Pokémon Go Maker Niantic Deprives Minors of Right to Refunds for In-Game Buys, Class Action Says

Pokémon Go maker Niantic has essentially deprived minors of their right to obtain refunds for in-game purchases made with real-world money, a proposed class action alleges. 

The 25-page complaint more specifically claims Niantic has misled or misrepresented to under-18 Pokémon Go players—and, by way of extension, their parents—that they have the legal right to “disaffirm” the contract they entered into when they agreed to the company’s terms of use, which explicitly state that all sales made within the popular mobile game are final and that no exchanges or refunds will be permitted.

The case, filed July 30 in California federal court, says Niantic has failed to provide minors with enough information so as to make prudent and reasonable choices as far as spending real money within Pokémon Go—a game with reportedly more than 147 million monthly active users—and induced the players into spending as much real money as possible, albeit via “PokeCoins,” through the game’s inherent makeup.

As the lawsuit describes it, the overall ecosystem of the free-to-play game—including, but not limited to, the use of PokeCoins as in-game currency, the time-sensitive nature of many in-app purchases and events, the advanced accounting needed to determine how much a PokeCoin is worth in actual dollars and the ease with which real money can be spent in the game by minors—creates the opportunity for younger players to run up their parents’ or guardians’ credit cards without fully understanding the consequences of their behavior. Put simply, Pokémon Go might be free to play, but to play it meaningfully—to buy “pokéballs,” participate in some battles, and acquire rare Pokémon, eggs and all manner of upgrades—real money must be spent, and doing so repeatedly is made all too easy by Niantic, the case relays.

Despite the financial realities of Pokémon Go as it pertains to minors, who make up a large chunk of the game’s audience, Niantic “operates a non-refund policy that misleads, misrepresents, and does not acknowledge a minor’s right to get a refund,” the lawsuit alleges.

“Prior to making the in-App purchases, minors are generally not aware of the nonrefundable policy for in-app purchases,” the suit says. “Plaintiff and minor Class members are not buyers who would look for refund policy options at the time of purchase.”

Worse for some Pokémon Go players, according to the filing, is that real money spent via PokeCoins on in-game purchases does not guarantee that a player, such as the plaintiff, will receive the bang for their buck that they bargained for:

Despite spending the equivalent of at least $252.66 in real-world currency on Defendant’s loot boxes and in-game items while under the age of 18, Plaintiff almost never received any items that had real value. Plaintiff often failed to obtain the specific Pokémon creatures he was seeking despite spending money.

Had Plaintiff known the extremely low chances of catching or receiving any of the rare Pokémon featured and advertised by Defendant, he would not have made any in-game purchases.”

The lawsuit alleges that neither the plaintiff nor his guardians saw, read or agreed to Niantic’s terms of use prior to playing Pokémon Go. As a result, the plaintiff made several in-game purchases that were apparently non-refundable, according to the suit.

“Had Defendant provided proper parental control and age verification features, Plaintiff would not have been able to make any of the purchases he did,” the filing says. “And had Defendant permitted Plaintiff to disaffirm his contracted purchases, he would have done so.”

Per the lawsuit, although it facially appears that Niantic requires that its terms of use be accepted by legal adults 18 years old or older, the company “targets minors.” As such, an agreement that explicitly requires an adult’s acceptance “cannot apply to a minor, and minors have a legal right to disaffirm contracts into which they enter,” the case contends.

The proposed class action against Niantic marks the latest case aimed at the makers of “freemium” games whose revenues rely primarily on in-app purchases of loot boxes, character accessories and other items. Upon the release of Pokémon Go in the summer of 2016, Niantic was hit with a now-settled class action alleging that the open-world, GPS-based game was causing some players to stray onto private property.

Who does the lawsuit cover?

The lawsuit looks to cover anyone in the United States who, at any time between July 6, 2016 and the present, had a Pokémon account that they used to play the game on any device and in any mode and, while under the age of 18, exchanged in-game virtual currency for any in-game benefit or made a purchase of virtual currency or other in-game benefit.

My kid plays Pokémon Go. Can I join?

There’s generally nothing you need to do to join or be considered a part of a class action lawsuit. Those covered by the lawsuit, called “class members,” typically only need to act if and when the case settles and the opportunity arises to submit a claim for whatever compensation the court deems appropriate. These types of cases almost always take time to work through the legal process, usually toward a settlement, dismissal or arbitration out of court. This means it might be a while before the time comes to take action.

What’s important in the meantime is to stay informed. Sign up for ClassAction.org’s free weekly newsletter, containing news on case filings and settlement updates, here.

The complaint can be found below.