Emails show Facebook knew children spent big money on game apps

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PHOENIX (CBS) After a series of scandals, Facebook is under fire again over newly released documents that show an apparent pattern of exploiting minors for their parents' money. More than a hundred pages of documents, part of a 2012 lawsuit, are being released. They show Facebook was aware children spent large sums of money on game apps without parental consent. The suit alleges the social media giant made it difficult for parents to get their money back.

Glynnis Bohannan let her 12-year-old son use her credit card to play the game "Ninja Saga" on Facebook. But that initial charge of $19.95 mushroomed into nearly $1,000 dollars.

Reporter Carter Evans: What was it like when you opened that bill?
Glynnis Bohannan: It was very shocking.

"I wanted to know what my son was doing because I told him it was only a one time transaction. He's like, 'I'm not using your card,'" Bohannan said

What he didn't realize was that Facebook had stored his mom's credit card and was charging it as he played the game.

Glynnis Bohannan: I said show me what you are doing and so there was a little stack of coins and it would get low and blink at him and he would hit it and it would go 'Brrrring,' and the coins would shoot up again.
Reporter Carter Evans: And that's how it was charging your card?
Glynnis Bohannan: And nothing. No symbol of my Visa card, no symbol $19.95 with the dollar symbol. Nothing. Just like he had told me.

This practice was widespread, according to newly released court documents. It was known at Facebook as "friendly fraud," meaning a minor was using the app on a parent's or grandparent's account. Bohannan filed a lawsuit after finding it impossible to reach Facebook for a refund. The case ultimately grew into a class action brought by her attorney, John Parker.

Reporter Carter Evans: Did they know this was catching up kids in a net here?
John Parker: There's no way they didn't know these transactions were originating from Facebook accounts that were assigned to minors.

Newly-released internal emails filed in court show that in 2012 Facebook analyzed refund requests on another game -- "Angry Birds" -- and found that more than 90 percent were because of friendly fraud. It says that "in nearly all the cases, the parent... didn't think the child would be allowed to buy anything without their password or authorization first."

"I think it was all driven by greed and money," Bohannan said.

One deposition shows Facebook employees were reluctant to reduce this friendy fraud because it would likely also reduce the company's overall revenue. According to court documents, the company calculated that between 2008 and 2014, minors under 18 made purchases on Facebook totaling more than $34 million.

"I felt this could be family's rent or the car payment, or their grocery money and that this was wrong," Bohannan said.

Bohannan's case was settled in 2016. In a statement, Facebook says "...we routinely examine our own practices, and in 2016 agreed to update our terms and provide dedicated resources for refund requests related to purchases made by minors on Facebook."