Facebook willingly let kids spend their parents' money and didn't stop it

Newly released court documents reveal that Facebook allowed children to ring up huge bills on digital games while the company rejected recommendations on addressing what it dubbed "friendly fraud". However, the solutions caused a decrease in Facebook's revenue, and the employees never fully implemented them as a result.

In one document, Rovio, the makers of popular mobile game Angry Birds, asked Facebook in 2012 why their users' credit card chargeback rate was so high.

Campaigning US journalism outfit Reveal News secured a number of exhibits from an ongoing class-action lawsuit against Facebook in which the startling revelations came to light.

The case, Bohannan and others v Facebook Inc, continues.

The documents released Thursday night are part of a 2012 lawsuit against the company, which alleges that Facebook knew kids were making the purchases and made it hard for parents to get their money back, CBS News reported.

Glynnis Bohannon told Reveal News that after she lent her 12-year-old son her credit card to spend $20 on Ninja Saga, the game stored her payment information and continuously charged the card as he played. A federal judge ordered the documents, which are from 2010 to 2014, to be unsealed after a request from the publication. But the link was frequently unclear to parents and children.

Internally, the company described the problem as one of "friendly fraud", and one staff member, who was in charge of a project to increase the company's game revenues, said it was particularly bad with a few games, including "PetVille, Happy Aquarium, Wild Ones, Barn Buddy and any Ninja game".

In a three-month period between 2010 and 2011, more than 9% of money made from children through online games was recovered by credit card companies.

Through surveys, Facebook reportedly learned that children were not aware they were spending "real" money. However, the woman soon saw charges totaling nearly $1,000.

"We have now released additional documents as instructed by the court".

After taking a look at the issue, a Facebook employee concluded that around 93 per cent "of the refunds are being made due to friendly fraud refund requests". "Facebook works with parents and experts to offer tools for families navigating Facebook", a spokesperson said. The class action case was settled by Facebook in 2016, agreeing "to dedicate an internal queue to refund requests for in-app purchases".

Facebook issued the following statement to Tom's Guide: "We were contacted by the Center for Investigative Reporting past year, and we voluntarily unsealed documents related to a 2012 case about our refund policies for in-app purchases that parents believe were made in error by their minor children".


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