Scammers Continue to Wreak Havoc in MMO's

eldavojohn writes "We're all well aware of the scams that sometimes happen in online games like Eve Online. But despite this looking primarily like a problem with Eve Online, the MIT Technology Review brings us stories from Second Life and the very real $700,000 (USD) in Linden Dollars that has recently disappeared in what is appearing to be a classic ponzi scheme by a company named Ginko Banking. Unbelievably high interest rates coupled with some shady withdrawal limits leads to classic epic losses to investors. Eve Online was merely virtual currency but Second Life has a real monetary value associated with Linden Dollars & therefore is certain to see more and more scams pop up like this. How can Linden Labs set up a safety net to catch things like this?"

Comments

They shouldn't

[Icepick_]

Let people be stupid.

Re:They shouldn't

[PowerEdge]

That'd be nice and all... But in 1st life, people are losing homes for being caught up in schemes, not being "smart" about their purchases, etc. and real action is being taken to punish those who defrauded such "rubes". For some reason or other the Gov't and people in general frown on swindling.

Re:They shouldn't

[PowerEdge]

I agree 100%. Though there was definitely predatory lending and people buying on supposed "house payments" not understanding that taxes, and resets would in effect triple payments in a short couple of years. People buying said homes sometimes were expressly ignorant, or thought they could easily get out of the house when they no longer could afford it. Lots of people lost money in the 1990s and early 2000s due to VC and Media hype on xyz.com IPO. Lots of smart people lost a fortune. It happens. Due diligence is always necessary when forking over hard earned, real money. Unfortunately many people are gullible and are sold a pack of lies. Those selling the pack of lies should be prosecuted and punished. Personally, I fault the Government Schools and Parents for creating the environment we have today. People are manufactured stupid now.

Re:They shouldn't

[CrankyFool]

Hardly.

If we treat this as a moral or ethical issue, we can reasonably argue that we should let people learn, the hard way, how to be responsible for their own finances, especially in an environment where the actual exposure is relatively minimal (the person they covered lost $144 in this scam, and she apparently made all that money by doing things she liked doing on Second Life anyway -- we're not talking about not being able to pay rent here).

But it's not a moral or ethical issue -- it's a commercial issue. If Linden Labs wants to encourage people to treat Lindenbucks as real money -- and clearly, they do because otherwise they wouldn't set up an exchange rate to the real deal -- then they've got to deal with what is essentially a threat to their profitability. If they don't set up a system where it's safe to exchange money for other tangible goods (and stocks or CDs are tangible), then, in fact, people will learn to protect themselves -- by not transacting with their money and essentially putting their virtual dollars under their virtual mattresses. This is not an outcome that is ideal for Linden Labs -- which is why, regardless of ethics, morality, or "think about the children (or stupid people)!", they should do something to create some sort of reliable, authenticated commerce system that allows for these activities -- out of sheer self interest.

Re:They shouldn't

[gowen]

Yes. And while we're at it, why not let little old ladies be weak, and let the much stronger muggers take their money.

I mean, if they deserved that money, they'd be strong enough to still have it, right?

If the smart should be allowed to scam the stupid, why shouldn't the strong be allowed to steal from the the weak?

Re:They shouldn't

[Anonymous Coward]

But in 1st life, people are losing homes for being caught up in schemes, not being "smart" about their purchases, etc. and real action is being taken to punish those who defrauded such "rubes". For some reason or other the Gov't and people in general frown on swindling.

Hahaha. Aside from some cases of fraud, the majority of these cases are people who normally wouldn't qualify for a regular mortgage, and were offered a subprime mortgage at a higher rate, which allowed them to purchase a home. Some of these people bought a lot more than they could afford, and the homeowners are losing their homes as a result (incidentally, the lenders also lose money in foreclosure).

By comparison, if a bank uses reasonable, impartial criteria (like having a verifiable job, income, down payment & assets) before issuing a mortgage, then civil rights activists would be threatening to sue, saying that the lender is discriminating against minorities.

Yes, it's very sad that these people lose their homes, but they bought much more than they could afford. Back when I wasn't making very much money during the high-tech bust of 2000, I drove a beat-up Honda Civic. No one would sympathize with me if I had bought a big BMW and couldn't keep up with the payments.

Live within your means, and read before you sign anything.

Re:They shouldn't

[Anonymous Coward]

The guy hadn't even tried to do a basic reality check.

They rarely do. I live in a relatively poor country, and all the time I see tourists come here and "fall in love" with a local girl. They buy furniture, rent an apartment for her, and when they go back home they keep sending money. In the mean time her real boyfriend has moved into the apartment with her and sleeping in the bed that he bought.

Once just by chance I happened to be talking to one of these tourist "boyfriends," and told him what was happening. What a mistake. Not only did he not believe me, he actually threatened me for "telling these vicious lies."

When the illusion is sufficiently compelling the desire to believe trumps rational thought.

Re:It's a game

[Chubby_C]

It is a game, the game allows it so it should be fair play.

People have to watch out for this in real life, they should watch out for it in second life

The scammers are obviously better players

ugh..

[Detaer]

How does second life still drum up this much publicity? Its nothing but over hyped marketing and furries looking for some sort of acceptance. If you don't talk about it, second life will disappear.

Re:ugh..

[Kreigaffe]

I was scrolling through looking to see if someone hadn't made this sort of comment.

If no one had, I was going to.. instead I'll throw my support behind your comment as much as I can with no mod points.

Second Life is just.. just fucking terrible. I've seen articles about second life in all SORTS of publications, because the writers play.. and the funniest one was in a business mag, geared towards management (i can only assume middle.. blegh). Talked about all sorts of buzzwords, bunch of bullshit, you get to the end of the article and the writer included a shot of his in-game character, how nice.

With a tiger's head.

The shit you're forced to read when you're not-working at work and already read the 4-day old newpaper..