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When I read this comment by Chmarr Walcott, I had to do a double take:

well for the love of god.

in december LL took TWO MILLION from my account even tho i only had 302,000 in my account due to someone dropping 1.6 million into my sploder the time it took for the drop down blue info box telling me that the money was dropped into my sploder i was kicked off the server and my account suspended.

it took them untill mid january to answer my emails.
after i got back on my account was in the red to the tune of MINUS 1,892,000 i fired off emails to just about everyone of the accounts department asking what the hell is going on.i was basicly told that i was a victim of fraud and since i “took” the money i was to be punished.

my account WAS MINUS 1,873,000
its took me from january untill today to get to MINUS 1,513,220

i have tried phoning LL i have sent off about 4 dozen emails but the last phone call i was told to “f*** off we dont want you in our game”

Incredible! So, in one of my comments I mentioned that I would like to hear more about it. Chmarr Walcott contacted me inworld, which surprised me - after all, with an account balance of -1,513,220 Linden dollars, I would think that Linden Lab would have discontinued his account by now - or sent people with baseball bats to go collect. That is about $5462 US dollars - not a small amount of money. The whole thing sounds incredible - but there he was, posting it as a comment on the Official Linden Blog. Amazing.

He told me that there was a party where he was the DJ. He had a 'sploder¹ out and someone placed 1.6 million Linden dollars within it, and that as soon as he saw the blue dialog - he was booted. His items from the simulator were returned - and he also said that 80%² of the estate managers and administrators were also suspended.

The Heart of the Matter

For his part, after his ban from Second Life (Dec 18th, 2006 to 28th Jan, 2007) he had a negative balance of approximately 1.9 million Linden dollars. Chmarr claims to have had 302,000 Linden dollars in his account before this happened. Peter paid Chmarr, Chmarr paid for all - the 150% fine that Linden Lab applies which is not a part of the Second Life Terms of Service, but exists only in this Risk API notice³:

If Linden Lab, in its sole discretion, determines that a Second Life user has purchased Linden Dollars for real currency through any means other than LindeX, and that the seller of such Linden Dollars acquired such Linden Dollars through fraudulent means, or any other means in violation of the Terms of Service, then Linden Lab will consider the buying user a complicit party in the fraud or violation. As a penalty for participation in such fraud or violation, Linden Lab will reduce the Linden Dollar balance of the buying Second Life account (and/or any Second Life accounts owned or operated by, or affiliated with, the owner of the buying account), by any amount up to 150% of the amount of Linden Dollars involved in the transaction. In addition, repeated participation in such fraud or violation will result in suspension or cancellation of the buying party's accounts. (The selling account will of course be suspended or cancelled on a single fraud or violation at Linden Lab's discretion.)

If this seems a little peculiar to you, you're not the first to think so. Unfortunately, there is no way to stop someone from paying you - the dialog that comes up simply says, 'xyz paid you' with an amount of Linden dollars and an 'OK' button. There is no way to stop someone from paying you, even if you are offline. In the case of someone paying someone else money fraudulently obtained, I think of it as a bee sting attack - the bee dies, but it sure leaves a welt. People expect Linden Lab to assure all the money in Second Life is not fraudulently obtained; that is almost implicit. To be banned without warning and stuck with a debt when you had no choice in accepting the money seems... wrong in an ethical and perhaps even a legal sense. It is clearly not anyone's fault if they receive Linden dollars; they can't avoid it!

So I asked Chmarr what happened to the people who collected money from the 'sploder - and he said that their accounts were rolled back 4 hours. It certainly seems odd that Chmarr didn't simply have his account rolled back in the same way. He claims 2.2 million Linden dollars were deducted from his account balance for this situation, and he's been tasked with a negative balance since January.

A Long Time With No Solution

Chmarr says he has about $1,000 US in his account which he cannot touch; he cannot cash it out. It is locked. Perhaps Linden Lab is waiting for him to cash it in to his negative balance. Since January, he has gotten the 'debt' down to 1,513,220 Linden dollars. He claims that if they ever straighten out his account, he should have over 600,000 Linden dollars in it.

Email exchanges with Linden Lab were pasted into a notecard (complete with MIME information), and it didn't seem like Linden Lab saw this as anything but his fault. This doesn't seem right, especially since they allowed him back into Second Life. In colorful terms, he said that a lot of people from Europe seem to be getting the cold shoulder from Linden Lab about things - an opinion, of course, but he stands by being told to 'f*ck off' on the phone by a Linden Lab employee.

Clearly, something is wrong here, enough so for Chmarr to paint a target on himself and dance in front of everyone in the comments on the Linden Lab weblog. Because of the nature of this sort of incident, there is no one who can say that this is exactly what happened besides Linden Lab - and apparently they haven't been going out of the way to deny it.

The party line of Linden Lab on this seems to be that 'if you receive money we believe is fraudulent, you must pay it back plus up to 50%'. With no way to stop payments from happening, this can happen to just about anyone. Another blow to the credibility of the Linden economy while demonstrating that Linden Lab takes the Linden dollar so seriously that it penalizes victims.

'Is that legal', the author asks curiously... Any other horror stories like this out there?

And now you can chat about bad policies in voice!

For the unindoctrinated, a 'sploder is/was an object that was set out at clubs and other places; people paid into a pot and the pot was distributed randomly to those who paid in. This piece of SecondLife culture cannot be legitimately found within SecondLife at this time due to the gambling ban being in effect.
² Quoting him. I don't know exactly how many people that is. The lowest number would probably be 4 out of 5.
³ This is not the first time I heard of this; I came across it when I was looking into the demise of the Touchet Group and later regarding people purchasing Linden dollars on eBay and being banned.