Fraudsters Like Virtual Goods

Published on July 21, 2010
by Ben Worthen

Sales of digital goods such as virtual objects and currency used in online games are taking off with consumers. Unfortunately for their vendors, they are increasingly popular with cyber criminals, too.

Merchants that sell digital goods lost 1.9 percent of all revenue to fraud in 2009, compared with a 1.1 percent fraud rate for companies that sell physical goods online, according to CyberSource Corp., which processes credit cards for online merchants.

Such percentages seem small, but can translate into sizeable sums of money as social networks like Facebook Inc. expand the market for virtual goods, which have long been associated with games like Second Life and World of Warcraft, where players buy items like virtual gold and clothes for avatars.

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