Memos: Facebook Allowed 'Friendly Fraud' to Profit from Kids

Memos: Facebook Allowed 'Friendly Fraud' to Profit from Kids

The documents cite internal Facebook memos, "employee emails and more", according to One document shows the social networking company knew the average age of Angry Birds players was just five years old. Bohannan was shocked when she opened that bill.

Many people were also unaware Facebook stored their credit card information, according to a survey conducted. "If you are not logged into Facebook and click on 'View Receipt Online, ' it directs you to a general page that doesn't have a clear path to dispute with us", the document reads. "No symbol of my visa card, no symbol $19.95 with the dollar symbol". Despite its recognition of the problem, internal discussions show that Facebook decided it would be best to fight refund requests and allow the problem to persist.

Facebook has been accused of not caring if game companies diddled children and their parents out of millions of dollars with in-game purchases, following the unsealing of United States court documents. Facebook said it released documents after being instructed by the court, having already voluntarily unsealed documents following a request from the Center for Investigative Reporting.

In an effort to tackle the problem, a team of Facebook staff put together a policy that would require children to re-enter some card details before they could buy the in-game items, to prove they had their parents' permission.

"Nina Saga" is one of the Facebook games mentioned in the class action suit. One internal study of the issue concluded, "In almost all cases the parent knew their child was playing Angry Birds, but didn't think the child would be allowed to buy anything without their password or authorization first (like in iOS)". Facebook employees knew this.

Internally, the company described the problem as one of "friendly fraud", and one staff member, who was in charge of a project to increase the company's game revenues, said it was particularly bad with a few games, including "PetVille, Happy Aquarium, Wild Ones, Barn Buddy and any Ninja game".

Under the settlement, refunds were issued for purchases minors made between 2008 and 2015. "I felt this could be a family's rent or the vehicle payment, or their grocery money, and that this was wrong". In 2016, Facebook chose to settle the case, paying two families $US5000 ($7044) and agreeing to change its practices.

Facebook issued the following statement to Tom's Guide: "We were contacted by the Center for Investigative Reporting previous 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". They were hesitant to stop the practice because it would hurt the company's revenue.

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