Facebook Still Under Fire for Letting Minors Pay
OAKLAND, Calif. (CN) - Two children, but not their parents, can fight Facebook to void purchases they made using those parents' credit cards, a federal judge ruled.
The lawsuit, which has been amended three times over the years, was filed by I.B. and J.W. through their respective mothers, Glynis Bohannon and Julie Wright.
Bohannon had allegedly given her son permission to use her credit card one time on Facebook to purchase "credits" for a game that he played on the social media site, but he made additional purchases in the game without her knowledge. I.B. allegedly was unaware that he was spending real money, according to the complaint.
Julie Wright meanwhile said that son bought more than $1,000 in credits, charged to the debit card she shares with her husband, even though neither parent gave him permission to make any purchases.
U.S. District Judge Claudia Wilken on Friday rejected the social media site's argument that the minors did not identify an injury-in-fact because they purchased the Facebook credits with their parents' money, not with their own money.
She was equally unconvinced by Facebook's argument that the children do not have standing to bring their claims under Article III of the U.S. Constitution.
"As this court explained in its prior order the minor plaintiffs have 'present[ed] an actual controversy over the rights of minors to disaffirm their purchases of Facebook credits,'" Wilken wrote.
Facebook failed to acknowledge or refute Wilken's prior ruling, just as it failed to show that the minors could not plead an injury based on an alleged violation of their statutory right of disaffirmance, Wilken said.
The social networking giant had tried to argue that the children cannot disaffirm their purchases because they continue to use Facebook's services, thus binding them to the Statement of Rights and Responsibilities (SRR) in which users under the age of 18 must acknowledge that they can make payments on Facebook only with the involvement of a parent.
Wilken pointed out, however, that the children never stated in their complaint that they continue to use Facebook and Facebook failed to show otherwise.
Facebook also did not show that the provisions of the SRR in question were actually in effect when the children began purchasing Facebook credits, the court found. The SRR and payment terms that Facebook submitted were downloaded from its website in December 2012, and both of the documents indicate that they were revised in 2012.
Wilken once again dismissed Wright's claim against Facebook under the Electronic Funds Transfer Act (EFTA), finding that Facebook cannot be held liable under two of the Act's provisions because it is not a financial institution.
Additionally, the court refused to let either the parents or the children bring claims under California's Unfair Competition Law. Facebook accurately argued that the minors lack standing to bring claims under the UCL because they did not purchase the credits with their own money.
"Although this argument was not sufficient to establish a lack of standing under Article III, it does suffice to establish a lack of standing under the UCL," Wilken wrote. "Both state and federal courts have recognized that the UCL's standing requirements - which apply to claims brought under all three prongs of the statute - are stricter than those of Article III because the UCL requires the plaintiff to establish economic harm."
The children likewise cannot allege that they suffered economic harm since they did not make the purchases with their own money.
Though the parents suffered economic harm, Wilken said they failed to show specific conduct by Facebook that resulted in the harm. Instead, it was their children who caused them the losses by making the unauthorized purchases by using their credit cards. As such, Wilken dismissed their claim under the UCL.