Linden: 150% fraud penalty applies to exchanges, not residents
By Eric Reuters
The 150% penalty for purchasing fraudulent currency is directed primarily at third-party currency exchanges, representatives for Linden Lab told Reuters on Thursday.
“The policy stated at http://secondlifegrid.net/programs/api/risk seems to have caused some confusion,” said Peter Gray of Lewis PR, Linden Lab’s public relations firm. “The policy stated at the above webpage is directed at operators of Linden dollar exchanges; if Linden Lab identifies that the operators of these exchanges have purposefully purchased fraudulent L$, Linden Lab may recoup 150% of the amount.”
“To date, this fine has never been levied,” Gray said.
On Wednesday, Linden Lab urged residents on its blog not to purchase Linden dollars from unknown third-parties, as some vendors may be selling game currency purchased with stolen credit cards.
In response to Linden’s announcement it would “recoup” fraudulent currency, Tateru Nino of Massively.com imagined how gifting a resident bad currency could be used as a griefing tactic.
“Being in receipt of fraudulent funds requires no action on your part,” Nino wrote. “Someone can send you Linden Dollars that were purchased through (eg) a fake credit card number, and you cannot prevent it. Your account will likely be suspended, and you’ll end up paying half again what you unknowingly received.”
Nino’s story was picked up on Wired.com.
Gray downplayed the risk to residents. “Linden Lab has no blanket policy to fine all buyers of fraudulent Linden dollars, and any incident is handled on a case by case basis,” Gray said.
He urged third-party currency exchanges to enroll in Linden Lab’s Exchange Risk API. “The fine policy applies to transactions in which fraudulent L$ were purchased and the Exchange Risk API was not used; it does not apply should the Exchange Risk API return a result indicating an acceptable risk,” Gray said.
I have to challenge Gray’s assertion - I received an email to the same effect, and it does not jibe with the information we’ve received from other sources.
Every story we’ve received or read elsewhere regarding the recipients of fraudulent funds has ended with more funds being removed from their accounts by Linden Lab than were transferred to them. Perhaps there *is* some inaccuracy in the sources - but they are consistent, and Linden Lab has refused to discuss the matter on each occasion that we contacted them about it - until today.
My inclination at this point is that Gray is in error and we are seeking further clarification from him with respect to the information we have - but we expect that Linden Lab will not comment on specifics, as is their policy in cases of fraud or abuse.
Fri Jan 4, 2008 10:01am PSTLL takes the additional amount from whoever they can get. Since most fraudulent sites use temporary alts that get banned within a short period they end up penalizing those that bought the money.
While I have no personal been a victim of this (I only buy on the lindex or SLExchange.com) I have heard of many people being slapped with the 50% overage. Enough that I doubt LL has *not* charged residents who purchased funds from dirty sources.
Fri Jan 4, 2008 10:01am PSTI have to agree that it’s innacurate to say that the person who got the money has never been punished/never is punished. From what I have heard there have been many reports of the buyer having up to and including 150% taken when the seller couldn’t be hit (using alts for example as mentioned above). I suggest choosing better sources next time since this is a big inaccuracy.
Sun Jan 6, 2008 10:01pm PSTWhy is the PR firm blatantly lying about this matter? Looks like LL needs to hire a different PR firm. Maybe one with people that know what they are talking about AND know how to lie without making LL look like retards.
This is ridiculous lol.
Mon Jan 7, 2008 1:01pm PSTI know of a person that Sold some land and the buyer used fraudulent funds to buy the land, No sooner then the sale go thru then My Friend was Ban from SL, After a week of Emails to LL he got a reply saying his account was Ban becuse he had taking fraudulent funds as payment. Like he would have any clue, LL to this day refuses to listen to his complanits, LL Lies to its Custmers, Wrongfully Punishes Them and Even Supports Frad and Scaming in The SL comunity. As it allows People to buy Sims sell land in the sim, Reclaim the land with out resson and resale it. Which in the Real world would be frad and a crime punishable with jail time. Source Second Life Herald, Where a Sim owner sold land, reclaimed it after the new owners paid the Tiers in full, and resold the land, When the former buyers complained to LL they where told “…island owners have absolute power in their tiny fiefdoms.” Which is based on LL’s terms of service. Which “…A Pennsylvania judge has ruled that Linden Lab’s terms of service for Second Life residents are not legally binding,” I say its high time for LL to be taking off its high horse, even if that takes major lawsuits to do it.
