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

28 January, 2019, 06:16 | Author: Kevin Carter
  • Facebook used games to make millions off children in 'friendly fraud'

The memos and other records show that "the company orchestrated a multi-year effort that duped children who played video games into spending their parents' money", according to Reveal. Facebook workers realised that 93 per cent of chargebacks on Angry Bird were so-called "friendly fraud" by children.

The documents released Thursday night are part of a 2012 lawsuit against the company, which alleges that Facebook knew kids were making the purchases and made it hard for parents to get their money back, CBS News reported.

Sometimes the children did not even know they were spending money, according to another internal Facebook report.

"In almost all cases the parents knew their child was playing Angry Birds, but didn't think the child would be allowed to buy anything without their password or authorisation first", read one memo, written by Facebook employee Danny Stein.

Even as the company employees suggested some ways to not bamboozle kids, Facebook clearly ignored these. Facebook's internal emails describe how another family requested a refund after a 15-year-old accumulated more than $6,500 in charges playing an online game.

The suit was filed by Glynnis Bohannan, whose 12-year-old son racked up nearly $1,000 playing Ninja Saga. But the company didn't adopt them for fear of undercutting the revenue growth that helps boost the company's stock price - and its employees' compensation.

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Glynnis Bohannan let her 12-year-old son use her credit card to play the game Ninja Saga on Facebook, but the initial fee of $19.95 mushroomed into charges totaling almost $1,000.

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.

It's a business model that's been known for years-in 2015, actor Jack Black went on The Tonight Show and said his son had spent $3,000 on such purchases. The US non-profit Merchant Risk Council considers a 1% chargeback rate as high, while the US government's Federal Trade Commission deems a 2% charge back rate is a red flag for a business being "deceptive".

A full overview of the particularly troubling bits of what was released can be found over on Reveal's website, including links to the released documents and snippets of conversations between Facebook and the developers of the games in question. "As part of that work, we routinely examine our own practices, and in 2016 agreed to update our terms and provide dedicated resources for refund requests related to purchases made by minors on Facebook", the company said in a statement.

RevealNews says this lawsuit was settled by Facebook in 2016.

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