Facebook Faces Lawsuit Over Minors' Use of Credit Cards

If minors secretly use their parents’ credit or debit cards to make purchases, can the whole thing be cancelled on the basis that it was illegal to begin with? Or, more specifically, are companies obliged to let minors out of contracts if they find out the parents never consented to the purchases?

Minors have used their parents’ cards and now the parents want their money back.

These are the questions being asked in a California court right now as Facebook fights back against a class action lawsuit. The suit was filed by both parents and minors after children were able to use their parents’ cards to make purchases in apps linked to Facebook, with some spending hundreds of dollars after failing to realize that digital currency was linked to real world charges. The suit is seeking to have the payments negated using a clause in the California Family Code that voids contracts and payments made by minors without proper permission.

The suit stems from the purchase of Facebook Credit, a digital currency on the social networking site that can be used in games and apps. Minors, it seems, have used their parents’ cards – and now the parents want their money back.

Interestingly, Judge Claudia Wilken has now granted Facebook’s request to dismiss the parents’ claims – but denied a similar request to dismiss the minors’ claims, meaning that the children will now continue as the sole plaintiffs. The decision was made after Facebook argued that parents had failed to show they’d suffered economic harm in ways not already covered by the minors’ claims.

Arguing against the lawsuit, Facebook said that the children are only making their claims because they experienced reprisals – “shame, punishments, allowance reduction and other consequences” – for the purchases they made. The court was having none of it, though, and has already ruled that minors have a legal right to negate Facebook Credit purchases under California law.

“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,” Judge Wilken wrote.

Essentially, while parents can no longer take part in the suit, children who spent money without realizing it, or spent money without the cardholder’s consent, have the court’s blessing to move forward with their claims. Facebook may be annoyed – and managed to get the parents out of the suit, at least – but it looks unlikely they’ll be able to get out of the suit completely. The parent’s second argument points out that California law allows minors to disaffirm any contracts they enter into within a certain time period.

A good warning to all card holders; make sure you know who is using your card, and for what. The ease with which online credits can be bought makes it increasingly likely that minors with access to credit cards will be able to make substantial purchases long before anyone can stop them.