, or sales. If you are charged monthly, even a few dollars off each payment can add up to hundreds in annual savings.
- Watch for settlement notices: Legitimate refunds often come via email or paper mail. Always verify by checking official FTC or settlement administrator websites before sharing personal information. Scammers may use fake class-action lawsuit notices to gather personal data. The FTC will not be contacting people directly for this settlement — you will hear about it from Amazon (1).
As the online subscription industry continues to grow, paying attention to where your money goes is more important than ever. The good news is that FTC crackdowns may deter retailers from using confusing or scammy tactics.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Federal Trade Commission (1, 2); The Associated Press (3); NBC (4); CNET (5)
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Danielle is a personal finance writer based in Ohio. Her work has appeared in numerous publications including Motley Fool and Business Insider. She believes financial literacy key to helping people build a life they love.
