Facebook lawsuit reveals ‘friendly fraud’ tactics it employed against underage online gamers

    
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For many of us, Facebook use is something we do grudgingly — we’re never quite liking the social platform, but we’re also unable to completely disconnect from it. From selling your information to third-party vendors to filtering the news we see (or don’t), Facebook has taken a lot of deserved flak for its nefarious practices.

So stack this one onto that pile as well: The social network apparently knowingly engaged in “friendly fraud” tactics for years now to manipulate and scam children in online games. Friendly fraud, according to the company’s memos, is when a game manages to get a kid’s parent’s credit card information for an initial purchase and then slyly starts racking up additional transactions as the kid unknowingly clicks on different parts of a game.

As part of a class action lawsuit that started back in 2012, a judge has recently ordered Facebook to reveal its anti-consumer practices via internal memos that appear to educate and encourage developers to continue implementing friendly fraud into their titles, even after Facebook’s own internal research proved that almost none of the players understood they were being charged. Polygon reports that if the lawsuit is successful, it could force Facebook to repay families millions that have been spent by their children in games like Ninja Saga over the years. Let’s call that “friendly retribution.”

Source: Polygon, Reveal
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David K

(((facebook)))

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David K

Lol

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donvweel

This part of a much bigger picture. European countries are also moving aginst lootboxing and other predetory greed practice. A number of companies are going to have to rethink their business model or suffer losses when revenue crumbles. Age limits on sales of these games are already established. https://www.reddit.com/r/Games/comments/7x4uoa/loot_box_legislation_established_in_the_state_of/

kjempff
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kjempff

Apple did the same with in app purchases on the AppStore. Allowing auto purchases from games when you had entered a credit card, and obviously targeted children. There were lawsuits and a shitstorm but I don’t remember if Apple actually removed it or only reduced the period of auto purchase after a buy.

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Blaaznar

You could disable in-app purchases as far as 2009…

Block YouTube and/or App Purchases on iPhone or iPod Touch

Giving your kids unmonitored access to a phone that has your credit card credentials saved and no restrictions is just asking for trouble.

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David Goodman

it’s still not the victim’s fault.

kjempff
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kjempff

Yeah that is not what I am talking about.
It is about the functionality that after a purchase, you could buy in-app stuff instantly without going to the AppStore. Either this was permanent and changed to only 2 hours after each purchase or it was 2 hours and then removed .. thats the part I can’t remember.

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Christopher Angeles

I think this same thing happens in almost every app store. Game mechanics that target children or even gambling addicts, to squeeze out every penny from the player. I’m not surprised that mobile is making so much money compared to MMOs and even console/PC single purchase titles.

Mordyjuice
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Mordyjuice

I’m disgusted but not remotely surprised.

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Chris Ochs

This is actually worse then most think. First part of my career was working in the online payments industry, as a partner in an online payments company.

It’s the merchant banks that really enable this. There is no incentive for them to care, they do whatever they can get away with. They intentionally ignore things that might get them into trouble. Card transactions can be tagged with descriptors for all sorts of things. But I’ve seen banks intentionally ask for descriptors to not be used when the thing they would track could make the bank potentially liable. I’ve seen companies sustain 30% chargeback rates and not get shut down. Waiting for it to blow up in the media in some way before taking any action.

Merchant banks should be requiring descriptors for age. Legally yes parents are responsible. Practically speaking using that as a shield doesn’t hold up in the face of reason. The only way policing this works is to make merchant banks more accountable.

I was on the periphery of an incident that ended up cleaning up some of the worst practices back around 2000. Banks were actually giving merchants their ‘white list’. Their database of credit cards known to be good repeat customers. Just handing that over to merchants without even a background check. They didn’t feel any obligation to safeguard that information. And sure enough eventually a merchant billed that entire list, defrauding 900,000 customers. The banks in question got shut down officially. But really they were just acquired and continued on under a different name.

The attitudes in the industry have not changed. The line just moved a bit as to what they can get away with.

Joey Desarno
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Joey Desarno

Like EA and Bethesda and Activison always wanted :Show me more places to get money.

Random MMO fan
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Random MMO fan

I have 0 issues with “manipulate and scam poor children” – those “poor children” should have parents or other adults who should be the ones to observe them, including thoroughly evaluating the behavior of any game before letting the kid use their credit card for any purchases for this game and maybe not allowing their children to use credit card for ANY site or game which will store it for any reason. If the parents/legal guardians are too lazy or too dumb to do that – this is a fault of those people, not FB.

I’m just surprised so many people STILL use FB for anything – its layout is fucking awful, the apps are known for consuming significant amount of battery (on Android platform) and there are many other tools to keep in touch with family members and friends.

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McGuffn

No, this is awful and it’s not limited to facebook. However, this is also why you should remove the credit card information after purchase.

Random MMO fan
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Random MMO fan

Like I said, it’s only “awful” if you’re lazy or stupid. And I would never blame a company who uses clever tricks to exploit such adult people because it’s a 100% fault of those people.

And yes, personally I do not let companies to store my CC info, unless it’s a subscription MMO or a company which gives discount for auto-pay.