Tue Jan 8, 2008 3:01pm PSTTo the above poster, indeed it’s true. Linden allowed several on a sim be thrown off and the sim owner resold the sim to others.
After numerous complaints to Linden, nothing was done and the land baron with 100 sims kept right on a moving along.
Thousands of lost real USD.
Fri Jan 11, 2008 4:01pm PSTJust where does LL expect exchanges get their money from? From the people who use the exchange. We get fined 150%, we have to pass that cost on to our customers, so dont try to claim users dont get hit. If anybody gets punished, it should be the fraudulent users who try to exchange fraud L$. But no, LL always punishes the victim and not the villain. Theres even someone who hacked my SL account who I have proven beyond a shadow of a doubt he did it, and LL has not banned him from SL
Wed Feb 13, 2008 4:02am PST“To date, this fine has never been levied,” Gray said.
uummm ok then why was i punished when a hacker dumped 1.2 million $L into my account and linden labs FINED me 1.8 million + my own 302,000
my account BEFORE the 1.2 million was dumped onto me was
302,000
amount dumped onto my account when i was offline
1,200,000
total amount including my own $L 1,502,000
my account was suspended and when i got my account back in january 2007 i was MINUS 1,892,000
this means LindenLabs took a total of $L3,394,000
so this is MUCH more than 150%
below is what transpired in an email convo and a support ticket convo
——————————————–
Ticket Summary
Ticket #: 4051-4519129
Status: Solution Provided
Date Created: 2/23/08 7:27 AM PDT
Date Updated: 4/18/08 5:10 PM PDT
Ticket Description
Summary: minus amount on my account
If issue is about an Alt account, what account?:
Ticket Type: Billing and L$
Basic or Guest Access - only a few ticket types allowed:
Basic Account issues:
Contact Email address:
Technical issue:
Viewer/web:
Inworld Issue:
What Type of Connection do you Have?:
Operating System:
Web Browser:
What Graphics Card do you have?:
Are there multiple monitors?: 1
Crash/Error:
Error Message:
Listing issue:
Group issue:
Region Request:
Land issue:
Group name:
Location (region, coordinates):
Accounts issue:
Partner name:
Billing type: Linden$
Linden$ Payment:
LL Payment type:
Resident payment issue:
Billing issue:
Charge type:
Credit issue:
Payment type:
Paypal email address:
Real name (on payment account):
Credit Card type:
Transaction Amount:
Transaction Date:
Transaction Time (PST):
Region Change:
Transfer type:
Other person’s name:
Region Name:
New name for Region:
Owner of island it will be adjacent to (if any):
Order Date (approx):
Avatar Name:
Registration Date:
VAT questions:
Disabled Issues:
Auction ID:
Class 4 Region Name:
Class 5 Region Name:
I want to be a DPW builder:
Core Skill:
Name of Guest:
Type of issue:
Billing Problem:
L$ and LindeX issue:
Inworld Problem:
Software Problem:
Feeback:
This region is:
Transaction Type:
Buying Price (will be debited from your account by Linden Lab):
Selling Price (which will be credited to your account, less the transfer fee):
Preferred Language: English
Details: in December 2006 i was victim of fraud, because of the way it was handled i had L$1,873,000 taken from my account by linden labs here is a copy of the email convo which was involved
——————————-
Hi, We have released your account, chmarr Walcott. At the time of release it was assessed L$1,873,000. This is the amount that your account was given to you by a party who obtained them by fraudulent means.
Regards, Jill Linden
——
William Middleton wrote:
Hi there
Jill this is the FIRST time i have heard about this fraud when my account was locked down i received NO information as to why and how it was closed until now as for the so called L$1,873,000 i NEVER received that… the only time i received that much money was when i was running a “sploder” it’s like a lottery machine everyone throws money into it and after about 5-10 mins the sploder “explodes” and it shares the
total pot of money between the ppl that entered it the only downside the sploder does not keep a record of the names of the ppl but as you may have already checked my account does which i just checked and the dates 20/12/2005 - 21/12/2006 are missing and that can only be done on the linden lab side but as for me and a few other being told to pay back the amount that was put into the sploder even tho i have no control over it why should i pay for someone else’s action as i can’t afford the real dollar value behind that and i know that you have the person who made the transaction under investigation which means i am being forced to pay money back on something i did not do
William Middleton
————————
Dear William
Here is the information on the two main transactions.
