Facebook will face a nationwide class action lawsuit, as ruled by a federal judge on Tuesday. At times, it happens that children spend money online without the permission of their parents, and therefore, the lawsuit seeks to provide a refund of money to those parents.
Facebook (FB) to grant refunds on case-by-case basis
The way Facebook Inc (NASDAQ:FB) handles online transactions made by minors is not acceptable by many, and therefore, a class of plaintiffs wants the law to be changed. The plaintiffs, expected to be in the hundreds of thousands, will press their claim over the issue, as ruled by U.S. District Judge Beth Labson Freeman in San Jose, Calif., according to Reuters.
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“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,” she wrote.
No refunds can be pursued by the plaintiffs as a group under the U.S. Supreme Court precedent, but the plaintiffs should seek individual refunds. Facebook said it would be issuing refunds on a case-by-case basis, and users below 18 can use Facebook Payments only with their parents concern. The trial date is set for Oct 19.
What is the lawsuit about?
The lawsuit was filed in 2012, and it claimed Facebook Inc (NASDAQ:FB) breached the law by enabling kids to use their parents’ credit and debit cards in exchange for the virtual currency Facebook Credits. The lawsuit further accused the social network of violating California law by turning down any refunds claim under its “all sales are final” policy when parents complained.
Two children and their parents brought the lawsuit. One child was allowed by his mother to spend $20 on her credit card toward the game Ninja Saga. However, that child later got confused, and bought items thinking he was using the virtual in-game currency but was charged several hundred dollars later. The other child used his parents’ debit card with permission and spent $1,059.
Facebook Inc (NASDAQ:FB) is not the only one facing such charges. Tech firms such as Apple, Amazon and Google have also been accused of charging parents for unauthorized in-app purchases by kids.