Senators Call For FTC Action On FB ‘Friendly Fraud’ Complaint

U.S. Senators Edward Markey and Richard Blumenthal have asked the Federal Trade Commission to act on a complaint that Facebook knowingly encouraged children to spend money on the platform, according to a report by Reuters.

A coalition of consumer groups allege that Facebook used deceptive means to encourage children to buy in-game purchases without their parents’ permission.

Facebook actually settled a class-action suit about the allegations in 2016, but the issue was complicated by unsealed court documents requested by the Center for Investigative Reporting.

In the documents, Facebook workers called the ploy “friendly fraud,” and had a name for the children who would rack up charges of thousands of dollars — “whales,” a term used to describe casino high rollers.

“We urge the FTC to review in detail the complaint that was filed today on this issue. It shouldn’t take another settlement for Facebook to meet its ethical obligation to protect kids and families on its platform,” the senators said in a joint statement.

The senators said Facebook CEO Mark Zuckerberg avoided questions about the practice when they sent a letter after the documents were unsealed.

“Facebook’s answers to our reasonable questions were inadequate and do not inspire trust,” they said.

In a statement, Facebook said it worked diligently to prevent fraud and that it had specific departments to aid in requests for refunds when children made purchases.

“We want people to have safe and enjoyable gaming experiences on Facebook, so providing resources to seek refunds for unauthorized purchases made in games is an important part of the platform,” the statement said.

Facebook said it never encouraged the practice of friendly fraud and that it wanted to resolve credit card fees with customers directly in order to avoid getting charged by credit card companies for chargebacks.

The senators want to know why the company didn’t do anything about the complaints before the case went to court.

The FTC is currently investigating Facebook over the Cambridge Analytica scandal, in which data on 87 million users was shared inappropriately.