Facebook sails towards sh*t storm of child exploitation and ‘friendly fraud’

It hasn’t even finished dealing with the aftermath of the Cambridge Analytica scandal, but fresh documents unveiled by a US Judge suggest Facebook knowingly duped minors into spending hundreds of dollars.

After legal action from Reveal, District Judge for the Northern District of California Beth Freeman unsealed 135 pages of internal memos and conversations (dated between 2010 and 2014), detailing in-depth strategies to maximise revenues from what the firm describes as Friendly Fraud minors (FF minors). These individuals are those under the age of 18 but have access to their parent’s credit cards.

Before we delve too deeply into the criticism of Facebook, it should be noted there were objections raised internally. Tara Stewart, one of the social media firm’s software engineers, raised concerns on several occasions, even suggested ways in which the risk of securing revenues from FF-minors could be reduced. These ideas were kicked back, with other employees attempting to protect revenues.

An FF-minor is an individual who is under the age of 18 but has access to a parent’s credit card. While this might not be the most scandalous revelation, the documents suggest Facebook knowingly took advantage of this scenario, created transactions which did not suggest real money was being spent and even labelled some as ‘whales’, a term taken from casinos who target gamblers who are likely to lose the most cash. The suggestion here is Facebook identified minors who fit the bill and exploited the situation to maximise revenues.

At a time where the company’s culture and moral standing is being questioned, the documents paint an even more nefarious picture. Not only to you have a company which treats users as commodities and pays little attention to data privacy principles, this latest revelation suggests the company is actively trying to scam minors.

Summing up the issues is certainly a tricky one, but we will try our best.

  • The company realised there were minors with access to parent’s credit cards and exploited this scenario for greatest revenue gains
  • Users were not always notified when a purchase was made, or prompted prior to completing the purchase
  • Facebook stored credit card information, to link to for future payments, without appropriately informing the user
  • The reality of spending money was hidden from the minors, often employing strategies which do not link in-game upgrades to real payments
  • Strategies to reduce the number of payments were drawn up, but then ignored as it would have too much of a detrimental impact on the bottom line

One of the most damning documents which has been unveiled is an explanation on what Friendly Fraud actually is and why employees should not attempt to curb it.

Parents who discovered the payments, we suspect through eye-watering credit card bills, were not initially able to report the problem to Facebook as there was no relevant feedback form or procedure. In most cases, said parents had to turn to the Better Business Bureau, the last option before a full-blown lawsuit. However, internal memos also suggest Facebook did not even read the content of these complaints before processing. This was not deemed an ‘efficient’ use of analyst’s time.

For a full explanation of the unveiled documents, we have to credit Reveal for perseverance (see the full article here), though this could be another disaster for the social media site. Privacy issues are one thing to deal with, but tricking children into spending money, sometimes hundreds if not thousands of dollars, is likely to kick a tsunami of hate.

Zuckerberg and his cronies might not have to worry about fighting the Cambridge Analytica scandal anymore, as it is probably about to be replaced by a completely different beast.