No protection from fraud in virtual worlds

Research conducted by the Fraud Advisory Panel, a charity set up by the Institute of Chartered Accountants, claims to show that the popular online worlds such as Second Life are unprotected against the problem of financial fraud.

The problem is potentially so bad, the charity says, that the British government should ensure that funds exchange in these new environments are protected by existing anti-fraud laws and regulations.

Fraud is only one aspect of the equation, of course, as there are also issues with money laundering and other forms of crime.

Steven Philippsohn, chair of the panel's cybercrime working group, said that the key to successful crime prevention in what is an evolving area is the extension of existing legislation.

The Fraud Advisory Panel claims to have highlighted a series of problems arising in virtual communities, including credit card fraud against genuine customers and suppliers; hacking into databases and ID theft; money laundering via false online identities; tax evasion; unregulated cross-border money movements and sales of age-restricted goods and services to children.

And that's just for starters...