Facebook 'tricked' kids, parents to spend money on 'free' games

Emagist Entertainment Limited

Sometimes, kids were unaware they were even spending real money, according to an internal report by Facebook itself.

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".

In relation to the hugely successful Facebook game 'Angry Birds, ' a memo included in the documents obtained by CIR written by Facebook employee Danny Stein noted how, "in almost all cases the parents knew their children was playing Angry Birds, but didn't think the child would be allowed to buy anything without their password or authorisation first". One 15-year-old spent $6,500 (£4,950) in two weeks.

While the documents are old, they shed light on Facebook's past business practices as the company continues to be under enormous scrutiny for its numerous privacy breaches.

The lawsuit eventually grew into a class action, and the internal documents pertaining to the alleged "friendly fraud" practice cover the period between 2011 and 2014, according to the report.

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The documents show that Facebook took a light tone internally with these purchases, referring to the children in casino-speak as high-spending "whales" and their purchases as "friendly fraud". Her team experimented with solutions to curb kids' spending with parents' credit cards (including requiring children to re-enter partial card numbers). The documents cite internal Facebook memos, "employee emails and more", according to GI.biz.

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". They also didn't understand that their parents' credit cards were linked to the games, Reveal reported. Allegedly, one employee, named in the documents as Tara Stewart, who is said to work as a risk analyst for Facebook, noted that in-game currency "doesn't necessarily look like real money to a minor", thus making it easier to spend. It is suspected that these came after parents noticed a child had used their credit card on Facebook. Facebook changed its refund policy around games in 2016 and now has a detailed site about how to handle payment disputes with developers.

The investigation was prompted by Finnish game developer Rovio.

"Facebook works with parents and experts to offer tools for families navigating Facebook and the web", the company said, adding that it agreed to provide "dedicated resources" to deal with chargebacks originating from purchases made by minors.

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