When told about Facebook’s 5 percent chargeback policy, Steyer called for immediate action from lawmakers and regulators.įacebook has a long history with high chargeback rates. In February, a consortium of nonprofits led by Common Sense Media filed a complaint with the Federal Trade Commission against Facebook based on details revealed in the unsealed court records. Facebook is aware of the damage this is doing to children and families,” said Jim Steyer, founder of the child advocacy group Common Sense Media. “Once again, Facebook can’t be trusted to do the right thing. It penalizes them only by withholding money under certain circumstances, according to its payment terms. When a game does surpass a 5 percent chargeback rate, Facebook does not necessarily take any action against the developer. “As our Payments Terms state, we follow up with and may enforce against individual game developers if their chargeback rates get too high.” We keep records of these transactions, and Facebook’s overall chargeback rate for in-app payment transactions is well below the 1% guidelines set by payment card networks,” Facebook said in a statement. “Chargebacks create a bad experience for people on Facebook and for us. That is more than double what the government says should be ringing alarm bells for potential business fraud.įacebook acknowledged that this 5 percent chargeback rate is the only guidance it gives developers about acceptable limits, but said that overall, it maintains a low rate and handles problematic game developers on a case-by-case basis. įacebook’s payment policies show the company still permits game developers to run chargeback rates of 5 percent before it will penalize them. A chargeback rate of 1 percent is considered high, and anything over 2 percent is a “red flag” of deceptive behavior, according to the Federal Trade Commission. High chargeback rates are a warning sign that a business might be defrauding its customers because so many people are seeking help to get refunds, according to the U.S. The company still allows game developers to run incredibly high chargeback rates – a little-known industry term that describes when people are forced to ask their credit card company for help getting refunds. senators, advocacy groups and its own users, Facebook has not changed a key policy that got it into trouble. Now, a Reveal review has found that despite widespread criticism from U.S. But the records did not answer a big question: Has Facebook changed its policy, or are users still bamboozled into spending money while playing its games? Those details surfaced in January after a California court unsealed more than 150 pages of Facebook records. In January, Reveal from The Center for Investigative Reporting showed how the company knowingly made millions of dollars between 20 from parents who didn’t realize their kids were being charged to play games such as Angry Birds, Ninja Saga and Barn Buddy. Want more? Subscribe to our newsletter to get our investigations delivered straight to your inbox.įacebook continues to put users at risk of being duped into spending money on games.
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