Former Audible Customer Proposes Class Action For “Misleading” Expiring Credits

Image courtesy of Heidi Uusitorppa

Amazon’s audiobook store/subscription service hybrid, Audible, charges its members a monthly fee, in return for which they get monthly credits. However, customers have learned that while they get to keep their purchased books after canceling a membership, they do not get to keep unused credits. One of them has filed a class action against Amazon over this structure, claiming that the credits are like gift cards.

That’s important, because gift certificates or cards aren’t allowed to expire in California, where the lead plaintiff lives. The suit [PDF] then, is on behalf of consumers in California only, and presumes that Audible credits are the equivalent of gift cards.

Amazon, the lawsuit alleges, does tell members that the book credits expire after six months “to make room for” new credits. The credits are digital and don’t take up any physical space, so the only reason why users aren’t allowed to save up credits for a book shopping spree is to collect subscription fees without giving members one book for every month they subscribe, as advertised.

“Defendants use this explanation to avoid calling the prepaid credits what they really are: prepaid gift certificates or gift cards that are redeemable for audiobooks but that have unlawfully short expiration periods,” his attorney wrote in the suit , which was filed in federal court late last week.

What triggered the lawsuit, though, was that the lead plaintiff decided to cancel his subscription, not realizing that Amazon’s assurance that he would be able to keep any books purchased didn’t mean that he would be able to keep the credits that he had accumulated.

Also in violation of the strong consumer protection laws in California, the plaintiff claims that it isn’t made clear for customers signing up for a free Audible trial that their membership will auto-renew and be charged to a credit card attached to their Amazon account.

“Based on this alleged authorization, potentially thousands of Amazon customers have had credit cards unlawfully charged by Audible without notice simply because they use a common Amazon account that stores information for multiple credit cards,” his attorney notes.

The lawsuit seeks compensation for the lost credits, as well as court costs and punitive damages against Amazon.

The bad news is that this plaintiff is likely to soon find out that he probably signed away his right to file this lawsuit. The Audible terms of use say that users are bound by the dispute resolution rules of Amazon’s customer agreement.

Amazon, as you may know, is one of many, many companies that include forced arbitration clauses in their user contracts, stripping customers of their right to bring a lawsuit and join with other wronged customers in a class action.