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Facebook Is Facing a Massive Lawsuit Over Online Purchases Made by Kids

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Correction appended: 10:17 p.m. EST on Mar. 16

Facebook was ordered to face a nationwide class-action lawsuit in the U.S. on Tuesday, over its refusal to provide refunds to parents whose children spent money on the website.

A federal judge in San Jose, California ruled that hundreds of thousands of people across the country could legally claim refunds from the social network over its policy on online purchases by minors, Reuters reported.

U.S. District Judge Beth Labson Freeman also said parents could not pursue refunds as a group, because each case would be different, but could do so individually.

The suit was initiated in 2012 by two children and their parents, over purchases of the now discontinued virtual currency Facebook Credits made using the parents’ credit and debit cards. One child said his mother used her credit card to buy him a $20 game called Ninja Saga but was subsequently charged hundreds of dollars for what he thought were virtual currency purchases, while the other child racked up charges of $1,059 after taking his parents’ debit card without permission.

“The difference between Facebook and other businesses is that the company is on actual notice of a user’s age, but treats children the same as adult users when it comes to taking their money,” said J.R. Parker, a lawyer for the plaintiffs.

The lawsuit says Facebook violated state laws by refusing refunds under its “all sales are final” policy, to which the company responded by saying the claims were too disparate. It also said the lawsuit lacks merit, and that it will defend itself vigorously.


Correction: The original version of this story misstated when the lawsuit against Facebook was filed. It was filed in 2012.

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Write to Rishi Iyengar at rishi.iyengar@timeasia.com