Wanton and Willful Fraud by Linden Lab

July 13, 2013 by
Filed under: Linden Lab and Second Life, SL Marketplace 

I have been silent for several months now. During my silence I have been working on a post that would be my “welcome back” contribution. That post was to have given a few kudos to the development team that oversees the Second Life Marketplace. Alas, that post will never see the light of day now. It will remain forever a grand ideal that has been buried because of behavior by the same development team … behavior that goes beyond the merely incompetent and strides firmly into the realm of legally actionable fraud. Fraud that is not just annoying but deals with amounts of money that go well into the felony level of damages.

First, Some Background

Over the past few months, the Marketplace Development Team at Linden Lab has busied itself by cleaning up some of the loose threads they’ve left dangling. For example, when they first rolled out Direct Delivery, the resulting level of use at the Marketplace caused a long-hidden bug to rear its ugly head. That bug left scads of listings corrupted by saddling them with inappropriate images, inaccurate descriptions or otherwise bogus data. Not too long ago, the Marketplace Dev Team announced that they had rolled out a fix and were repairing the last of the cross-linked listings.

They also finally pulled the plug on Magic Boxes … almost. The one “gotcha” that they haven’t yet figured out how to handle is the issue of limited quantity items. For those Merchants selling limited quantity items, they must still use the Magic Box. But everyone else, and that’s pretty much the mass majority of Merchants selling on the Marketplace, we all have to use Direct Delivery. And honestly, that’s a good thing. Direct Delivery is proving to be a reliable and dependable system.

The Payment Method Fiasco

After plucking off that hanging fruit, the Marketplace Dev Team undertook yet another task that they felt needed addressing. That issue had to do with how purchases are paid for when checking out at the Marketplace. The original method provided by the Marketplace in its initial incarnation was either using the Customer’s Linden Dollar account balance or using a PayPal payment portal. Considering that Second Life serves customers from all around the globe, providing only these two payment methods was extremely limiting to anyone not living in the USA. So they decided to hook the Marketplace payment process into the same mechanism that the main Second Life web site uses for all other customer purchases. Really, that’s an excellent goal and one that should have been done early on, not waited until now. But it’s also where the real issue has come to light.

Making Payment to Merchants

When a Customer makes a purchase on the Marketplace, the total amount they pay is subtracted from whatever payment method(s) they select. Any conversions are performed in order to arrive at an internal Linden Dollar (L$) amount, Marketplace commissions are subtracted … and then the Merchants from whom items were purchased are paid for those items. Except the Merchants aren’t getting paid.

Say What?!?

You heard me right, from time to time the Merchants are not receiving the money collected by the Marketplace for the items delivered to the Customer. Never mind that it’s a basic function of the Second Life Platform. Never mind that every third-party and internal sales website has performed without fail. Never mind that it’s an absolute rock-solid guaranteed to work facility. The new changes in the Marketplace have caused it to suddenly stop making some payments to Merchants.

Not only does it not make payments, it doesn’t record the purchases either. It flat fails to document the transaction completely! Of course it succeeds without any problem in deducting the money from the Customer’s account, and it succeeds in crediting its own commission account properly. It just fails to pay the Merchants from whom products have been purchased.

A Pattern of Failure

From the very beginning of the Marketplace, there has been a continual pattern of failures that always, without exception, results in taking money from the Merchants. Not Linden Dollar tokens, but real live hard currency cash money. It would be somewhat understandable if it happened once, or maybe twice. But that’s not what has transpired. No, instead we have a continual and predictable pattern of failures that always and without fail results in money being taken from Merchants. And now, they’ve done it again.

But this time it’s different. It’s different because they’ve betrayed their technique. This time they’ve made it plain that they are willfully and wantonly defrauding the Merchants. Why can I say that? Simple .. because their own process has betrayed them.

When they deduct the money in whatever payment method selected from the Customer’s account, a transaction is automatically recorded in their Main SL Transaction History. When they take their commission out, that transaction is automatically recorded in the Marketplace’s Transaction History. But then they purposely drop the transaction, block it intentionally, and prevent it from completing by paying the Merchant.

There is just no reasonable or even defensible method of programming the Purchase / Commission / Payment transaction so that it can be dropped just before the final stage. Those are three steps in a process that must always be completed without failure. And yet somehow they have managed to find a way to disrupt the process. And then say nothing about the cause, only that they have a partial fix and will begin repaying Merchants “Real Soon Now”.

Closing Thoughts

It’s time for Merchants to band together and take legal action against Linden Lab. It’s well past time for the Lab to be held accountable for their intentional and willful disregard for their fiduciary responsibilities. It’s high time for them to pay the piper and be held accountable … because THIS time, they have obviously and purposely taken steps to screw their customers … and the proof is in their own code.

Visit the DGP4SL Store on SL Marketplace


One Comment on Wanton and Willful Fraud by Linden Lab

  1. Levio Serenity on Mon, 15th Jul 2013 4:03 PM
  2. A bug of this magnitude should have a) never gone live and b) been rolled back the second it was discovered. Their cavalier attitude and handling of this issue is just inexcusable.