Published: Mon, January 28, 2019
Money | By Ethel Goodwin

Fooled Ya! Facebook Knowingly Tricked Kids Into Spending Parents' Cash

Fooled Ya! Facebook Knowingly Tricked Kids Into Spending Parents' Cash

"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.

CIR reports that while internal memos it obtained show that some within Facebook suggested the implementation of age restrictions on transactions worth over $75, the company never implemented any such initiatives. The story detailed the case of one 12-year-old boy who had spent almost $1,000 in the game Ninja Saga.

Documents that showed Facebook employees discussed whether to refund money to parents when it was obvious that a child had used its parents' payment information without the parents' knowledge, according to Gizmodo.

After a series of scandals, Facebook is under fire again over newly released documents that show an apparent pattern of exploiting minors for their parents' money. But the link was frequently unclear to parents and children. Calling the system a good "first step", Stewart noted that it "forces the minor to prove he is in possession of the credit card". Between 2008 and 2014, kids under 18 years old spent more than $34 million in purchases.

Rovio, the makers of Angry Birds, also noticed that refund requests from Facebook purchases were unusually high and wrote to Facebook expressing concerns.

The documents also state Facebook denied the majority of refund requests.

In 2011, a Facebook risk analyst flagged the issue, concluding that children things within games using their parents' payment information - stored by the company after an initial purchase - didn't know what they were doing, Gizmodo reported.

The use of such language coupled with the fact that in at least one exchange a Facebook employee referred to a user seeking a refund as a "whale" (casino slang for a high-wager gambler) led some media to accuse the tech giant of turning a blind eye to the problem or even encouraging minors to squander vast sums of money online.

According to the report, the company "orchestrated a multiyear effort that duped children and their parents out of money, in some cases hundreds or even thousands of dollars, and then often refused to give the money back", despite "years" of warnings from employees concerned "that [Facebook] was bamboozling children".

As part of the settlement of the 2016 case, Facebook said it works with parents and experts to provide tools for families.

"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 Menlo Park, California, company said in a statement last Friday.

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