“Amazon deceived thousands of its customers,” Schwalb said in a press release. “Now, we’re putting more than $7 million back in the pockets of people who were taken advantage of.”
Amazon has agreed to refund $7.25 million in Amazon Prime membership fees and pay an additional $1 million in fines to settle a lawsuit filed by the District of Columbia.
According to The New York Times, the lawsuit was filed in 2024 by D.C. Attorney General Brian Schwalb. In court filings, Schwalb claimed that Amazon excluded at least two local ZIP codes from its in-house Prime delivery services. These ZIP codes cover historically low-income areas.
“[I]n June 2022, Amazon made an internal decision to stop using its fleet of Amazon-branded trucks to make Prime deliveries—what it calls a delivery ‘exclusion’—to two DC ZIP codes east of the Anacostia River (20019 and 20020) for purported safety reasons,” Schwalb’s office said in a press release. “Instead, the company chose to service these ZIP codes only with third-party delivery services like UPS and the US Postal Service, which are often slower than its in-house service.”
Nevertheless, Amazon reportedly refused to inform customers about slower-than-expected deliveries in these neighborhoods, allegedly in violation of D.C.’s consumer protection laws.
Under the terms of the settlement, Amazon will return $7.25 million in Prime membership fees to affected consumers. The company will also pay a $1 million penalty to the district and must notify Amazon customers of future restrictions on its delivery services.
Schwalb’s office said that, before bringing the suit, an estimated 69,000 Prime members experienced slower deliveries as the direct result of Amazon’s practices.
“Amazon deceived thousands of its customers,” Schwalb said in a press release. “Now, we’re putting more than $7 million back in the pockets of people who were taken advantage of.”
“Amazon deceived thousands of its customers who live East of the River, collecting their Prime membership fees while secretly excluding them from full Prime membership benefits. Now, we’re putting more than $7 million back in the pockets of people who were taken advantage of,” Schwalb said. “No company is above the law, no matter how big or powerful. My office will always fight to make sure businesses compete on a level playing field and treat their customers fairly so that DC residents get what they pay for, regardless of what zip code they live in.”
Amazon, in a separate statement, maintained that it never deceived anybody, emphasizing that its decision to settle is in “no way … an admission of wrongdoing.”
“Rather than engage in prolonged litigation, we chose to do resolve this matter so we can stay focused on what we do best: delivering great service to every customer across Washington, D.C.,” Amazon spokesperson Steve Kelly said in a statement.
Sources
Amazon Settles Lawsuit Over Claims of Slow Deliveries to Low-Income Areas
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