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New Facebook lawsuit highlights trouble with kids and virtual currency
New Facebook lawsuit highlights trouble with kids and virtual currency
April 20, 2012 | By Mike Rose

April 20, 2012 | By Mike Rose
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    37 comments
More: Social/Online, Business/Marketing



Facebook is facing legal action from the parent of a teenager who claims that minors are able to purchase Facebook Credits for use in games on the social network, and that this goes against California's consumer protection laws.

Glynnis Bohannon has filed a complaint against the company with the U.S. District Court for the Northern District of California, demanding a refund, not only for the purchases made by her son, but also for those made by all minors in the U.S.

This isn't the only recent instance of companies getting in trouble over minors purchasing credits for social games. A U.S. District Judge has chosen to uphold a handful of claims that Apple distributed free iOS apps that trick children into money in-app purchases.

Children are legally allowed to create a Facebook account from the age of 13 -- however, Facebook's rules state that any child under the age of 18 must ask for a parent's permission before purchasing Facebook Credits.

Bohannon alleges that this goes against consumer protection laws in the state, and is now seeking refunds from Facebook for, according to the legal documents, "all parents and legal guardians in the United States whose minor children made unauthorized purchases of Facebook Credits from the minor child's Facebook account," to the tune of $5 million.

The apps in question in this case most often target young children, and urge them to buy additional items to succeed, with kids sometimes racking up huge credit card bills.


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Comments


Eric Geer
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This is not a Facebook issue.

If you give your kids free reign on your credit card....

Well, to put it bluntly, you are an idiot.

Joe McGinn
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Nonsense. Because parents are supposed to be responsible - and in most cases, are - there should be no child protection laws?

The "we don't need to protect kids it's the parent jos" is the weakest, laziest argument in history.

Todd Boyd
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You guys are missing the point -- minors are not supposed to be able to purchase them, PERIOD. Whether or not they have their parents' permission (or even if they use their own debit card) has nothing to do with it.

E Zachary Knight
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And how do you stop a minor from buying something online when it is very easy to falsify their age?

Ryan Marshall
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Don't market to children? You can stop a minor from buying something by not creating a product that a minor would want to buy.

E Zachary Knight
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Ryan,

Not sure I follow that logic. Lots of kids want to drink alcohol and smoke cigarrettes, so we should just stop making them? Lots of kids want to watch porn too. How do we draw the line between what is marketed to kids and what kids want to buy?

Joe McGinn
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"And how do you stop a minor from buying something online when it is very easy to falsify their age?"

A refund when you find out would be a good start - and would be automatic is there was the slightest truth to your implication that these companies are not deliberately targeting kids.

Kevin Reilly
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So developers should stop making games b/c parents of children can't stop them from using their credit cards without permission? Not sure what is up with parents today, but if I blew $$$ on my parents credit card then I would have had to pay them back.

Baron Zemm
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http://www.thedailyshow.com/watch/thu-december-8-2011/video-game-
dealers

We should hold crack dealers responsible for selling drugs either!! Lol

Zach Grant
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I'm dumb and didn't know is not a good defense for letting your kids have free reign on a device that is tied to your credit card. Educate yourself about what your kids are doing.

Looks like this dad learned a valuable lesson (though expensive) and so did the kids.

Lennard Feddersen
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Ryan said: "Don't market to children? You can stop a minor from buying something by not creating a product that a minor would want to buy."


Hard to get my head around this - games are only for adults now? My kids are going to be really bummed - glad I grew up when it was still OK for kids to play games.

All sarcasm aside this suit shouldn't be getting close to court - kids ask parents to use credit cards all the time. Parents, if they allow the use, should be paying attention to what the kids are doing with those credit cards.

Harlan Sumgui
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Kid's brains work differently than adults, game companies that cynically target children with their pay2win bullshit games are evil. But then again, so are the companies that target susceptible adults with their cynical Skinner box psychology. But society really does have an obligation to protect children from predatory game companies, adults not so much.

And as far as how the children paid for the in game garbage, who cares. If it is against the law, and they are using [i]FACEBOOK[/i] credits on FACEBOOK, then facebook is breaking the law by allowing these transactions.

