SUNSET BEACH -- Imagine this: As you log into Second Life, you realize your money and possessions have been stolen. You quickly contact Linden Lab, hoping to get your money and goods returned. This fraudulent activity is on the increase in Second Life and Linden Lab has implemented a variety of tools to combat fraud. However, in some cases, these tools has met with mixed results.

The increase in fraud within Second Life has kept pace with the increase in residents and monetary supply in-world. The explosive growth over the past 12 months has seen a rise in fraudulent activity, with residents falling victim to phishing schemes, account passwords being cracked, malware exploits in world, all with possible devastating results. This type of activity leads to the loss of Linden currency, inventory items, credit card data, and can result in stolen identities.

Linden Lab’s efforts to counteract these criminal activities have been spelled out in numerous postings to their blog . LindenLab's most recent and controversial strategy is to apply an on-hold status to accounts. This on-hold status has angered many residents, who cite a lack of notification of the on-hold status and frustration in trying to have their account restored. Linden Lab’s Aug. 2 notice of the on-hold status can be located on the Second Life blog here. It prompted 75 responses, many from frustrated residents. Linden Lab notes the on-hold account program was implemented to combat phished or stolen accounts, possible fraudulent Linden Dollar transactions, and delinquent account/terms of service violations. The monetary thresholds being used as part of the program appear to be automated but have not been explained.

Cory Edo, of the Electric Sheep Company, which has an world location here , experienced the on-hold status program recently when working on a stress test project. The game part of Edo’s project included beta testers who participated in the stress test and then completed a feedback note card. Edo and the Electric Sheep Company paid each beta tester's avatar $L1,000 for their efforts. The most that Edo paid out in a short time span was about L$10,000. Within a few moments, Edo was suddenly logged out of Second Life. “I thought the sim went down, but at the same time I got an e-mail from LL saying my account had been temporarily suspended due to potential fraudulent activity,” Edo recalled. Edo located a Linden, on a Friday night, who checked her account and released the on-hold status. After logging back in, Edo discovered two of the beta testers were also suspended. The suspension also removed them from Search. Contact with a Concierge team member resulted in the beta testers' reinstatement.