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Trove of Unsealed Court Docs Show How Facebook Bilked Children Out of Money

It seems no one is too young for Facebook to go after. In this case, the company has been accused of taking advantage of kids when they make purchases while playing games online. Many of the instances relate to playing the in-app game "Angry Birds."

While the standard procedure used by most companies, including Google and Apple, requires you to enter a password whenever you use a stored credit card to make a purchase while playing, Facebook never asked for the verification from the children playing the games once the first purchase was authorized.

Since authorization was not requested, both the kids and parents assumed items were being paid for using virtual currency, such as credits generated by points that accumulate while playing.

As a result, surprise charges mounted on the parents’ credit cards as kids made purchase after purchase within the game, in many cases amounting to hundreds of dollars.

This information about Facebook's behavior was discovered as the result of the Reveal release of four court documents as part of a 2012 class-action lawsuit. Facebook has been ordered to release another hundred or so more pages as part of the lawsuit.

According to the documents uncovered by Reveal:

The lead plaintiff in the case was a child who used his mother’s credit card to pay $20 while playing a game on Facebook. The child, referred to as “I.B.” in the case, did not know the social media giant had stored his mom’s payment information. As he continued to play the game, Ninja Saga, Facebook continued to charge his mom’s credit card, racking up several hundred dollars in just a few weeks.

In spite of Facebook employees agreeing that children were likely to be confused by the in-game purchases because it “doesn’t necessarily look like real money to a minor," the company continued to deny refunds to children, profiting from their confusion.

The site Bleeping Computer also reports:

Two Facebook employees deny a refund request from a child whom they refer to as a “whale” – a term coined by the casino industry to describe profligate spenders. The child had entered a credit card number to play a game, and in about two weeks racked up thousands of dollars in charges, according to an excerpt of messages between two employees at the social media giant.

In one case, when the child's mother asked Facebook for a refund, explaining she only authorized the initial $20 charge, Facebook rejected her claim. As a result, the family joined with other upset parents in a class-action lawsuit.

Facebook’s response was simply, "We appreciate the court’s careful review of these materials."

Facebook has run into trouble previously with charges of inappropriate business practices when dealing with children.

One FTC complaint charged that Facebook's Messenger Kids app was collecting children's information illegally without parental consent, which is required by the Children’s Online Privacy Protection Rule (COPPA). The company's privacy policy was intentionally designed to be incomplete, vague, and not in accordance with COPPA's terms.

On January 30, 2018, Facebook CEO Mark Zuckerberg was sent a letter endorsed by over 100 child advocates and experts, requesting that he put a hold on the Messenger Kids app because it undermines children's healthy development, but the letter was to no avail.

Capturing children’s personal information has been an important area of interest to online data-mining companies such as Google, as previously reported, and Facebook.