Just in case you needed another reason to hate Facebook, it has now been revealed that the social media giant intentionally duped children into spending their parents’ money on video games within the platform and then refused to refund the money. Their actions are bad enough on their own, but the fact that they had the gall to refer to the practice internally as “friendly fraud” is not going to help the company improve its already-damaged public image.
Unsealed court documents show how the company tricked kids and their parents into spending their money on in-game purchases in free-to-play games. According to the 135 pages of documents, which includes internal memos and employee emails, the company was all too happy to defraud users playing kid-geared games like Happy Aquarium, Ninja Saga, Barn Buddy and PetVille.
Even though Facebook’s own reports indicated that underage users often failed to realize their parents’ credit cards had been tied to their Facebook accounts, they did nothing to stop it. In fact, when a team offered them a suggestion on how they could stem the problem by requiring the first six numbers of credit cards to be re-entered before in-game charges could be made, they decided against heeding their advice and instead told game developers that maximizing revenue was their main objective.
An internal survey carried out by Facebook revealed that many parents were not aware that Facebook stored their credit card information, nor did they realize that their kids could incur charges to their credit card without some sort of verification, like re-entering a password.
Another internal report at the company showed that they knew the in-game purchase choices defaulted to the most expensive option. Facebook, for its part, was happy to watch the profits add up, referring to some kids as “whales” because of their high spending.
Rovio, the maker of Angry Birds, emailed Facebook to express concern about the high refund rates; the average age of those who played the game was just five years old.
Taking advantage of children and their parents
One child racked up charges of $6,500 in the course of just two weeks playing the game, and countless others racked up smaller unwanted charges. In many cases, Facebook refused to refund the money. Some parents were able to get some money back by pursuing it with their credit card company, while others enlisted the help of the Better Business Bureau, but many others were unsuccessful in getting their money back.
Facebook’s chargeback rate was nine percent, which was well above the “red flag” level identifying deceptive businesses set by the Federal Trade Commission of two percent. According to the Merchant Risk Council, the average chargeback rate for all businesses is just 0.5 percent.
The CEO of the Common Sense advocacy group, James Steyer, told USA Today: “The fact that Facebook knowingly duped these kids and families is nothing short of outrageous. It demonstrates a willful and callous disregard for the well-being of kids and families and reveals a disturbingly unethical culture at the company.”
Facebook intentionally ripping off children and their parents is just the latest in a long list of scandals that highlight the company’s greed and lack of ethics. In recent years, the platform has attracted lots of negative press after incidents like Russia’s attempt to use it in order to influence the presidential election, privacy issues, and its blocking of conservative news on the pretense that it was “fake news.” If you're still using Facebook, it's time to get off of this sinking ship.
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