Amazon will soon directly address claims over faulty marketplace products

It will pay customers directly for claims under $1,000, starting on September 1st.

Rick Wilking / Reuters

Amazon is updating its return policy to make it easier for customers to file complaints over defective products from third party marketplace sellers. Starting September 1st, you'll be able to contact Amazon directly with a property damage or personal injury claim, and then Amazon will connect you with the seller. If it determines a complaint is valid, Amazon will directly pay out any claims under $1,000, the company wrote in a blog post.

"Claims under $1,000 account for more than 80 percent of cases in our store, and Amazon will bear these costs and not seek reimbursement from sellers who abide by our policies and hold valid insurance," the company wrote. "Sellers will be kept informed at every step so they can continue to ensure their products are safe."

Amazon noted that it may also step in for claim over $1,000 if the seller is unresponsive. It may also address customer concerns if a claim is rejected by the seller, though "sellers will continue to have the opportunity to defend their product against the claim," it said. The company will vet the claims using independent insurance fraud experts and its own fraud and abuse detection systems.

Currently, Amazon encourages customers to contact third-party sellers directly with complaints about products. That left users to fend mostly for themselves following accidents caused by faulty or dangerous products. A short list of those includes defective carbon monoxide detectors, hair dryers without required shock protection and flammable clothing for kids, according to a complaint from the US Consumer Product Safety Commission (CPSC).

The new policy comes after complaints from lawmakers and consumer organizations about the proliferation of counterfeit, faulty and even dangerous products sold on Amazon's sprawling third-party marketplace. Last month, the CPSC sued Amazon to force it to recall faulty items that posed safety risks. Regulators said they had warned Amazon about the hazardous items on its site, but deemed its response insufficient.

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