Facebook is under fire for allegedly facilitating over-spending by minors in free-to-play games on Facebook, and internal documents now show that the company chose not to implement security measures that would have prevented kids from unknowingly pouring their parents’ money into games.
According to Reveal from The Center for Investigative Reporting, court documents containing internal Facebook memos, strategies, and employee emails show that Facebook employees knowingly exploited the spending habits of children playing free-to-play games and, in some cases, refused to refund parents who became aware of their children’s spending.
It’s a troubling affair, but one that game developers should pay close attention to as the conversation about ethical monetization, especially when children are involved, isn’t likely to wind down at any point in the future.
A full overview of the particularly troubling bits of what was released can be found over on Reveal’s website, including links to the released documents and snippets of conversations between Facebook and the developers of the games in question.
Some of those documents label children as “whales,” the term typically used toe describe the biggest spenders in a free-to-play game’s playerbase. In many cases, over-spending by minors was the result of either children not realizing they were spending real money by purchasing in-game goodies and currency, or parents not knowing that their credit card information had been stored in the games that their kids are playing.
According to internal documents, a team of Facebook employees set out to solve the issue and eventually devised a system that would require players to re-enter some credit card information to verify that the spending was intentional and permitted by the credit card owner. The change had the intended effect of lowering refund and credit card charge back requests from disgruntled parents, but it ultimately wasn’t implemented for fear it would impact revenue.
“If we were to build risk models to reduce it, we would most likely block good [total purchase value],” said one Facebook employee in the unsealed documents.
Another anecdote shared by the Reveal News roundup captures a conversation between Angry Birds developer Rovio and Facebook in which the developer noticed that 5 to 10 percent of in-game transactions were being refunded. “This seems quite high to me, but it might just be normal for games on Facebook,” wrote the Rovio employee.
In a resulting study looking to explain the high refund rate, Facebook found that 93 percent of those refunds were due to parents not knowing the game was charging their credit card, largely because parents “didn’t think the child would be allowed to buy anything without their password or authorization first.”