Video Game Scams on the Rise, New Report Warns
By Movieguide® Contributor
A new report from the Consumer Financial Protection Bureau (CFPB) warned gamers about the rise in video game scams and the lack of protection they will receive from the companies that host these games.
Video game scams have been around for as long as online gaming has given scammers the means to swindle people. However, while the loss from a scam may have amounted to some pocket change in the past, with the rising value of virtual assets and billions of dollars being converted to virtual currency every year, video game scams are now starting to become as lucrative as their real-life counterparts.
“Americans of all ages are converting billions of dollars into currencies used on virtual reality and gaming platforms,” said the CFPB Director Rohit Chopra. “As more banking and payments activity takes place in video games and virtual worlds, the CFPB is looking at ways to protect consumers from fraud and scams.”
According to the report, in 2023, Americans spent nearly $57 billion on gaming. This spending included buying hardware and software and conducting in-game transactions. With that level of money being converted into virtual assets, games and platforms now often resemble the real-life financial market.
Unfortunately, because these activities are taking place in virtual markets, gaming companies are not currently required to offer players the same level of financial protection that banking institutions provide in real life.
“Consumers report having little recourse with gaming companies when they suffer losses, and game publishers claim to have no obligation to compensate the players for financial losses,” the report explained.
With the current system generating tens of billions of dollars a year, gaming companies are unlikely to change their approach to the transaction of assets unless they are required to do so by law. Despite the growing frequency of scam attempts, no laws are currently being passed to better protect players, leaving it up to them to avoid getting scammed.
Movieguide® previously reported on how video games replicate the real-life market:
Modern video games often have complex marketplaces which can teach players virtual lessons that apply to the real-world economy.
“They match really well,” researcher Dmitri Williams said. “When people have the same incentives, people feel about their in-game money the way they feel about the real-world money.”
This can create an environment that leads to all kinds of economic situations–both good and bad–that are true to the real-world market.
In 2009, for example, players in the video game Eve Online experienced a run on the banks. Depositors were desperate to pull out their ISKs–the game’s virtual currency. Because the institution, called Ebank, was a side project set up by players, it did not have any deposit insurance, resulting in many players losing their ISKs due to the run.
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