Facebook Knowingly Charged Children, Committed “Friendly Fraud”

Friendly Fraud on Facebook

Facebook knowingly misled children into spending money to play games on its ad platform, according to a set of unsealed court documents reported by Reveal News.

The documents revealed that Facebook allowed, and in some cases encouraged, developers for online games like Angry Birds and Petville to charge children on their parents’ credit cards, a practice the company referred to as “friendly fraud” in its internal memos. Employees apparently warned the company about the practice and proposed solutions to prevent unintentional purchases by children, none of which were implemented.

Charges racked up by children often amounted to hundreds or thousands of dollars. One internal memo includes an exchange between two Facebook employees discussing $6,545 in disputed charges by a teenager who “looked underage,” The employees referred to the teen as a “whale ticket,” a term coined by casinos for customers who spend larger amounts of money. Her refund was refused.

Despite years of complaints and attempted chargebacks by parents, concerns voiced by app developers, and warnings from employees, Facebook continued the practice until 2016 when it settled a lawsuit filed by several families, but was then, for the most part, sealed.

“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 purchased made by minors on Facebook,” the company said in a statement.