Mark Pincus is an entrepreneur and a leader in the online gaming industry. In 2003, he founded Tribe.net, one of the first social networks. He created Zynga in 2007 giving internet users the ability to play games against each other. The company has become the largest developer of social games on the web. Their games range from casino games to role playing games.

However, if you use social media web sites such as Facebook, you may be more familiar with Zynga by their applications and games including Mafia Wars, Farmville, YoVille and Vampire Lives. Read on if you've always wondered what exactly these games are, why invitations to join are flooding your mailbox and who exactly is profiting from them.

Zynga

Pincus' company Zynga draws more than 100 million visitors a month. Analysts estimate its annual revenue between $100 million to $250 million. Between $33 million and $84 million may come from the special promotions now criticized.

In a recent conference to application developers, Pincus explained exactly how he got so profitable. "From the beginning, the profitability and viability of popular Facebook social networking games Mafia Wars and Farmville were predicated on the backs of scams." He further boasted, "I did every horrible thing in the book just to get revenues."1

These Games - The Scam

Announcements and invitations from games and applications such as Mafia Wars, Farmville, YoVille and Vampires Live clutter my Facebook page for some time. In these games, players compete against each other to complete missions and move up a level. Each level gives you a harder mission. After a certain number of games, your credit is used up. You can then either wait for more play time, or you can purchase more time.

Another option is to accept various offers, most of them with pages of questionaires. However, this may result in accidently falling prey to a variety of scams. Some also install malware and adware impossible to remove. Some even secretly subscribe you to monthly recurring charges. Even worse, not only have you fallen prey to this scam, you then send all of your online friends invitations for the same bait, scamming them too. They fall for the same "offers" and then their friends are attacked as well.

While these games are obviously annoying and inconvenient, the more important question is whether they're legal.

The Lawsuit

Many have fallen prey to what they claim to be misleading ads in these social games. As a result, a lawsuit has been filed against Facebook and Zynga after 41-year old Rebecca Swift was lured into accepting two "special offers" from advertisers to gain extra game credits for the virtual game YoVille.

Afterwards, more than $200 was illegally charged to Swift's credit card over several months. Swift's lawyers claim that thousands of others suffered from similar abuses. They're seeking class action status.

The Scams

The suit claims that some offers in the games prompted a series of unauthorized charges or triggered enrollments in programs without the user's knowledge. More than 100,000 people fell victim to these offers, losing more than $5 million.

Examples of the scams used are:

  • Offering an IQ test that requires the players to give out their cell phone number for the results. Afterwards, they're billed for a text messaging service

  • An offer asking consumers to sign up for a risk-free trial subscription to a green tea supplement. However, that trial was difficult to cancel and the players ended up with a monthly subscription delivering tea and pills from China

Facebook temporarily suspended one of Zynga's new games, FishVille, while it investigated whether ads in the game violated the network's advertising guidelines. Furthermore, coverage of Pincus' boasting of playing dirty surely won't help him or his company with the charges against them.

What to Do If You've Been Scammed

For now, it's best for you to be careful when looking at the special offers linked to social gaming on Facebook, MySpace and other sites. The Federal Trade Commission is responsible for regulating and overseeing most e-commerce. However, no group regulates the social gaming industry. As a result, these companies have been free to use such scams.

If you think that you've been a victim of unauthorized charges from games, programs or advertisements on Facebook, MySpace or other social media game applications or scams, contact a lawyer or the law firm that is currently representing Rebecca Swift in the class action. You can fill out a free case evaluation here.

Sources
1 Ben Popkin, Mafia Wars CEO Brags About Scamming Users From Day One, The Consumerist, Nov. 9, 2009, available at http://consumerist.com/2009/11/mafia-wars-ceo-brags-about-scamming-users-from-day-one.html, accessed Jan. 13, 2010.

Questions for Your Attorney

  • I play Mafia Wars regularly, and my credit card was just billed without my authorization. What can I do?
  • I placed a "stop payment" on my credit card as soon as I found out about the scam. The company charged my card, though. Is there any way I can get my money back from the scammers or from the bank?
  • Tagged as: Internet Law, online games, internet law lawyer