Why the FTC is Investigating Amazon Prime

What did Amazon do to trigger the investigation? The best for subscriber is to avoid showing up on the FTC’s radar.

How can you do everything possible to prevent subscribers from canceling their subscription or membership, without the FTC coming after you for fraud?

Does Amazon Prime’s subscription processes cross the line? Click here to judge for yourself.

Maximizing new subscriber sign-ups and minimizing churn or cancelations should be a high priority for every subscription business.

And, when you have a motivated team that’s focused on hitting their numbers, if they aren’t monitored by a compliance attorney, you sometimes see tactics that cross the line.

Amazon Prime has been using a sign-up process that’s so easy, that many customers don’t even realize they’re starting a subscription. See it here.

Business Insider called out Amazon Prime’s cancelation process, saying it was “excessively hard!”  – Ouch!

It’s fine to make an effort to demonstrate value and invite the customer to reconsider their decision to cancel, but in the end, the subscriber must be able to cancel without jumping through silly, irritating hoops, or worse, by a subscription business deliberately hiding the cancel button!

Let’s look at what Amazon is doing.

To avoid compliance issues, the FTC is very clear.  They recommend subscription companies follow three key requirements:

  1. Clearly and conspicuously disclose all material terms of a subscription product or service. Yes, be upfront that a subscription is being offered, and declare the price and billing frequency.
  2. Obtain a consumer’s express informed consent before charging the consumer for products or services. Avoid any sneaky practice of getting them to click on a button without realizing they’re starting a subscription.
  3. Provide easy and simple cancellation procedures. It’s not difficult to do that, and customers deserve to be treated well, even when they decide to cancel.

Jeff Bezos is famous for the quote, “The No. 1 thing that has made us successful by far is obsessive-compulsive focus on the customer.”  In the light of this FTC investigation and what I show you in this video, does the Amazon Prime processes live up to the philosophy in that quote?

This episode of Be Unleavable® Subscription Growth breaks down Amazon’s Prime sign-up tactics and cancelation process, and reveals where they went too far, so you can avoid a similar investigation.

Watch Be Unleavable Subscription Growth here.

About Robert Skrob

The problem with subscription membership programs is that members quit, I fix that problem. For more than 20-years I have specialized in direct response marketing for member recruitment, retention and ascension in diverse subscription members environments including non-profit associations, for-profit publishers/coaching, subscriptions and SAAS companies. For an evaluation of your current churn rate and how I can improve it, contact me here. I discover there are often two or three quick wins you can implement within a week to lower churn immediately, let’s talk about your quick wins.
10X Subscription Growth

2 Comments on “Why the FTC is Investigating Amazon Prime”

  1. I agreed with too many layers to cancel Amazon Prime. I am the victim. To cancel, they ask additional fees that costs me fortune to cancel my Acct. If I don’t pay their additional costs, they hold my lifetime saving money that was process on their server. One costs comes after another. And if payment was process under Amazon server, I have to pay double the amount. This is ripp- off business practices

  2. I agree I realized a few weeks ago that Prime was hitting me for $5 , $10 at various times in the month (always scattered) for subscriptions to channels I never signed up for…..including twice for the same channel?

    I was able to cancel and they offered me a few months backpay…but some had gone on for over a year and I never caught it. If they were honest they’d bill a subscriber once a month and send an email “bill” to alert the consumer. Oh yeah you had to talk to numerous levels of support to cancel everything each with thick hard to understand accents.

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