Children are not the best money savers. If they see something they want, they pursue it with a relentless obsession that would be considered unhealthy in an adult. Fortunately, most children lack the means to act on their buying impulses, but there is one area where this is not necessarily the case: the internet.

Facebook Inc is learning this lesson the hard way thanks to a class-action lawsuit leveled at the company for refusing to offer refunds to purchases made by children for its now-defunct virtual currency, Facebook Credits, due to its “all sales are final policy.”

According to the suit, Facebook’s refusal to refund purchases made by minors without permission violates California law. U.S. District Judge Beth Labson Freeman ruled on Tuesday that the plaintiffs can proceed with the lawsuit.

“Though some minors undoubtedly may wish to continue making purchases through credit or debit cards they do not have permission to use, such a desire cannot prevent the named plaintiffs from bringing suit to demand that Facebook’s policies comply with the law,” Judge Freeman wrote.

Microtransactions for micro-people

The case began as the result of two children who bought a large quantity of Facebook Credits using their parents’ credit or debit cards. One child alone spent a total of $1,059 on Facebook Credits after he borrow his parents’ debit card without permission. The other child involved in the lawsuit spent hundreds of dollars on credits for a game called Ninja Saga, and he claims that he did not realize that his purchases were being made with real money.

Facebook’s no return policy aside, this situation presents a very real problem faced by the growing number of freemium games that rely on in-game purchases by a very young audience. If a multi-billion dollar corporation like Facebook could be sued over purchases made by minors, what hope do small mobile game developers have to protect themselves?

A fair refund policy would certainly help, as would the plausible deniability of requiring a parent to set up the account. J.R. Parker, a lawyer for the plaintiffs in the case against Facebook, argues that unlike most companies, Facebook cannot claim that it does not know the age of its users.

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