Facebook made millions by fooling gamer kids through ‘friendly fraud

Typically, if an unexpected purchase happens from a minor, a corporation takes steps to secure the refund is received. However, Facebook reportedly involved in a ‘friendly fraud’ to support children to spend thousands of currencies on games without their parents’ permission.

As per an a study by Reveal, the social network set up a multiyear effort that victimized children and their parents out of cash and often declined to refund the money.

The class-action lawsuit indicates how Facebook targeted children in an effort to expand revenue for online games, such as Angry Birds, PetVille, and Ninja Saga.

As part of this ‘friendly fraud’, Facebook allowed developers to let long-spending children, called ‘whales’, contribute money without their parents’ permission, in order to maximise revenue.

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In some cases, the kids did not even realise that they were using money from their parents’ cards. Meanwhile, some parents were still unconcerned that Facebook stored their credit card information and when they would arrive out to credit card corporations to take their money back, it would serve to Facebook racking up chargeback rates as large as 9 per cent of the revenue.

Even as the corporation employees suggested some measures to not bamboozle kids, Facebook clearly rejected these. Between October 2010 and January 2011, Facebook made a whopping USD 3.6 million from game purchases by small chidrens.

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