How Facebook tricked children into spending money on games

Facebook used games to make millions off children in 'friendly fraud'

Facebook accused of tricking children into spending thousands playing online games

In an internal analysis, Facebook found that from October 2010 to January 2011 children spent $3.6 million on games, according to the report.

The court documents, which Reveal requested be unsealed, show the lead plaintiff in the lawsuit had to pay thousands of dollars in charges racked up by their child for virtual currency in Facebook games.

Documents related to the case were placed under seal because Facebook successfully argued that releasing them to the public could harm its business. A 15-year-old, for example, managed to dump $6,500 into games during a two-week stretch. Game developers were reportedly told that the practice would be a good way to boost revenue, according to the report.

The documents show Facebook considered measures to reduce the chances of kids running up charges on parents' credit cards without their knowledge. It said that "in almost all cases, the parent. didn't think the child would be allowed to buy anything without their password or authorization first". They also didn't understand that their parents' credit cards were linked to the games, Reveal reported. Her charges ballooned to almost $1000 total.

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Apple agreed to issue $32.5 million in refunds for allowing kids to make in-app purchases without parental consent as part of a 2014 settlement with the Federal Trade Commission. At one point, Rovio, the creator of the massive hit Angry Birds, emailed Facebook asking about the refund rates of "5-10 percent" for money spent on the game, which seemed "quite high".

Yet another internal report shows that Facebook employee Tara Stewart actually suggested refunding some of these parents for friendly fraud. This practice was widespread, according to newly released court documents.

"There's no way that they didn't know these transactions were originating from Facebook accounts that were assigned to minors", said Bohannan's attorney John Parker. They said that building in a way to prevent the issue would harm revenue, but Facebook could give Rovio special attention for monitoring transactions. In 2016, Facebook chose to settle the case, paying two families $US5000 ($7044) and agreeing to change its practices. Facebook works with parents and experts to offer tools for families navigating Facebook and the web.

In a statement released on Friday, a Facebook spokesperson said: "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". The class action case was settled by Facebook in 2016, agreeing "to dedicate an internal queue to refund requests for in-app purchases".

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