Internal docs show Facebook let minors unwittingly rack up thousands of dollars in charges through 'friendly fraud'
- Internal Facebook documents going back to 2011 show that the company knowingly allowed minors to accidentally rack up thousands of dollars' worth of charges on their parents' credit cards.
- The company referred to the practice as "friendly fraud" in the documents, 135 of which were unsealed as part of a class action against Facebook.
- In a statement to Business Insider, Facebook said it amended its policies on refunds for purchases made by minors in 2016.
The Center for Investigative Reporting has accused Facebook of "duping" children and their parents out of thousands of dollars after 135 documents unsealed in a class action lawsuit showed the company knowingly let minors accidentally rack up huge charges in online games, then refused to refund the parents' credit cards.
The documents show that Facebook referred to the practice as "friendly fraud," and said that employees "shouldn't try to block it." They also showed that in some cases Facebook employees voiced concerns that the minors didn't even know they were spending real-world money in games like Angry Birds and Petville."Seems like most of these games with FF [friendly fraud] minor problems are defaulting to the highest cost-setting in the purchase flows. This only exacerbates the problem since it doesn't necessarily look like 'real' money to a minor," one Facebook employee said in 2011.
One document from 2013 showed Facebook employees discussing whether to refund a bill of over $6,500 which a minor incurred on their parent's credit card. "I wouldn't refund," is the verdict.
A 12-year-old also managed to lose hundreds of dollars playing Ninja Saga, prompting the mother to launch a lawsuit against the social network.
A Facebook spokesman said in a statement to Business Insider that Facebook had changed its ways since the time when those documents were being written.
Here is the statement:"We were contacted by the Center for Investigative Reporting last 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. We have now released additional documents as instructed by the court. Facebook works with parents and experts to offer tools for families navigating Facebook and the web. 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."