Amanda Lee Matthews
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Society has no obligation to "protect" children from advertisers. Parents only have the obligation to say no if they do not wish for their child to purchase something.

Sean Rischar
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Harlan... take a look over here...
http://www.datagenetics.com/blog/december12010/index.html

These games are NOT targeted toward 13 year old children (despite the cutesy simple look of 99% of them) rather, 18-43 year old women.

Its not Facebooks fault that a pay system (thats used in almost EVERY other type of online store) was misused by a 13 year old. The 13 year old lied, used false information and otherwise deceived the website in order to obtain what he wanted.

There are dozens of safeguards against this very thing... parental locks and passwords, verification... all of which, when used properly, protect children. But when theyre not used properly, IE: Lack of Parent involvement, security can be circumvented about as easy as amazon or ebay when a parents kid has their credit card or debit card. All it takes is an e-mail, name on card, and address, all of which can be ambiguously, age anonymously obtained.

Ryan Marshall
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I suppose that mine was more of a direct response to E Zachary Knight, above. The only way to prevent a child from providing a false age is to give them no reason to do so.

It's a similar argument as for reducing online piracy by not designing media full of DRM and other headaches that only hurt legitimate paying customers.

I'll admit that my comment isn't terribly useful, but the further implication was that it's an issue you need to tackle on a much more fundamental level. You can't stop drugs by criminalizing them, as proven with alcohol and prohibition, but attaching a social stigma to bad behavior is actually pretty effective (cigarette smoking is way down in recent decades). You can't physically stop a kid from unwittingly making an online purchase (especially if Facebook seems to be retaining credit card information from previously authorized transactions), but you can change the culture to prevent the game companies from making such deceptive freemium and allowing them to escape with reputation intact.

Honestly, I've been tricked once or twice in the past by a game where I didn't know it was about to initiate a micro-transaction, but fortunately I was stopped because I never put in my credit card information in the first place. Another way to think about it would be like the mini-bar in a hotel; if you didn't know the gimmick, you might be tempted to think that it was just another service offered by the hotel, similar to the little chocolate mint that actually is free. They make money by tricking kids into buying things without realizing what they're doing.

Facebook is in a position where it could theoretically do something about this, and I think the argument here is that they should be obligated to stop these deceptive practices, just because they can, even though they aren't actually responsible. If that's the correct interpretation (which it may not be; I just skimmed the documents), then it's very similar to YouTube blocking copyrighted content or ISPs blocking illegal file-sharing (which is to say, there are good arguments on both sides, and the letter of the law is probably going to win out ... for now).

Amanda Lee Matthews
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I'm an adult, and I love free games with microtransactions. I also love games that my kids like, because that means they will play with me. Don't take games like that away from me. A better solution would be for parents to use their brains and parent. Be involved in what your kids are doing. Find out if your credit card information is saved, and if so remove it. Just like DRM and ISP blocking, getting rid of games like this would only block legitimate buyers (people that WANT to buy things in games or let their kids buy things in games).

Amanda Lee Matthews
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Awhile ago I was at the grocery store, and I asked my daughter to help me pick out some cereal. She said "How about this one?" and then I realized that all the sugary cereal was at child-eye-level, while the healthier stuff was at adult-eye-level. I didn't sue, I didn't say there should be a law against that, I didn't even complain to the store; I thought "what a great marketing tactic!" and said to my daughter, "All the cereal down here is very sugary. They put those down here so kids will see them. Let's read these boxes up here and find something a little healthier." Then I put back the cereal I didn't want my child purchasing, and helped her pick out something else. The next time we went to the cereal isle, she at first started to go for the sugary cereal, but then said "Oh yeah, we have to look higher and read the boxes!"

If I had not been paying attention and had not taught my daughter to ask before doing so, she could have grabbed some of the cereal I didn't want and put it in the cart. If I had left her to just pick out the cereal herself, she would have picked that first sugary cereal. But I parented. First, I taught her to ask before purchasing something (and I don't leave my credit card info saved in situations where my kids - or myself, because I've done that before, due to not reading fully - could accidentally purchase something). I paid attention to what she was doing, and was involved. I said no, and I taught her why, so that she can make good purchasing decisions in the future; that will help her when she's shopping for herself one day.

