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Quite often, Linden Lab "policy" is nothing more than a front, a "whitewashed" grave so to speak.  It's quite common where legal or ethical issues are involved, for companies to make a lip-service show of handling a situation, but in truth don't really care whether it actually works or not.

"Hey, we've set up the policy and our customers are ignoring it.  We don't have the manpower to police 1.3 million residents.  It's THEIR fault."   Blaming the customers is an age-old Linden Lab trick.

Most of LL policy is ineffective.  As pointed out, the company has never had a good, solid, effective anti-griefer policy with consistent results.  Their entire method of handling intentional TOS-offensives is indeed "toothless".  People sign up for bogus free accounts, they grief, and if on the off-chance they do get banned, they just sign up with a new account and do it all over again.

The adult grid and LL  "policy" is largely ineffective.  The company can't possibly police the number of members and potential offensives.    I am the first to admit that I am sick and tired of perv-merchants being in every market I visit.  I'm all for removing them from the mainland to a specific continent.  I just don't believe LL has the ability to effectively do so under current policy.

When a company lacks manpower, the effective way to enforce such policy is to set some major examples and let simple fear do the job.  

1. Warn a few major offenders
2. If they don't move within 10 business days, ban them from the grid

After that's happened to a dozen people, the word will get around.  Sure, it's a Russian Roulette game where people may escape the bullet-- but the knowledge that there IS a bullet will force folks to comply.  As they do comply, that leaves fewer people in the Russian Roulette game, and the chances of getting the bullet increase. 

Toothless policies have for years been the laughing stock of Linden Lab.  They are known for banning people where such is not necessary (arbitrary drama-queen employee decisions), while leaving major offenders un-touched for years.   Among griefers the company is a joke... which is a shame for the rest of us who try to respect and even help enforce company policies in our own lands.