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Documents recently unsealed after legal action by The Center for Investigative Reporting show that Facebook bilked kids and parents out of money using in-app purchases and kept doing so even though an employee had discovered a fix.
According to the report and unsealed documents published on Reveal, internal Facebook communications called the effort that affected such games as Ninja Saga, PetVille, and Angry Birds “friendly fraud.”
Reveal reports that the unsealed documents prove that game developers tricked kids into spending money on in-app purchases that were not controlled by Facebook, despite available technology that would stop the practice.
In fact, the social medical giant reportedly encouraged these developers to not even let children using their games know that they were spending their parent’s money, according to documents unsealed by Reveal – and they did so for years to drive up revenue.
The Reveal report comes as the social media giant attempts to settle a Facebook in-app class action lawsuit alleging that children were allowed to enter into contracts for game purchases without their parent’s knowledge or consent.
According to the class action lawsuit, Facebook failed to prevent minors from making in-app purchases on their parents’ credit cards without parental permission.
Though the Terms of Service on the site states that those under 18 should consult a parent before making purchases, parents, some of whom were hit with thousands of dollars in in-app charges, allege that this statement is not enough.
The proposed Facebook in-app purchases class action lawsuit was certified in 2015.
The documents reported by Reveal show that Facebook was aware of the problem. In fact, according to the article, records of parents who turned to the Better Business Bureau and credit card companies over the charges discovered that Facebook’s revenue from the in-app purchases blew past Federal Trade Commission indicators for deceptive practices.
Some parents did not even receive receipts for such purchases, says the report by Reveal, citing an unsealed document
According to Reveal, the unsealed documents show that Facebook was well aware that its in-app purchases were tricking kids into charging their parents’ credit cards.
A 2011 communication from an employee acknowledged that parents were increasingly demanding credit card refunds for such purchases.
While the Facebook employee who sounded the alarm started working on a way to stop the problem, an internal memo distributed that same year indicated that game developers were going to be encouraged to commit so-called friendly fraud. “Friendly Fraud – what it is. why its challenging, and why you shouldn’t try to block it” reads an email unveiled by The Center for Investigative Reporting.
Both the Reveal article and the Facebook in-app purchases class action lawsuit contend that parents and their children often had no idea that they were spending money as a part of these online games.
Parents say that they were not aware that the app stored their credit card information – often given to spend a small amount of money within the app.
Further, the games themselves were reportedly not transparent about when money would be spent on each game, with children reporting that they thought they were spending fake game coins rather than using real money.
The plaintiffs are represented by C. Brooks Cutter and John R. Parker Jr. of Cutter Law PC, Daniel B. Edelman of Katz Marshall & Banks LLP and Benjamin Edelman.
The Facebook In-App Purchases Class Action Lawsuit Settlement is I.B., by and through Glynnis Bohannon, et al. v. Facebook Inc., Case No. 5:12-cv-01894, in the U.S. District Court for the Northern District of California, San Jose Division.
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46 thoughts onFacebook Class Action Lawsuit Docs Reveal ‘Friendly Fraud’ Tricked Kids
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The case is still moving through the courts and has not yet reached a settlement. Claim forms are usually not made available to consumers until after a court approved settlement is reached. Setting up a free account with Top Class Actions will allow you to receive instant updates on ANY article that you ‘Follow’ on our website. A link to creating an account may be found here: https://topclassactions.com/signup/. You can then ‘Follow’ the article above, and get notified immediately when we post updates!
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Add me this is not right and they continue and still get away with it
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Thank you.
I have nothing good to say about this company. It’s about time somebody is doing something about it. I am so glad I saw this class action. Companies think they can get away with tricking people. Thanks for who ever filed this clam. I’m all the way in and you can contact me. I’m still going through this with another company call xbox!!!!!
yes it scam , it more like a phishing scam
yes i got tricked , my debit card and the game angry birds, PetVille, my daughter purchased these games from app from Facebook ,i never got notice or receipt but i find small amounts taken off my debit and charge 24.95 that got my attention, i put it in dispute ,then things got weird , Walmart debit seen it on my statement and told me to wait 10 days since it pending ,well i watched and 6th day come around my account was short ,but the 24.95 dispute was never filed and the charge and company was gone off my debit so i had no proof and walmart said if i find the company call them back ,how could something disappear and still get charged