Facebook allegedly duped kids and parents out of money on games

Tech giant Facebook allegedly knew that children were spending their parents' money on games without permission and chose not to implement safeguards, calling it "friendly fraud."

According to a recent report by Reveal based on unsealed court documents, tech giant Facebook chose not to implement safeguards in games aimed at children even though the company knew that kids were spending their parents' money without permission and often without even realising they were spending real money.

This information comes from over 135 pages of internal facebook documents (including memos and employee emails) procured from a class-action lawsuit against Facebook from the companies behind games such as Angry Birds and PetVille. The game publishers noticed an unusually high rate of refund requests and chargebacks on their games from parents whose children had unknowingly spent on games. Some games had no indication whatsoever that the user was being charged money for actions taken in-game.

The uncovered documents indicate that Facebook suggested developers just let children spend their parents' money without permission, calling it "friendly fraud." One parent contacted Facebook to dispute over $6,000 in charges made by their 15 year old kid over the span of just a few weeks, and the Facebook employee handling the case advised that it not be refunded.

The situation has been described as an orchestrated multi-year strategy to dupe children and their parents out of money. A team at Facebook even reportedly developed a safeguarding system to prevent children from overspending and proved that it worked to reduce the rates of fraud and chargebacks, but the company decided not to use it.

Source: Reveal