(Thumbnail image: FarmVille Neighbors)

"What looked like just a harmless waste of time for Eli turned into an insidious scam that racked up more than $50 in cell phone charges. [...] Deceptive Internet ads, like this one, discovered by the Blog TechCrunch, offer FarmVille currency just to fill out an IQ quiz.  To get the results, users are asked to send their cell phone number and enter a code.  And the scam is complete.  A fee, $10 a month or more, starts appearing on their cell phone bill." (CBS News)

The popularity of games on Facebook like FarmVille and Mafia Wars is exploding.  But the media is warning that the makers of these games can use the applications to scam users in a variety of ways.  We’re looking at perspectives from BusinessWeek, The Consumerist, TechCrunch and ZDNET Asia. 

To understand the importance of these possible scams, BusinessWeek looks at just how big actually FarmVille is. 

“Talk about the scale, how many people are playing FarmVille? 

Over 50 million.  So that’s roughly 20 times the number of actual farms there are in the United States.”

Analysts report that Zynga, the company that created MafiaWars and FarmVille, likely brings home more than $250 million annually. 

The Consumerist explains the type of clickable advertisements that is burning players of these games and making lots of money for Zynga. The ads are known as lead generation offers.

“You can complete various lead generation offers, many of which are of the ‘answer page after page of questions and opt in and out of receiving various kinds of spam’ variety. Some of them install malware and adware that is impossible to remove. And some of them secretly subscribe you to monthly recurring $9.99 credit card charges.”

In a video shot last spring and posted to YouTube this week by TechCrunch, Zynga co-founder and CEO Mark Pincus admits to scamming users.  

"I did every horrible thing in the book to just get revenues right away.  We gave our users poker chips if they downloaded this wiki toolbar, which was like, I don’t know, I downloaded it and it once and couldn’t get rid of it.  We did anything possible to just get revenues so we could grow and be a real business."

TechCrunch, which has been very critical of Zynga, reports the company receives a large portion of its revenue from lead generation ads. 

“Andrew Trader, co-founder of Zynga, said the company makes about a third of its revenue from advertising and another third from virtual goods transactions. The last third comes from companies that provide commercial offers, trading Netflix memberships and marketing surveys for in-game cash.”

Since the release of the video, Pincus has vowed to clean up the company.  Facebook also wants to stop these scams, as ZDNet Asia reports.

“Facebook announced last week in a post on its developer blog that since it updated its developer platform terms of service this summer, it has disabled two ad networks that it says were running deceptive advertisements.”

So what do you think?  Should companies like Zynga be allowed to use these tactics?