Facebook Allowed 'Friendly Fraud' to Profit From Kids, Internal Memos Show

Facebook used games to make millions off children in 'friendly fraud'

Facebook accused of tricking children into spending thousands playing online games

For years, the company tried to tackle the issue of kids unwittingly spending large sums of their parents' money by playing games on Facebook, newly unsealed court documents say.

Games included in the report include Angry Birds, Wild Ones, Barn Buddy, Ninja Saga, Petville, and others.

The report goes on to say that Facebook knew that many of these children didn't know they were making purchases, but continued to offer the products anyway, even after developers came up with a fix.

Yet another internal report shows that Facebook employee Tara Stewart actually suggested refunding some of these parents for friendly fraud.

One parent allowed her 12-year-old son to use her credit card to play Ninja Saga on the site with an initial fee of $19.95.

News of the company's stance comes from internal documents used in the class action lawsuit.

Despite recognising the issue of children spending large amounts of their parents' money, Facebook's internal documents - released earlier this week - show that the social network developed systems to prevent minors from overspending, which it then actively made a decision to ignore.

The files, which span from 2010-2014, were unsealed after legal action was taken by revealnews.org and are now part of a class action lawsuit aimed at Facebook for targeting children. It said that "in almost all cases, the parent. didn't think the child would be allowed to buy anything without their password or authorization first". In 2011, Facebook execs noticed its "friendly fraud" problem due to the amount of charge-backs game developers on its platform were reporting.

Through surveys, Facebook reportedly learned that children were not aware they were spending "real" money.

She ran a test to see if the entering the cards first six-digits would reduce these unwanted charges and the results were encouraging.

"We have now released additional documents as instructed by the court", a Facebook spokesperson said, in a statement emailed to Fox News.

Facebook is once again in the news, and not in a good way, according to a report citing court documents.

"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. "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 purchases made by minors on Facebook".

Facebook told Fox News that it was contacted by the Center for Investigative Reporting previous year and voluntarily unsealed documents related to a 2012 case about the company's refund policies for in-app purchases that parents believe were made in error by their minor children.

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