Payment 600,000 2006-12-23 14:13:57 to chmarr Walcott
Payment 1,200,000 2006-12-23 16:15:16 to chmarr Walcott
These L$ were obtained by fraudulent means and gifted to your account. Your request to process the credit from the proceeds of sale of a portion of these ill gained funds (L$302,000) was declined. We note that this account is in final status. If the account is abandoned, subsequent accounts will be held for fraud.
Regards,
Jill Linden
————————–
William Middleton wrote:
but i did not know they were stolen and the “gifts” were put into a sploder ..meaning it was put into a lottery style machine and even tho it was my sploder but it randomly spits the money out to whoever enters it and the transaction account history DOES say “fair sploder” so i am being accused of fraud even tho i did not know the money being put into my sploder was stolen
William Middleton
———————
William,
We did not imply that you committed fraud. What was stated was you were in receipt of funds that were obtained fraudulently. As a real world Example, if someone were to steal something and give it away, the Recipient would have no legal claims to it. It’s stolen goods and would be recovered.
Jill
————
Please fix this as i was a victim and i feel i am still being blamed for something i had no hand in and also there is no option in refusing payment and at the time the money was dropped into my sploder I was offline due to the time it was done it was 00.30 uk time i also wish to recover the $1041 USD which is still in my account.
thank you William Middleton
Reference Ticket number:
Attachment:
Solution
Solved:
(4/18/08 5:10 PM PDT) Hello chmarr,
We will not be reversing this previous assessment.
Regards,
Patsy Linden
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History
Action Date Actions CSR /Customer Comment
4/18/08 5:10 PM PDT Sent Final Resolution Patsy Linden (See solution)
4/15/08 3:01 PM PDT Reopened chmarr_Walcott Walcott i’m sorry but since linden labs did not TRY to corrent what had happend to me i am unsatisfied and due to the legal “solution” in which was offered i cannot do this as i am NOT in the usa and since it was your own risk API system that took my account down and not an actual linden employee i cannot pursue legal proceddings.
the poerson that did “hack” the system in 2006 is STILL in secondlife and i DO have evidence to prove this but due to the american legal system you will say it is “insuffecant”,
what i am asking is to have my account put to at least ZERO if you can do this then i will accept it, but when i heard that linden labs fixed the other’s affected in the matter of hours and i have been waiting 2 YEARS i find insaine at best.
it will take OVER 60 YEARS at the amount i am getting each week on my account.
now even by your own standards that is just nut’s.
remember linden labs gave back the following amounts to the people i was given proof about
nexxus ambassador - $L16,000,000
corsi mousehold - 521,000
squirrel wood - 80,000
axeonos fluffball - 56,000
alynna vixen 122,000
anora pearl - 252,000
these were all fixed in the space of 1 WEEK because some of the LL staff asked them who was in charge of the party at the time and being it was me i was then told by admins only in january 2008 that an “agreement” was reached between those people and others as long as they named me.
so i am not happy and i am NOT satisfied, and because what had happend involved an american hacker who LL did not ban nor suspend or even chase legal proceddings against i cannot sue against due to the policy of what had happend.
i live in the uk and i cannot send legal documents to your english offices since they were not even open or in operation at the time of the major security breach of your account servers by fayte baxter/Uildiar Kuhn in september 2006
4/15/08 2:05 PM PDT System Ran Alert Auto-Close Solved Ticket
4/8/08 2:05 PM PDT System Ran Alert Solution Reminder
3/25/08 2:05 PM PDT System Ran Alert Support Satisfaction
3/18/08 2:01 PM PDT Sent Final Resolution Teeple Hi chmarr,
As our support login page states: “When you’re logged in as a Basic account holder or Guest, you should only use the Special Questions - Basic account or Guest Login ticket type. Any other support ticket submitted by a Basic account or Guest login will be ignored.”
This ticket was submitted as a “Billing and L$” type. That’s the reason it sat idle.
To your concern: As the Billing Team originally communicated, the immediate confiscation of fraudulently-purchased L$ at their point of detection is necessary to protect the in world system of legitimate L$ purchases, sales, and transfers.
However, we recognize that the policy, while essential, can inconvenience residents who are themselves innocent of any wrongdoing.
For that reason, while we do not offer recourse in such cases, we will gladly cooperate with any properly-credentialed court or justice agent with appropriate jurisdiction, should you decide to pursue direct recourse with the seller.
Any subpoenas or official communications should be directed in writing to:
Linden Lab
1100 Sansome St
San Francisco, CA 94111-1205
Attention: General Counsel
For the Lab,
– teeple linden
Mon Apr 21, 2008 3:04am PDT