Facebook Faces Lawsuit Over Children's Online Purchases

Facebook forced to face class action lawsuit over children’s online purchases

Facebook must change how it handles online transactions made by minors. That’s the message a group of plaintiffs estimated in the hundreds of thousands have for the social network, and now they can push forward with their nationwide class-action lawsuit against the social network, reports Reuters.

U.S. District Judge Beth Labson Freeman in San Jose, California gave the plaintiffs the thumbs-up earlier this week to push forward with their lawsuit, which asks for Facebook to provide refunds for those whose children spent their money without their permission. J.R. Parker, a lawyer for the plaintiffs, was pleased with the decision.

Facebook believes the lawsuit lacks any merit, and said the plaintiffs’ claims were very disparate.

“We’re very pleased with the decision,” Parker told the outlet. “The difference between Facebook and other businesses is that the company is on actual notice of a user’s age, but treats children the same as adult users when it comes to taking their money.”

According to the judge, while the people can’t pursue refunds as a group — since their situations would vary on a case-by-case basis — they can seek individual refunds. The lawsuit, originally brought forth in April of 2012, said Facebook allowed children to use their parents’ credit and debit cards to purchase Facebook Credit, the social network’s now-defunct virtual currency. The lawsuit also said Facebook violated California law by not allowing refunds, thanks to its “all sales are final” policy.

The lawsuit was brought forth by two children and their parents. One child was allowed to spend $20 on Ninja Saga using his mother’s credit card, but was later charged several hundred dollars for purchases with “virtual, in-game currency.” The other child used his parents’ debit card without permission, spending $1,059.

Facebook believes the lawsuit lacks any merit, and said the plaintiffs’ claims were very disparate. With the lawsuit now moving forward, Facebook said it will defend itself vigorously.

Judge Freeman said California law protects parents and their children in instances where children “occasionally use their lack of judgment” when purchasing things they shouldn’t have bought in the first place.

“Though some minors undoubtedly may wish to continue making purchases through credit or debit cards they do not have permission to use, such a desire cannot prevent the named plaintiffs from bringing suit to demand that Facebook’s policies comply with the law,” said the judge.

Unfortunately for Facebook, this isn’t the first time a company has come under scrutiny for this. Apple found itself in a very similar situation at the start of 2014, and the company eventually had toreimburse customers to the tune of $32.5 million. Google also agreed to issue refunds to similarly affected customers to the tune of $19 million, while also making changes to the Play Store to make it more difficult for children to make in-app purchases without permission. Amazon, meanwhile, was sued by the FTC, though there is still no resolution to the case.

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