Facebook is facing a class action lawsuit that could force it to refund hundreds of thousands of parents whose children made “unauthorized” purchases for in-app items on the site.
A California judge has ruled the the suit must progress, despite Facebook’s contention that it lacks merit.
The April 2012 lawsuit said Facebook let children use their parents’ credit and debit cards to buy the virtual currency Facebook Credits, and violated California law by refusing refunds under its “all sales are final” policy when the parents complained.
In opposing class certification, Facebook said the plaintiffs’ claims were too disparate, and an injunction would not address them.
But Freeman said state law protects parents and their children when those children “occasionally use their lack of judgment” and buy things they should not.
As far as in-app purchases are concerned, Facebook Credits have since been retired in favor of Facebook Payments. The terms for the new system state that “if you are under the age of eighteen (18), you may use Facebook Payments only with the involvement of your parent or guardian. Make sure you review these Terms with your parent or guardian so that you both understand all of your rights and responsibilities.”
Though it’s tricky issue – kids making app purchases and parents’ liability – previous cases point to Facebook having a tough time defending its position. The FTC has forced both Apple and Google have been forced to pay millions in refunds for “unlawfully billing parents for children’s unauthorized in-app charges.”
“For millions of American families, smartphones and tablets have become a part of their daily lives,” said FTC Chairwoman Edith Ramirez in September of 2014. “As more Americans embrace mobile technology, it’s vital to remind companies that time-tested consumer protections still apply, including that consumers should not be charged for purchases they did not authorize.”
“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 judge Beth Labson Freeman.