Facebook memos show reluctance to prevent 5-year-olds from making accidental purchases

Facebook memos show reluctance to prevent 5-year-olds from making accidental purchases 1

New Facebook documents revealed yesterday shows the company’s attitude towards children spending their parents’ money to be flippant at best… and gross at worst.

We first began to hear rumblings about these documents and what they reveal about Facebook and gamer kids last week, when Reveal from the Center for Investigative Reporting showed snippets. A court ordered Facebook to unseal all of the documents within ten days.

Now Facebook has done just that, revealing the documents. Its policy towards young gamers was, somehow, even worse than it seemed at the time — if only because the company was actually close to coming up with a solution several times.

Most of the documents refer to the practice of people spending money without realizing it as “friendly fraud.” One of the documents says developers “shouldn’t try to block it” even though one of its own categories was listed as “friendly fraud minor.” Several other documents reveal employees weren’t comfortable with the practice of children being preyed upon for their in-game revenue.

One of the documents shows a conversation between two employees about the game Angry Birds. Developer Rovio were apparently unhappy with the amount of refunds requested after the launch of the game on Facebook. When the employees researched the causes for the refunds, they found an overwhelming amount of them — 93 percent — were classed as “minor using app on parent’s/grandparent’s account.”

Over half of the parents and grandparents admitted the age of the child in question, and the average age was found to be about five years old. According to the employee, the adults didn’t realize their card would be charged without their permission: “In nearly 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).”

Given the mention of iOS’s preventative measures, you’d think that would lead into discussion about how to implement a similar one for Facebook. But, as one employee warned, trying to build anything to reduce this friendly fraud could potentially block “good TPV [total purchase value].” And apparently it was “really important for Angry Birds to be a success story.”

Some might say it’s the parents’ job to prevent kids from making purchases, not Facebook‘s. But that doesn’t mean Facebook should have carte blanche to accept money from users it knows are small children.

One concerned employee said, “it doesn’t necessarily look like ‘real’ money to a minor.” She also suggested, “If developers are really more concerned about [chargebacks] and not refunds it could make sense to start refunding for blatant FF-minor.” For clarity, “FF-minor” is the practice of children accidentally spending money, and chargebacks are a demand for reimbursement issued by the credit card company.

For the record, that same employee ran a test that required the user to enter the first six numbers of the credit card in order to play their game. While it wouldn’t deter those who asked for refunds out of remorse, one of her colleagues did express the hope it would “keep kids from running rampant with their [parent’s credit cards].”

However, she does note at the end of the report that it “blocked a fair amount of users from purchasing in the test apps.” There’s no evidence the six-digit safeguard was ever implemented.

As if that wasn’t icky enough, the same document that urges developers not to block friendly fraud also suggests, under an item titled “developer refund best practices,” that they offer “virtual items instead of $$$” because “virtual goods bear no cost.”

Besides the above, some of the documents suggest Facebook was attempting to automate a dispute process to counter customers who made chargeback requests. Another has an employee point out that only about 50 percent of customers appear to be getting emailed receipts for their charges.

Last week, we learned that Facebook referred to the children who ran up large charges as “whales” — a slang term for a big spender more commonly heard in casinos. It seems even more wrong now that we know how far the company went to keep those kids spending that money in ignorance.

We’ve contacted Facebook for more information, and will update if we receive comment.

Facebook knowingly duped game-playing kids and their parents out of money on Reveal News

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