Report: Facebook ‘Friendly Fraud’ Aimed To Rips Kids Off

Report: Facebook ‘Friendly Fraud’ Aimed To Rips Kids Off
Image: Facebook

Popular Facebook games like Angry Birds, PetVille and Ninja Saga encouraged children to spend money without their parents’ permission, according to recently unsealed documents. In some cases, it’s alleged the children weren’t even aware that their actions had a financial cost.

The report by Reveal comes from a court-ordered request for Facebook to open access to 135 pages of previously sealed documents. According to Reveal, they paint a picture of a company that “pursued a goal of increasing its revenues at the expense of children and their parents”.

The documents cover the period between 2010 and 2014 and include internal memos and plans. One of the plans, that wasn’t implemented, included a way to reduce the problem of children being tricked into spending money. The money in question came from children using their parents’ phones to play the games. As the parents used Facebook to pay for other products and services, they had credit cards linked to their Facebook accounts that the games the children played had access to as well.

In many cases, there was no indication that real money was being spent. Kids simply clicked on an icon for a new weapon or ability in a game and the money was debited from the credit card without conformation or further authorisation.

Reveal, which is part of the The Center for Investigative Reporting, says one 15 year old managed to rack up over $9100 in charges with Facebook refusing to refund the fees. The issue of parents seeking refunds was significant enough that the head of Facebook’s Risk and Payments team at the time, Tara Stewart, became involved. Stewart had foreseen the problem and suggested a solution that was ignored.

Facebook said in statement that it has updated its terms and conditions and internal practices to mitigate the risk of this happening again. And it has made the process for disputing charges and getting refunds easier. But the attitude and strategy of the company is the root issue.

Facebook has a history of trying to exploit its users for as much revenue as possible. That attitude is the underlying cause of seeing minors as a target for revenue. Like many fast growing companies, Facebook’s ethics and practices, and a system of checks and balances to ensure they are kept, haven’t kept pace.

Whether the company is able to play catch up at the same time as “Whack a Mole” as they deal with regular revelations of impropriety remains to be seen.

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