"Friendly fraud": Documents show Facebook used games to make money off of kids
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. More than 100 pages of documents released on Thursday night, part of a 2012 lawsuit, show that Facebook was aware children spent large sums of money on game apps without parental consent. The suit alleges the social media giant made it difficult for parents to get their money back.
The judge ordered Facebook to release internal emails, messages, and employees' depositions that were previously sealed as a result of legal action by Reveal from the Center For Investigative Reporting. \
Glynnis Bohannan let her 12-year-old son use her credit card to play the game Ninja Saga on Facebook, but the initial fee of $19.95 mushroomed into charges totaling nearly $1,000. Bohannan was shocked when she opened that bill.
"I wanted to know what my son was doing because I told him it was only a one-time transaction. He's like, 'I'm not using your card,'" Bohannan told CBS News' Carter Evans.
What he didn't realize was that Facebook had stored his mom's credit card and was charging it as he played the game.
"I said, 'show me what you are doing,' so there was a little stack of coins and it would get low and it would blink at him and he would hit it and it would go brrrring and the coins would shoot up again," Bohannan said. "No symbol of my visa card, no symbol $19.95 with the dollar symbol. Nothing! Just like he had told me."
This practice was widespread, according to newly released court documents. It was known at Facebook as "friendly fraud," meaning a minor was using the app on a parent's or grandparent's account. Bohannan filed a lawsuit after finding it impossible to reach Facebook for a refund. The case ultimately grew into a class action suit.
"There's no way that they didn't know these transactions were originating from Facebook accounts that were assigned to minors," said Bohannan's attorney John Parker.
Newly released internal emails filed in court show that in 2012, Facebook analyzed refund requests on another game, Angry Birds, and found that more than 90 percent were because of "friendly fraud." It said that "in nearly all cases, the parent... didn't think the child would be allowed to buy anything without their password or authorization first."
One deposition shows Facebook employees were reluctant to reduce this "friendly fraud" because it would likely also reduce the company's overall revenue. According to court documents, the company calculated that between 2008 and 2014 minors under 18 made purchases on Facebook totaling more than $34 million.
"I think it was all driven by greed and money," Bohannan said. "I felt this could be a family's rent or the car payment, or their grocery money, and that this was wrong."
Bohannan's case was settled in 2016. In a statement, Facebook said, "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."
After what she's been through, Bohannan wants others to know that they should be careful.
"They've changed some of their practices but initially when they went into buying and selling things on Facebook, they didn't have proper, safe practices."