[MUD-Dev] [NEWS] Gaming Open Market

[Peter Keeler]

Amid this discussion of selling virtual property, one of the more
interesting experiments in the field has just been struck a very
crippling blow. The Gaming Open Market has been allowing trades
between US dollars and numerous game currencies for awhile now, and
seemed until today to be steadily gaining in popularity and trading
volume. They are now victims of some pretty massive PayPal fraud and
have restricted their markets to solely Linden Dollars.

I'm less interested in opinions about the morality or profitability
of trading virtual goods as I am in the health of the actual
market. This seems to be a sign of just how fragile the marketplaces
actually is, where a seemingly growing site can be nearly eliminated
in a single day. Will sites like GOM continue or is that paradigm
doomed? Will there ever be a site that allows free trade of virtual
currencies rather than requiring a trade to a real currency first,
or is that far too risky?

Included below is the news announcement from the Gaming Open Market
explaining what happened.

----- Forwarded message from jamie at gamingopenmarket.com -----
    Date: Tue, 22 Jun 2004 00:55:50 -0400 (EDT)
    From: jamie at gamingopenmarket.com
Reply-To: jamie at gamingopenmarket.com
 Subject: [NEWS] Gaming Open Market
      To: scion at divineright.org

Ok, here's what's going on.

Sunday afternoon, a new client purchased over $3000.00 worth of ISK
and SWG credits. He nagged us for delivery, and then immediately
after receiving the goods, reversed the charges claiming we never
delivered. He was making use of a well-known loophole in PayPal's
chargeback policy that favours the purchasers of "intangible goods"
over the sellers. He explained this to us in an email he sent
today. He claims the ISK and credits he stole are "payment" for the
lesson he tought us.

This incident has been reported to the FBI Internet Fraud
Department, and tomorrow to the RCMP. We have compiled as much
information as possible on this person, including his name, address,
phone number, email addresses and the IPs used to log into our
site. All of this information will be turned over to the
authorities.

Now, the complaints registered with the FBI were two-fold. The first
was about this person who scammed us. The second was about
PayPal. PayPal's policy rewarding the perpetrators of this type of
fraud not only makes it easy, it actually *encourages* it. Please
take this as a lesson learned the hard way. If you deal in any
"intangible goods", be it downloaded software, music, documents and
data, or game currencies or items, PayPal is *not* your friend.

We are currently providing as detailed information as possible to
the PayPal fraud department, but we're not holding out hope for a
favourable settlement.  Our PayPal representative has made it very
clear that we can provide any evidence we want, but that it doesn't
matter - we deal in intangible goods and hence have no rights.

  NOTE: Any employees of CCP or Sony Online Entertainment (or any
  other game publisher for that matter) are encouraged to contact
  us. We know we violate your user agreement - we just want this
  behaviour to stop! It hurts everyone, *including* your paying
  clients! I know you have detailed transaction records proving
  exactly when and where those transactions were made. This
  information could help get the ball rolling. Linden Lab has worked
  with this. So can you!

Now we have always called ourselves a "secure way to trade". By that
we mean that we *actually* provide seller protection because *we*
guaranty delivery. We are holding true to this policy, and absorbing
this $3000.00 loss. This $3000.00 is approximately 70% of our
profits since January. We didn't build GOM to make us rich. We built
it as an experiment in digital world economies, and to provide
people like you with a cheaper and more efficient alternative to
eBay. We cannot afford to be tought another lesson.

Until further notice, all trading in *all* games except Second Life
is halted.  All currency you may have on deposit with us will be
returned to you at a mutually convenient time. Please request a
withdrawal and contact either Tom or myself to schedule it. PayPal
withdrawals will also be made on our regular sporadic schedule.

Linden Lab (creators of Second Life) is the only publisher to
support our efforts. Second Life business will continue as
usual. Please accept my apologies for this delay. Linden Lab has
worked with us before on this type of fraud, and we're confident
that our future with them will be long, happy and prosperous for
all. :)

Keep yer stick on the ice.

Jamie Hale
President - Gaming Open Market Corp.
jamie at gamingopenmarket.com
----- End forwarded message -----


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