Just when you thought you couldn’t think worse of Mark Zuckerberg and his highly profitable social media and advertising website Facebook, you find out he and his company have been knowingly defrauding American parents through their children’s online activities for years.
The international corporate giant is now battling a number of legal actions, all of which revolve around business ethics and illegal user data sharing with profit-driven third parties.
For years, parents have been complaining when they open a credit card bill and find, much to their surprise, extra charges for online games played by a youth in the household whose account had been linked to an account-securing parental credit card. When confronted, the children usually said they had no warning or indication that what they were doing online was costing Mommy and Daddy real money – they thought the gaming money was a fiction, just “play pretend.”
In 2019, Facebook is being held accountable in multiple courtrooms across the United States for its alleged crimes related to dodgy business practices.
When upset parents contacted Facebook to ask for a full and cheerful refund of the money charged to Junior’s parental credit card (called a chargeback), the Facebook’s Customer Service Department representatives said, “No.”
Outraged parents appealed to the Better Business Bureau (BBB) or, as a last resort, filed a legal action.
Some of these wronged parents also went directly to their credit card companies to arrange to get their money back, saying they had been swindled.
The amount of credit card revenue charged back from unauthorized third-party vendors was large enough to trigger a red flag by the Federal Trade Commission for deceptive business practices.
Parents reported unauthorized charges in the tens, hundreds, and thousands of dollars. In just two weeks, one 15-year-old gamer cost his parents $6,500 on Facebook. No monies were returned to the understandably distraught parents.
Large groups of defrauded parents have joined forces to hire lawyers who specialize in winning back their hard-earned money legally.
Earlier this year, on Jan. 14, 2019, U.S. District Court Judge Beth Freeman ordered Facebook to unseal more than 135 pages of documents relevant to a class-action lawsuit, brought by unhappy parents. The allegations are “focused on how Facebook targeted children in an effort to expand revenue for online games, such as Angry Birds, PetVille and Ninja Saga.”
Judge Freeman argued that the public has a right to know the details of how Facebook targeted children.
On Jan. 24, Facebook had to unseal all the court-requested documents, which date from 2010 to 2014, with a few exceptions. The judge allowed some of the documents to be released with partial redactions blanking-out identifying information, especially names and places.
The unsealed documents reveal that Facebook knowingly and willfully racked up excessive gaming charges and targeted underage users who played third-party games, kids who often didn’t know there would be a fee for playing the game.
Facebook employees called children who brought in a lot of revenue “whales,” – which is a casino industry term for a cash cow – both rather unpleasant terms for valuable customers who spend a lot of money.
The worst part of this deplorable business is that when an internal group of ethical workers at Facebook spotted the problem eight years ago and started working on solving it, their employer shut them down, preferring profits the easy (and illegal) way.
This may turn out to have been a really bad move by Facebook executives.
On July 8, 2011, Facebook employee Tara Stewart sent her coworkers an email about the large number of credit card chargebacks being processed:
“If the dev[elopers] are really concerned about the cbs [chargebacks] and not refunds it could make sense to start refunding for blatant FF-minor [friendly fraud involving a minor].”
A couple of months before sending that email, Stewart had started a project to reduce credit card company chargebacks from parents unhappy about surprise gaming fees.
In 2011, Stewart named PetVille, Happy Aquarium, Wild Ones, Barn Buddy, and any Ninja game as particularly abusive. She and her colleagues began to devise a way to prevent children from charging their parents’ credit cards.
An internal survey on Facebook showed that many parents did not know that the company had stored their credit card information in association with their child’s account. Parents also didn’t know that Facebook encouraged kids to keep on gaming – have fun! – all the while charging parental credit cards without requiring a password or other security challenge before transferring funds online.
Stewart’s Facebook group edited the gaming software to require children to re-enter the first six digits of the credit card number on certain games before they could spend money. Stewart thought this was a “good first step” which actually had the desired effect: the number of chargebacks declined.
Normally, you would think that these results would get a pat on the back from your manager and possibly a cold, tall one after work, but not over at Zuckerberg’s place of business.
Facebook’s executives turned their backs all good business practices, morals, and ethics. Children would be targeted as “whales” and their parents would be forced to drive up Facebook’s bottom line through greedy (and possibly illicit) revenues.
Now, American Justice will decide if Facebook done those parents wrong and, if so, what’s to be done about it.
The irony here is, of course, that Facebook regularly suspends their users’ accounts for violating Facebook’s published “Community Standards” – a good-behavior code of conduct that is supposed to establish and enforce a happy and friendly webnorhood (a word we just made up).