Facebook's internal documents revealing how it made money off minors, unsealed

This is related to the 2012 lawsuit against Facebook where minors unknowingly spent money on games.

In April 2012 a lawsuit was filed against Facebook, saying that it let children use their parents’ credit and debit cards to buy the virtual currency called Facebook Credits, and that it violated California law by refusing refunds under its "all sales are final" policy when the parents complained.

Now, a wealth of documents, which are a part of the same class-action lawsuit against the social media giant, have been revealed and they detail how it made money off children.

According to a report by Reveal, a federal judge announced the existence of these documents which will soon be released. The report also notes that Facebook’s own employees worried they were tricking children and making thousands of dollars in game charges.

Facebook CEO Mark Zuckerberg. Image: Reuters

Facebook CEO Mark Zuckerberg. Image: Reuters

The court documents were revealed on 14 January, after being hidden for years. The publication Reveal which is an outfit run by The Center for Investigative Reporting, a nonprofit news organization California, had requested for these records to be unsealed in 2018. "There is increased public interest in Facebook’s business practices in the wake of high-profile scandals, including fake news published on the site and the leaking of user data," it says.

A few documents uncovered regarding the same case, last year in October, reveal that, in general, there is a massive confusion that both children and their parents have about being charged on Facebook for playing games. They do not understand how they are charged.

It's like Facebook found the vulnerability of its consumers and used it to its benefit by letting advertisers target them even better. Company employees themselves were concerned that people were being charged without their knowledge.

Representational image. Reuters.

Representational image. Reuters.

Bohannon vs Facebook

In the 2012 case, the lead plaintiff was a child who used his mother, Glynnis Bohannon's credit card, without his knowledge, to pay while playing a game. He "believed these purchases were being made with virtual currency, and that his mother’s credit card was not being charged." When Bohannon requested for a refund, Facebook denied it.

Steven Wright, another plaintiff, went through something similar with his child and was charged over $1,000.

Bohannon v. Facebook by on Scribd

US District Court Judge Claudia Wilken, had then ruled that the minors, but not their parents, could fight Facebook for refunds.

It was contended in the Bohannon vs Facebook case that Facebook "routinely refuses requests by children and their parents and legal guardians to provide refunds for transactions that are subject to disaffirmance under California law."

Finally, the case was settled, and the plaintiffs received refunds. Also, Facebook Credits were discontinued in 2013 and replaced with Facebook Payments.

What now?

After the revelation that documents detailing how it made money off children exist, the court has ordered that the social media company has a total of 10 days to make the documents public.

One internal memo was found stating that "in nearly 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 authorization first."

Further, even though a company representative said that children get confused by the in-game purchases. It doesn't occur to them that it's real money and not virtual money, Facebook continued the practice.

Facebook is definitely expected to face a backlash in the coming week.

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