The documents also show that Facebook typically refused refund requests when it received them from cardholders, according to the report. More than 100 pages of documents released on Thursday night, part of a 2012 lawsuit, show that Facebook was aware children spent large sums of money on game apps without parental consent. Facebook employees also reportedly used the term "friendly fraud" to refer to purchases made by children without their parents' permission.
In a 2013 discussion between two of the company's employees, a 15-year-old Facebook user who had spent about $6,500 playing games is described as a "whale" - a term that gambling casinos use to describe people who make them a lot of money. Bohannon was unable to dispute the charges with Facebook; she filed a lawsuit, but was treated "terribly", her lawyer told Reveal. A federal judge ordered the documents, which are from 2010 to 2014, to be unsealed after a request from the publication.
The documents released Thursday night are part of a 2012 lawsuit against the company, which alleges that Facebook knew kids were making the purchases and made it hard for parents to get their money back, CBS News reported. One internal study of the issue concluded, "In almost all cases the parent 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 (like in iOS)". One deposition shows Facebook employees were reluctant to reduce this "friendly fraud" because it would likely also reduce the company's overall revenue. The child was apparently unaware that they were buying the currency, which was being charged to the mother's credit card linked to the account. A charge-back rate of 1% is considered "high" by Visa and Mastercard, and the credit card companies will put any business with a 1% charge-back rate on probation programs.
Under the settlement, refunds were issued for purchases minors made between 2008 and 2015.
"We have now released additional documents as instructed by the court", a company spokesperson wrote in an emailed statement. Another employee mentioned that only 50 percent of Facebook users were receiving email receipts. Facebook works with parents and experts to offer tools for families navigating Facebook and the web.
"We were contacted by the Center for Investigative Reporting previous year, and we voluntarily unsealed documents related to a 2012 case about our refund policies for in-app purchases that parents believe were made in error by their minor children". In 2016, this lead to an update to the social network's terms and conditions that would provide "dedicated resources for refund requests relation to purchases made by minors on Facebook".