2:58pm Wednesday 13th June 2007
Legal loopholes are exposing web-based virtual communities to a growing risk of theft and deception according to independent watchdog the Fraud Advisory Panel.
"Such communities are not just chat rooms, they are also lucrative and growing marketplaces," said chairman of the panel's cybercrime working group, Steven Philippsohn.
"Members use these interactive sites to buy and sell tangible goods and services such as land and property, clothing, music and bookmaking.
"But there's nothing virtual about online crime, it's all too real. It is time Government took this seriously."
Online virtual communities are a combination of internet chat room, 3D games and next generation internet environment in which residents can choose what they look like and what they do, with goods and services traded using virtual money.
The panel argues that the UK Government must ensure that funds exchanged in this way count as genuine financial instruments covered by existing laws and regulations.
"That's the key to successful crime prevention in this evolving area," said Mr Philippsohn.
The Fraud Advisory Panel highlights several problems arising with virtual communities: o Credit card fraud against genuine customers and suppliers o Hacking into databases and identity theft o New opportunities for money laundering via false online identities o Tax evasion and unregulated cross-border money movements o Sales of age-restricted goods and services to minors.
Mr Philippsohn added: "The legitimate benefits of virtual communities will prove enormous but people need to be aware that this cutting edge technology has a darker side."
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