Facebook Faces Class Action After Kids Spend Parents' Money On Facebook Games

Facebook is the latest Silicon Valley company to come under fire for how it handles children making unauthorized purchases on their parents’ devices. Apple and Google were forced to provide millions of dollars in refunds to settle similar complaints with the FTC last year.

Facebook Inc. was ordered Friday to face a class-action lawsuit in California that is trying to force the company to refund purchases made by children unauthorized to put charges on their parents’ credit cards without permission.

The total reward, which is estimated to be “in the hundreds of thousands,” according to Reuters, will move forward as a class action against Facebook. The plaintiffs claim the company needs to change how it handles online purchases made by minors. U.S. District Judge Beth Labson Freeman said that plaintiffs cannot seek refunds under the class action – since they would vary depending on how much was spent – but that they could still seek individual ones.

Facebook claims that its policy of refusing refunds under an "all sales are final” policy was legal, and that the lawsuit is without merit. Freeman has set an Oct. 19 trial date.

California law requires companies to provide refunds or else notify the consumer by “conspicuously” placed notices. Facebook said that the claims were too dissimilar to be grouped into a class action, but Freeman said state law protects parents whose children buy things they should not due to a “lack of judgment.”

The lawsuit began when one family claims that their child, who was allowed to spend $20 on the game “Ninja Saga,” actually spent hundreds of dollars using “virtual, in-game currency.” Another child used his parents' credit card information to spend $1,059.