There's nothing wrong with advertising to children. Parents just need to parent.

Joe McGinn
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I agree with your post but it's a poor analogy. With the Facebook games deliberately designed to be addictive by exploiting known weaknesses in human psychology (loss aversion for one), and the "first one is free" pitch, the analogy to a drug pusher is more apt.

No good parent would allow their kids to interact with a drug pusher - so I guess that doesn't need to be illegal either.

Amanda Lee Matthews
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Sugary cereal is designed to be addictive, and has colorful boxes that attract children. It's also common to give out free samples, both in stores and through the mail or with newspapers.

I actually think drugs should be legal, but that's a separate argument. Drugs are illegal because of the crime associated with them, not in an effort to keep them out of the hands of children. But THAT'S not a valid analogy because they are illegal for everyone; vs games, which have a legitimate use - adults that want to pay, and children with their parents' permission. Think about alcohol; it's legal for adults to buy, and legal for a parent to choose to give it to their child in most states, it's only illegal for someone under 18 to buy it. If the child has access to alcohol (it is in their house, in their friend's house, etc.) and their parents don't want the child having any, it is up to the parent to prevent that. If a child has access to facebook games and their parents don't want them paying for them, it is up to the parents to prevent that.

Joe McGinn
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That seems a weak argument Amanda ... it basically says "keep your kids away from computers" ... it is not practical. Furthermore, the "it requires a credit card" is specifically an Americanism, and just not true for most of the world's population. In Russia, in China, in Korea, you can buy game cards at any corner store with your pocket money.

I'm not saying parents have no responsibility. But there seems to be this kneejerk reaction against any criticism of the game industry. No one is addicted to sugary cereals, not in the medical sense, defined the way alchoholism is: addition that causes severe harm to monetary, working, social and other responsibilities, but game addiction is very real.

Terry Reine
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This is far more complex than just marketing toward children or not. There are two issues really.

1. to comply with California child protection laws, and the laws of many other states ,anyone who registers on Facebook between the ages of 13 and 18 should not be allowed to purchase credits on line. This is to make sure that parents are involved with the decision. This does not mean that people don't lie about there age, I am sure that happens when parents aren't monitoring their children, but when a parent is making a true attempt to monitor their children online and makes sure they register correctly. The should be able to rely on Facebook to hold up their end of the bargain and limit the access to what is acceptable to child.
2. Knowing that children are not able to purchase credits on line, the games themselves that are designed for that age group should not encourage the online purchase of in game credits to advance the game. The companies know the target age for their games and should set up advancement accordingly. That's not to say that kids won't be interested in games beyond their age, but in the apple case the most prominent example was Smurfs Village. Now how many people over the age of 18 are really going to play this game?
tied to this issues is the credit access. I do not know how Facebook credit card access works as I have never bought a game there, but Until recently the issue with Apple was that your credit card information was retained and remained approved without a password for 15 minutes after the last purchase. So what occurred. Was a child would show a game to their parent and ask for it. The parents would review the game info and cost and buy it then hand it back to the child. The child would then shortly after starting the game be encouraged to by credits to advance in the game. With no further approval required from the parent they could by as many as they want, and interestingly the games encouraged them to by quantities form $20 - $100 or more. Much more than I would usually spend on any game.
Apple has since corrected this issue.

Adam Miller
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You know, counter-intuitively I would say that it's LESS an issue when an addictive "vice" is targeted at kids than adults. There's no one to stop an adult from buying cigarettes or gambling. It's relatively easy to keep bad things out of the hands of kids, and in my opinion, less worth regulating what is targeted at children and how.

Sure the Smurfs is essentially a casino targeting children, but parents can use free software to regulate Internet time and block websites. And I mean, if I'd stolen my parents' credit card info for anything would I have been in for it.

Kevin Reilly
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Let's try this argument on for size: Pornography is widely available on the Internet. Let's ban the Internet.

Parents do have a choice in regulating their children's access to the internet and online entertainment products. Rather then give them a credit card, they could purchase points or credits from a reputable retailer such as Target that limits the amount of money that child can use in-game. Restricting common place business practices b/c some parents opt to not monitor their children's activities with the parent's financial information seems backwards and akin to banning the internet to prevent children from having access to pornography. It would be great if the judge simply looks at the complaint and tells the parents to grow up.

