The Consumer Financial Protection Bureau (CFPB) says the increase in financial transactions in the gaming world is putting users’ information at risk. The agency claims that gaming platforms are not benefitting from the protections of federal law.
The CFPB states that it has received consumer complaints about hacking attempts, account theft, and lost assets.
The CFPB stated that it will be monitoring these markets, which include video games and virtual worlds.
The CFPBs report, entitled Banking in Video Games and Virtual Worlds, looks at the use of financial services across the gaming industry, and potential risks. The agency reports that consumers spent nearly $57 billion on gaming in 2023, including converting dollars to virtual currencies or other gaming assets.
CFPB Director Rohit Chopra says Americans of all ages are converting dollars into currencies used on gaming platforms.
“As more banking and payments activity takes place in video games and virtual worlds, the CFPB is looking at ways to protect consumers from fraud and scams.”
The report states:
- Gaming products and services resemble conventional financial products: Games and virtual worlds enable players to store and transfer valuable assets, including in-game currencies and virtual items such as cosmetic skins or collectibles. For example, the largest reported sale of a cosmetic skin was for $500,000. Games and virtual worlds act as a real-world marketplace that enables players to store and transfer valuable assets. To leverage that value, gaming companies have begun incorporating financial products and services such as proprietary payment processors and money transmitters.
- Gaming companies provide little customer support when consumers experience financial harm: The increased value of in-game assets has fueled a rise in scams, phishing attempts, and account thefts. Attackers use phishing tactics or compromised user credentials to break into accounts and access game currency or virtual items, and then sell these assets off the platform for other currency. Consumers report having little recourse with gaming companies when they suffer losses, and game publishers claim to have no obligation to compensate the players for financial losses, including when service to a game is suspended or a consumer’s account is closed.
- Gaming companies are assembling gamers’ personal and behavioral data: Publishers are collecting large amounts of data on players, including behavioral details such as financial data, purchasing history and spending thresholds. Gaming platforms can also track players’ location data, which can generate an accurate portrait of a player’s daily routines, such as their home address, places of employment or worship, and health and medical status. And with the advent of virtual- and mixed-reality gaming, the information gathered by headsets may include biometric data such as iris scans, eye movement, pupil response, and gait analysis, which may pose medical privacy risks.
The CFPB has received consumer complaints about hacking attempts, account theft, and lost access to gaming assets. In the complaints, most consumers report receiving limited support from the gaming companies, such as reimbursements or security improvements. Existing consumer protection laws apply to banking and payment systems that facilitate the storage and exchange of valuable assets. The CFPB is monitoring markets where financial products and services may be offered, including video games and virtual worlds.
