Facebook tricked kids to rake in money from online games, says report

Jan 28, 2019, 01:01
Facebook tricked kids to rake in money from online games, says report

Facebook also internally allegedly referred to children who spent large amounts of money on online games as "whales" - a term usually used by casinos to refer to high value gamblers.

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". But the company didn't adopt them for fear of undercutting the revenue growth that helps boost the company's stock price - and its employees' compensation.

The court documents, which date from 2010 to 2014, were unsealed following a request from Reveal, a website run by the US-based Center for Investigative Reporting.

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Glynnis Bohannan let her 12-year-old son use her credit card to play the game Ninja Saga on Facebook, but the initial fee of $19.95 mushroomed into charges totaling almost $1,000.

Despite recognising the issue of children spending large amounts of their parents' money, Facebook's internal documents - released earlier this week - show that the social network developed systems to prevent minors from overspending, which it then actively chose to ignore. One internal study of the issue concluded, "In almost all cases the parent knew their child was playing Angry Birds, but didn't think the child would be allowed to buy anything without their password or authorization first (like in iOS)". The child was apparently unaware that they were buying the currency, which was being charged to the mother's credit card linked to the account.

Instances of children spending parents' money on games without their permission was labeled "friendly fraud" or "FF" in Facebook's internal correspondence. Her charges ballooned to almost $1000 total. She also said it would "make sense to start refunding for blatant FF-minor".

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Rovio was listed in the documents as having noticed a 5% to 10% refund rate through Facebook.

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". Bohannan's case was settled in 2016.

"We have now released additional documents as instructed by the court", a Facebook spokesperson said, in a statement emailed to Fox News. They were hesitant to stop the practice because it would hurt the company's revenue. Facebook works with parents and experts to offer tools for families navigating Facebook and the web.

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Facebook told Fox News that it was contacted by the Center for Investigative Reporting a year ago and voluntarily unsealed documents related to a 2012 case about the company's refund policies for in-app purchases that parents believe were made in error by their minor children. With that settlement, Facebook agreed "to dedicate an internal queue to refund requests for in-app purchases made by US minors".