Ryan Marshall
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Lots of things were common place before the government stepped in to stop it. What about child labor laws? I mean, you could always just stop your child from taking that job if you don't want him or her to participate, but because it was a legal practice it was hard to end.

Or getting away from kids, what about overtime laws? What about minimum wage? Your boss says you have to work 12 hours per day at $5 per hour or else you'll be fired, and you could just choose to not participate but then you wouldn't have a job at all. In a bad economy, there will always be someone who is willing to put up with more bad stuff than you are, and then you end up with.... a bad situation.

Just because something is legal doesn't mean it should remain so, or that an action is somehow okay just because it doesn't break any pre-existing laws. Should game designers be allowed to target children by making it too easy to make an impulsive purchase? It's up in the air for now. I've seen an article on optimizing an online store to make it easier for drunk people to navigate; I'm fairly certain that's not technically illegal, either.

Ian Uniacke
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Comparing smurfs village to porn is a ridiculous comparison. Porn companies are much more honest.

Kevin Reilly
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@ Ryan: You realize that children over age 14 hold jobs and buy products without parental supervision. The question here is whether companies can offer a product for "free" and then sell additional perks to children to improve the experience of the game. It should be noted that plaintiffs are not stating the child in question spent their own money frivolously, but rather they spent the parent's money frivolously. Making F2P games like this illegal outright would likely fail on 1st Amendment grounds, so the claimant seeks damages relying on a theory of "false advertising" that would punish a commonly used business practice. IMO this is a shakedown and not a serious attempt to protect children because it doesn't take a law suit for a parent to take control of their own finances.

@ Ian: the comparison was intended to be absurd to make a point. I don't think F2P games are comparable to porn, but the reaction to smurf villages seems to mirror earlier uproar over the ease children have in accessing inappropriate material. Obviously we are all wondering "if someone is thinking about the children"?

Matthew Molloy
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Have a game card which parents can put money on to for their kids. It would have to exclude the ability for kids to just one-click send more money to it of course and be protected so only the parents can do it. Then the parents aren't handing over credit info to be stored for fast buy store features. You know like a bit of Facebook/app store pocket money. Run out of money, too bad.

The kid uses that card as opposed to his parents credit card and everyone is happy....apart from Facebook, Apple and the companies who create these predatory games and earn money from these 1-click-buy style features. There could possibly be an app store card of the same nature as well. I guess it could work - especially if the card was 'set up' by the parents so that the child's correct age and everything was confirmed and then they couldn't go off and buy GTA for the iPad or something :)

Amanda Lee Matthews
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We already have such a thing. Go to any drug store and buy a prepaid credit card. Though you'll still have to parent to ensure the kid doesn't buy GTA, if you don't want them buying that.

Ian Uniacke
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Well that wouldn't be so bad if Facebook/Apple etc went out of there way to make sure all parents understood the options. As it is I would say that most parents have no idea what they are getting into or what other options are out there. That is ABSOLUTELY the responsibility of the company providing the service. Any contract is only valid in so far as the consumer is made fully aware of the details of the contract. So either way it's at worst illegal, at the very best dodgy and unethical practice.

Amanda Lee Matthews
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The company has a responsibility to make things clear in the contract, they can not stop (and have no responsibility toward) people signing it without reading it, or without understanding. Companies don't have the time nor the ability to educate every parent out there; it's the responsibility of parents to educate themselves, and then their children, and to not allow their child to take part if they do not want to do this. There's nothing unethical about expecting parents to parent.

Joe McGinn
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"We already have such a thing. Go to any drug store and buy a prepaid credit card."

That weakens your argument Amanda. Or are you saying that good parenting is to watch your children like a hawk 24/7?

Cody Scott
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As much as I dislike social games, Its the parents fault if they let their credit cards out of their sight.

Joe McGinn
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And what if the kid uses his pocket money and buys a pay-as-you-go card at the drug store? And uses the computer at school? Is that the parents fault?

Geoff Yates
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Let me preface by saying I have no understanding of the law that is being disputed. Nor am I a lawyer.

