Facebook Agrees to Settle In-App Purchases Class Action Lawsuit

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In order to end a class action lawsuit, Facebook has agreed to make several changes to its terms and conditions in an effort to make things easier on parents requesting a refund for in-app purchases unknowingly made by a minor.

According to the Facebook class action lawsuit settlement, these modifications are consistent with the requirements listed under the California Family Code, “which recognize that minors will occasionally use their lack of judgement to enter into contractual relationships and alter assert the right to walk away from the contract.”

Facebook agreed to change the wording that previously stated that all sales are final to instead read “all funding transactions are final unless required by law” in order to comply with the California Family Code.

In addition, Facebook will inform developers that any purchases made by minors might be voidable by law and therefore asked to be refunded. 

According to the other terms of the Facebook class action settlement, the company committed to setting up a queue within Facebook that specifically addresses refund requests for in-app purchases made by U.S. minors.

The social media giant also agreed to further emphasize in bold the following statement: “If you are under the age of eighteen (18), you may use Facebook Payments only with the involvement of your parent or guardian. Make sure you review these Terms with your parent or guardian so that you both understand all of your rights and responsibilities.”

The Facebook in-app class action lawsuit was filed by plaintiff Glynnis Bohannon on behalf of her minor son I.B. in 2012. According to the Facebook lawsuit, Bohannon’s child gave her $20 in cash and then used her credit card in order to buy Facebook credits.

However, the child continued to use the stored credit card information to purchase other in-app games allegedly believing that he was using virtual currency. Bohannon claimed that Facebook should not have allowed minors to rack up credit card charges without the consent of their parents.

U.S. District Judge Beth Labson Freeman certified a class of millions of minor Facebook users last March which allowed the lawsuit to move forward. However, based on her concerns of not knowing whether minors had permission from their parents to buy in-app purchases, she denied the Facebook class action lawsuit plaintiffs from seeking financial compensation.

The terms of the Facebook class action settlement stipulate that there will be no class-wide release of any kind. Which means that, “Other than the representative plaintiffs in this action, no class member’s existing, future or potential claim against Facebook will be barred by the proposed settlement.”

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.

UPDATE: On Jan. 24, 2019, documents recently unsealed after legal action by The Center for Investigative Reporting show thatFacebook bilked kids and parents out of moneyusing in-app purchases and kept doing so even though an employee had discovered a fix.