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Facebook Targeted Underage 'Whales' In Casino-Like Scam

Social Media Site Broke The Law With 'Friendly Fraud', Lawsuit Alleges

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A class-action lawsuit has revealed allegations that Facebook engaged in “friendly fraud,” duping children and their parents with in-game purchases on a number of mobile games.

According to a report by Reveal News, Facebook internal memos not only encouraged the profit-maximizing strategy, but even referred to some of the children as “whales” for spending hundreds, if not thousands of dollars on game upgrades. A 15-year-old, for example, managed to dump $6,500 into games during a two-week stretch.

In the gambling industry, “whales” are high rollers who lose big and lose consistently, which is important for the casino’s bottomline.

The report goes on to say that Facebook knew that many of these children didn’t know they were making purchases, but continued to offer the products anyway, even after developers came up with a fix.

The hidden game purchases have seen chargebacks at a rate of nine percent, which is more than four times higher than the Federal Trade Commission’s two percent threshold for “deceptive” business practices.

Games included in the report include Angry Birds, Wild Ones, Barn Buddy, Ninja Saga, Petville, and others.