Amazon is being forced to pay $2.5 billion (£1.9 billion) by the Federal Trade Commission over allegations the US-based company tricked its customers into signing up for Prime - and then made it difficult to cancel.
The historic agreement will see Amazon paying a $1 billion civil penalty and then spending $1.5 billion on refunds to an estimated 35 million customers who were affected.
Customers who signed up for Prime between 23 June, 2019, and 23 June, 2025, through certain offers and who used a few of the benefits afterwards, will automatically receive $51 (£38).
The FTC claims that Amazon made it too difficult to order from them without also becoming a Prime member and stated that in some cases, users were presented with a button to complete their transaction which didn't clearly state they would become a subscriber.
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The complaint against Amazon also alleged that cancelling a subscription had become too difficult, something which the company still denies.
"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," the FTC chairman Andrew Ferguson said in a statement via CNN.
Meanwhile, a spokesperson for Amazon said: "Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers.
"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."
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The agreement between Amazon and the FTC means that Amazon is not allowed to misrepresent the terms of its subscription and must fully disclose any costs for the customer, gaining their full consent before signing up.
How to get a refund from Amazon
Even if you don't fall into the category of people who receive the automatic refund, you could be eligible for a refund of up to £95.
That's because many Amazon users have complained about being signed up to Amazon without realising. In some instances, it's when someone has signed up for a free trial and they didn't realise they needed to manually cancel it to avoid being signed up and charged.
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If this happened to you, you may have found yourself being charged an eye-watering £95 for an annual Prime subscription or £8.99 every month.
You can log into your Prime account, head to 'Manage membership' and click 'End membership,' and if you haven't used any of the services, you'll receive a refund.
Topics: Amazon, Amazon Prime, Money
Emma Rosemurgey