What I will say in a "virtual" world the ability to distinguish the identity of the individual 100% of the time even with two factor authentication is still impossible. There has to be reasonable onus on the end user to protect their identity.

Do we need people to be better parents? Yes. Personally I have 21 and 18 year old and I can say no one gave me a parenting handbook and its the toughest job in the world. Think about it the most important job in the world and nobody gets trained for it. Help parents be better educated in virtual worlds. Their life experiences probably didn't encounter this during their adolescence.

Do we want to see creditable capabilities built in the virtual sales space to prevent scenarios like this happening? Yes. Some countries gambling laws actually require pre-purchase of credit for people addicted to gambling. Mayhap "app olohics" need to be identified and subject to similar responsibilities. This can be minors. Your Facebook account will gets hit with a credit purchase limit and only through prepaid process. If credit cards are involved than an SMS should be sent to the credit card holders mobile with a part of the authentication process. Yes, the minor can steal the parents phone and delete the SMS messages etc etc. Diablo III is going to open up a new can of worms even though Blizzard is implementing that Diablo III players have authenticators.

Are laws complex? Yes. Will this change because of the case? No. I play WOW and i tried to read through the EULA one day and I gave up (its wordy and lengthy). And I think that explains why laws are complex when dealing with human behaviour.

Do gaming companies exploit online social weaknesses? Yes I believe so. Personally I'd like to see credit limits on any gaming software associated with an organisation. You can only buy $200 of in app purchases before you go to pre paid. Needs to be a limit because people aren't strong enough sometimes to resist and there should be more counselling for addictive behaviour. Chinese have implemented fairly draconian measures to stop their youth from gaming 24 hours a day.

Can you stop this from ever happening? No, because the human mind will always find a way around the problem.

Yossi Tarablus
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Personally and as a parent, I think this is a classic disciplinary problem between the child and the parents. What is the difference between a 13 year old buying VC or filling offers with their parent's credit card and a 9 year old "forcing" his parents to go to McDonalds and buy him a happy meal only for the prize? If the parent is a pushover and doesn't set boundaries it's not FB's problem or the game developers.
Full disclosure I work for Matomy Money. Part of Matomy Media group.

Bruno Patatas
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When I was a kid, once I used groceries money to buy a game. Suffered the consequences and never did it again lol
I feel sorry for anyone on this thread blaming Facebook or Apple for this type of cases.
This is a result of lack of parenting supervision, period. Everyone who disagrees, then I'm sorry but you are what is wrong with the world. A lot of parents nowadays like to blame school, games, facebook, etc, for everything. Like if the only work a father/mother has is to put a child in this world. The education and behavior of a child starts at home, with the parents. It's them who need to create boundaries regarding what their kid can do or not do.

As a father of two, I feel sorry for anyone who needs to rely on companies that are in the world to generate profit to provide education for their kids.

Daniel DuBois
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I just found out that my 8 year old has spent over $500 on Facebook credit over the last six weeks. He does NOT have our credit card info. He did not go in our wallet. He just mindlessly clicked buttons without our permission. But the Facebook software has my Paypal information linked to my account, and there are no checks and bounds to make sure the real owner of the account is making the purchases.

By comparison, In the Apple App store, you have to enter your apple ID password in invoke a purchase, even if you are currently logged in. Also, if you order digital goods off of most every site I can think of, Amazon, Google/Android app store, Apple, etc., you get a confirmation email for your records. Facebook doesn't send anything like that. I could have nipped this problem in the bud immediately had I known it was going on.

It's as if Facebook was willfully complicit in letting unauthorized purchases occur. I've gone out and checked out other gaming sites that have credit systems (ninjakiwii, mochigames) and they are much more responsible in how they manage this issue, and give the parent more protections against kids making unauthorized purchases willy-nilly. (And when I say more, I mean ANY, because Facebook has NONE.)

Yes, we 1) let him play backward monsters on our account, and we 2) don't sit and watch every minute that he plays. So in that sense we as parents have some responsibility, but I think the blame the parent knee jerk reaction is unwarranted in my case. I don't think the first is shocking nor unreasonable (particularly since he's not allowed to have his own FB account until he's 13), and I don't think the second is realistic or feasible even with perfect parenting.


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