The games are behaving like unregulated banks, which the US government has not noticed

A new report from the U.S. Consumer Financial Protection Bureau (CFPB) — an organization focused on enforcing laws that protect consumers — indicates that the bureau is aware of and monitoring large online video games filled with online games. In-app purchasesAnd the digital currencies and shady third-party markets that turn these games into Fake banks and casinos for children.

For years now, online video games have been around Featured microtransactions and in-game currenciesand digital asset trading, and sometimes even the ability to “withdraw” your profits. And you like these games fortnite, roblox, And league of legends– It started bringing in millions and millions of dollars, which led to publishers investing more and more in payment processors and other financial services. This all sounds more like a bank than a video game, however, these companies and games don’t have to play by the same rules as financial institutions. This is something the US government has noticed.

New video game industry report from the CFPB

On April 4, The CFPB published a new, lengthy report About banking services within virtual worlds and video games. While the report does not indicate that the CFPB is looking to take action nor recommend any immediate plans, it does show that the consumer-focused bureau is aware of how video games have become online banks for many children.

“For many young people today, gaming may be theirs Introduction to financial activity“, says the CFPB. “For example, games provide youth with the opportunity to learn about how to earn currency, manage assets, and make purchases. Gaming companies may view young gamers as an opportunity to create lifelong consumers early.

The CFPB warns that these younger players are more vulnerable to advertising and monetization tactics, such as bundling coins together to hide their value. The CFPB also says that regardless of age, people can use these online games as banks, even if the companies don’t directly support this type of behavior.

“Many gaming companies also claim that their gaming assets have no cash value, cannot be exchanged for fiat currency, and that their environments operate as closed markets,” the CFPB wrote. “However, these markets can be quite porous and gaming assets can have significant value, including outside of the game itself.”

The CFPB explains that games allow users to purchase assets and currencies using real money, and although most games do not allow you to sell those digital items to other players, Third party ecosystem Many shady websites and apps have sprung up to facilitate these types of out-of-game transactions. This means that digital assets in the game are treated like currencies, with the current exchange rate of certain items openly tracked online.

The report also notes that in-game digital items could become currencies within the games themselves if approved by the community, citing the example of plastic chairs in an online game becoming a popular means of payment.

“In the virtual world Habu Hotel, “Items are exchanged between players through the in-game market,” the report says. “Plastic chairs were originally designed to furnish virtual apartments. Over time, these chairs will gradually become the game currency. Market prices will be denominated in plastic chairs, and exchanging plastic chairs will allow players to purchase in-game goods or services.”

Games are like banks, but they lack security and regulation

Because assets are worth real money and can be sold and traded for actual cash using third-party services, video game accounts can be as valuable and important to players as their bank accounts. However, according to the CFPB, most video game companies do not have bank-level security or protection for user accounts. When a player’s account is hacked or stolen, game publishers do little to help.

“In complaints filed with the FTC and CFPB, numerous players reported hacking attempts, account theft, fraud, unauthorized transactions, and loss of access to game currencies and virtual items, but received limited recourse from gaming companies,” the CFPB wrote. “. “Gaming companies often take a ‘buyer beware’ approach, putting the onus on individual players to avoid these scams and phishing attempts.”

“They may close or ban the accounts of players suspected of fraud and phishing, but they do little to provide remediation for the victim. For example, stolen items on Steam are not returned due in part to market incentives. Steam states that the value of private virtual items “It is ‘determined at least in part by the rarity of that item.’ If more copies of the item are added to the economy…the value of every other instance of that item will decrease.””

The image shows Fortnite characters near a treasure chest.

picture: Epic Games

The report also documents that players complained of their accounts being terminated when they tried to pursue recourse through their banks or credit card companies. When this happens, players are taken out of their valuable accounts.

“When a player loses access to their account because they are accused of violating a game’s terms of service or the game is terminated altogether, game publishers state that they are not obligated to compensate players for their lost assets or return the money players have ‘invested,’” the CFPB explains in its report.

At the conclusion of the report, he said: CFPB It states that due to “limited consumer protections,” video game accounts are more vulnerable to financial losses from theft and fraud.

“Consumer protection laws apply to banking and payment systems that facilitate the storage and exchange of valuable assets,” the office says. “The CFPB monitors non-traditional markets where consumer financial products and services may be offered, including where such products and services are offered by or in connection with proprietary gaming platforms.”

It will be curious to see if game publishers and companies like Valve pay attention to this report and try to improve security and provide better support to their users. If not, the US government may become more involved in regulating what has become the virtual Wild West of online video game banking and currencies.


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