Bree Royce
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Bree Royce

Good thing the law protects even lazy and stupid people from cons and scams that are created to prey specifically on them. Don’t give FB a free pass for preying on five-year-olds ffs. Not everyone is as savvy as you.

Bree Royce
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Bree Royce

Exactly. FB was designing these things to trick adults into thinking their cards were safe, when they were not. Blaming the victims here is bizarre.

Random MMO fan
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Random MMO fan

for preying on five-year-olds ffs

But that’s not what is happening, Bree. I’ve already explained in my previous post – it’s ALWAYS up to parents whether the children will use their CC for something they don’t want to. Doesn’t matter if it’s an unauthorized in-game purchase (regardless of the way it is implemented) or things like donating money to favorite Fortnite streamer or using CC to gamble on weapon skins for CS:GO. You CAN avoid ALL of this as a parent, regardless of the age of your children. I don’t understand why this fact is so hard to understand…

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Bruno Brito

I don’t understand why this fact is so hard to understand…

And no kids would use drugs, ever.

Yeah, sure.

Bree Royce
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Bree Royce

Facebook’s memos show they were knowingly targeting young children it called whales in order to swindle their parents, who had been intentionally tricked into believing their cards were safe in games that were with Facebook’s help designed to fool the user into not understanding real money was changing hands. It’s exactly what was happening. That’s not my dramatic flair; it’s in the memos. Read the Reveal piece. This is why people are so angry.

What you’re doing is saying, well if you got conned by a con man, it’s your own fault for being dumb – but in this country cons are illegal, so no, the victim is very literally not at fault. That’s why this lawsuit exists and why past victims have won similar lawsuits.

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Utakata

Speaking of gullible, this makes me appreciate that our laws are not dictated by clueless opinions on the internets. Just saying. >.<

Random MMO fan
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Random MMO fan

Ok, I did read that article, to the point of this part:

“As he played, he occasionally clicked on a corner of the screen that gave him more abilities, such as magical items, or new ninja attacks for his character. It didn’t ask if he wanted to pay for it, or let him know that his mom’s credit card was being charged.

“There was no indication he was spending money,” Bohannon said. “So, 20 minutes later, I rechecked my credit card statement online. And sure enough, there was another $19.99 charge from Facebook.”

And I do agree that in this particular case it is wrong and unacceptable to do things like these (automatically repurchasing the in-game currency or items for real $$$ with 0 notification to user that real life $$$ are being used for purchase) and users definitely deserve refunds for these things (regardless if it was a kid or an adult).

So yes, there’s no excuse for doing this since this is a perfect example of a fraud and it is hard to catch it even for adult. I do still believe that in other cases (where the game does notify users that the purchase will cost them real money each time the user tries to buy any item or in-game currency) is not the fault of the company and a fault of the person who is using own CC or letting others use it.

Bree Royce
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Bree Royce

Just notifying isn’t good enough either when your own metrics show the average age of the kids playing your game is 5. Not all kids can read well enough at that age to understand what they are agreeing to, not that they can legally agree to a transaction like that anyway. (That’s extra damning for FB, really – that they tested it and found requiring a partial CC to be manually entered each time basically solved this problem… and then they didn’t implement it. Because money.)

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Schmidt.Capela

(That’s extra damning for FB, really – that they tested it and found requiring a partial CC to be manually entered each time basically solved this problem… and then they didn’t implement it. Because money.)

You can do things for the money without crossing into criminal behavior. Most people that have bills to pay do so. In this case, though, Facebook was very intentionally acting like a crook, and sincerely whoever decided to never fix the issue in order to (again, intentionally) scam their users should be behind bars.

Bree Royce
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Bree Royce

Yep, that’s what I’m saying.

Random MMO fan
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Random MMO fan

And not every child asks permission to use a parent’s credit card, either, unfortunately.

I understand that, but once again, you CAN prevent that – store your CC information better (so your children will not be able to find it without your authorization) and punish your kid (appropriately) until he/she will learn not to take your things without your permission.

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Chris Ochs

The main issue here is how merchants and banks make it so difficult to correct for. Intentionally. They know people will just not go through the hassle if the amounts are small. A lot of companies make getting refunds difficult on purpose for this reason. It’s the ridiculous cases involving larger amounts that finally get attention, but by then thousands of people have effectively been defrauded.

Random MMO fan
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Random MMO fan

The main issue here is how merchants and banks make it so difficult to correct for. Intentionally. A lot of companies make getting refunds difficult on purpose for this reason.

Yes, that is true, and that is something I do want to see changed. I did have to deal with game refund some time ago, not because of irresponsible purchase by someone but because it did not perform as I expected and refunding through the publisher was impossible, so I had to involve the bank, which also took some time.

So yea, I would definitely like to see much better refund policies, regardless of the reason the customer wants to refund it for.

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Bullwraith

You only think its not being captured and stored. If you type it into a web browser, they’ve got it.

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Sorenthaz

It’s really screwed up how far companies will go to make $$$ even to the point of exploiting naive kids.