Lawsuit says ads in social games are scamming players
National News
Gamers are crying foul play over what they claim are misleading ads on social games.
A class-action lawsuit last month highlights what thousands of consumers say are bogus offers tied to social games available on Facebook and other social networks. The 16-page lawsuit, filed in U.S. District Court in nearby Sacramento, details how Rebecca Swift, a 41-year-old self-employed resident of Santa Cruz, Calif., was lured into accepting two "special offers" from advertisers to gain extra game credits for YoVille, a popular virtual-world game developed by Zynga.
More than $200 was illegally charged to Swift's credit card over several months, the lawsuit alleges. It seeks compensation from Facebook and Zynga for Swift and thousands of others, says attorney John Parker, who represents the plaintiff.
Zynga had no comment on the lawsuit.
It claims 90% of its revenue comes from user purchases of virtual goods. Zynga says 1 million users purchase goods each month.
Facebook says the ads came from third parties, but it takes the issue seriously. It called the lawsuit frivolous and without merit.
The lawsuit illustrates the kerfuffle over misleading social-gaming ads that have frustrated consumers and scared away legitimate advertisers, who do not want to be lumped with scamsters, says Alex Rampell, CEO of TrialPay, an online payment and promotions service.
Social games are among the hottest things going online. Millions have flocked to Facebook, MySpace and elsewhere to play free games that test their wits and skills against friends.
But to gain entry to new levels of the game, an undetermined number of players unknowingly are signing up for special offers. Some of those offers, such as an IQ test and green tea offer that Swift agreed to, automatically charge the game player.
The stakes are particularly high for Zynga, which draws more than 100 million visitors a month and is eyeing a possible initial public stock offering next year. Industry estimates peg its annual revenue at $100 million to $250 million, of which $33 million to $84 million may come from these "special offers," the suit claims.
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Workers’ Compensation Subrogation of Administrative Fees and Costs
When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.