Senators Markey, Blumenthal Push Zuckerberg to End "Friendly Fraud" on Facebook

Sens Ed Markey (D-MA) and Richard Blumenthal (D-CT) sent a letter to Facebook urging the company to institute policy changes in light of evidence that third party game developers manipulated children into spending their parents’ money. Previous reporting by the Center for Investigative Reporting demonstrated that Facebook personnel had direct knowledge that children were spending large sums of their parents’ money on in-app purchases without parental knowledge or permission. New evidence now reveals that Facebook has still not instituted key policy changes to address this issue.

The Sens initially wrote Zuckerberg about the issue in Jan. In their latest letter, the Sens express concern about Facebook’s policies on what it considers an acceptable “chargeback rate,” the percentage of charges from in-app purchases that a credit card company disputes at the request of Facebook users. Recent reporting suggests that Facebook’s payment policies continue to allow an individual developer to maintain a chargeback rate of up to five percent before potentially penalizing it, well above the standard recommended by the Federal Trade Commission. The Senators are urging Facebook to reduce from five to one percent (or lower) its acceptable chargeback rate for third-party developers.