An official inquiry by Reveal of the Center of Investigative Reporting has led a judge from US District Court to release more than one hundred pages of information from a settled class-action lawsuit that uncovers Facebook’s knowing participation in fraudulent activities with its online game collaborations. The pages of documents brings to light the “Friendly Fraud” issue of Facebook allegedly providing a platform for kids to spend up to thousands of dollars in some cases on games such as “Angry Birds“, “Ninja Saga”, “PetVille” and more without parental consent while reportedly making the issue of chargebacks and refunds a complex issue.
According to Reveal, documented proof from Facebook dated between 2010 and 2014 included ” employee email, secret strategies and internal memos, paint a troubling picture of how the social media giant conducted business.” They also found that these documents proved the company “encouraged game developers to let children spend money without their parents’ permission – something the social media giant called “Friendly Fraud” – in an effort to maximize revenues”.
Allegations in these documents also included Facebook reluctant or unwilling to provide refunds to parents in certain cases including one in particular where a 15-year-old generated a $6500 debt that upon inquiry for removal was denied by the social media giant. Reveal also noted that the company was made aware of the issue at an early stage but debated on whether to act accordingly because of a loss of revenue due to chargebacks and credits.