Press Release
The Public Interest Advocacy Centre
Wednesday, January 11, 2012
http://www.piac.ca/consumers/consumers_should_be_wary_of_risks_in_virtual_worlds/
The Public Interest Advocacy Centre (PIAC) today released a report
entitled “A Virtual Fortune: Consumer Protection for Banking and Consumer Fraud in Virtual Worlds”. The report studies virtual worlds,
which are sometimes described as “massively multiplayer online
role-playing games” (MMORPGs) that provide an immersive virtual
experience for many players that many players consider to be “real”.
Many virtual worlds have developed virtual economies based on a virtual
currency that may be exchanged for real-world currency. Players will
play the role of consumer and entrepreneur within virtual worlds.
As virtual economies grow, there have been instances of fraud in
these virtual worlds. PIAC’s report studies examples of economic fraud
conducted in virtual worlds such as Second Life, Entropia Universe, EVE
Online, and World of Warcraft. For example, there have been cases of
bank runs, securities fraud, and theft of virtual property. These
situations have resulted in a financial loss to consumers in virtual
worlds. Notably, virtual world operators in most cases stated that these
fraudulent schemes are “part of the game” while denying responsibility
and liability and refusing to compensate players who have lost money to
fraud in virtual worlds. Efforts to set up in-world justice systems have
not been successful.
“Where a consumer falls victim to fraudulent activity within a
virtual world, they are not likely to be successful in seeking redress
or compensation for their losses,” said Janet Lo, Legal Counsel at the
Public Interest Advocacy Centre and author of the report. “Virtual world
consumers must be aware of potential risks to their in-world assets and
property, such as in-world fraudulent schemes or unilateral actions by
virtual world operators dealing with user accounts.”
Given that individuals view their virtual world avatar as an
extension of themselves, the report explored whether real-world rights
should extend to the avatar and whether traditional notions of property
rights and consumer protection should apply to virtual avatars
participating in virtual economies. The report noted the use of End-User
License Agreements (EULA) or Terms of Service by virtual world
operators to limit their liability and stipulate certain mandatory forms
of dispute resolution. The enforceability of these terms in real world
courts have been questioned but real world case law has not yet
clarified the legal status and rights of virtual world users.
The report notes that real-world regulators around the world
continue to examine virtual world economies and contemplate whether
real-world regulation should be applied to financial transactions
conducted in-world. For example, securities and payment regulations
could be applied with a view to providing greater consumer protection to
virtual world users.
“As virtual world experiences blend into social networking websites
and other areas of commerce, regulators will need to consider how
consumer protection will operate and whether the application of
real-world regulations will be sufficient to protect consumers,” said
Lo.
Friday, January 20, 2012
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