Can we trust SL banks? PLEASE READ IT

"Banks" in SL are completely unregulated, uninsured, and there is no enforcement in the event of unfair practices or rip-offs.

No, they can not be trusted. Period.

Shocking though it may seem, there are folks who don't read this forum. Some may have never even heard of Ginko. Sure, we're all wise now because--with benefit of hindsight--we'd never risk our L$s with a "bank."

It just is NOT the depositor who should get blamed for this crap when it happens. Right, they shoulda known better, but they aren't the ones running off with other people's money. It's like blaming the old lady who gets mugged: "Sucks to be old and weak, Granny, but it's just how we run our world here." Gosh, thanks.

I think that LL really needs to step in and ban people who pretend to be anything similar to a financial institution; banks, stock-exchanges etc. Either that or extend identity verification to allow you to verify your status as a real-life business, then requiring that any institution with a significantly large turnover or which mimics a financial institution be verified and registered as a business so that it can be held fully accountable for illegal business activities for the country they reside in.

I'm sorry, Gadosilver - I can't seem to read beyond the thread title without shouting "no!!"

I like that idea!

Print the bonds on paper
... and it reduces the value of the paper.

Banks in SL are the closest thing you can get to gambing these days, if you like a gamble, invest in a bank.

Banks are unregulated, you have no protection, if it goes tits up, you lose. Should LL intervene? Absolutely, they should shut down banks or insist that some sort of insurance policy is in place for banks to operate here. Whether they like it or not, it's LL's world and as we've seen in the past when certain stories have surfaced in the media, they will act when they believe it's their name being dragged through the mud.

I read in another business/bank blog that similar thing happen to a bank and they lost close over few thousand due to hacking one of the ATMs.
How it was resolved was SL did get involved and helped the bank.
Sadly they won't help the residents and clients of any bank hurt in scammy ginko like situation.

Granny can't help but be old and weak. I'll happily run to her defense. Yet the stupid can only learn by their mistakes. We should leave them to learn and to eventually become wise and cynical like Granny.

Absolutely. 170%.

I am in total agreement, investing in SL banks..or anything like it is stupid and ignorant, but...I dunno..guess it just sucks. I know they aren't our parents, but as I said once before, on such a large scale, it's scary to see absolutely nothing be done...
I never got involved in any of these kinds of discussions because I really don't like to argue. I'm just giving my opinion that if it's on a huge scale, it seems to me like something should be done. However, I don't have any suggestions on that level either, it's just a bad situation that no one should be ignorant enough to get involved in.

I remember coming across some bank or another when I was new, and it gave me pause to think for a few moments about it. Why would I need or want to put my L$ into a bank? At the time I didn't even know that banks were really just other avatars playing RP of being a banker. My thoughts were along these lines:

Put money in a bank for convenience? In RL it might be cumbersome carrying your life savings around in your purse or pocket but in SL the L$'s don't weigh anything or take up space. Further, it's more convenient (instant access) to keep them in your own account rather than go through some bank where you have to waste time doing a withdrawal if you need the money back.

Put money in a bank for security? In RL the banks are federally insured, and your money is safer than it would be in your pocket, matress or closet. In SL on the other hand, nobody can jab a pointed prim in your back and demand you fork over the loot. With the built-in transaction history and mechanisms for exchanging money, it's safer in your Avatar account.

That's as far as I got -- I never even thought about the greed factor, i.e. banks promising impossible interest rates. The convenience and security alone convinced me that there was no logical reason for banks to exist in SL.

A year later, having learned so much more, I'm very happy I avoided that mess when I was new. Personally I wouldn't be the least bit unhappy if tomorrow morning (or realistically, Friday night at 9pm) there was a blog announcement that all L$ banks were banned outright effective immediately. IMHO it's nothing more than a slow motion form of gambling -- they've just made it less exciting so as to bypass the gambling ban.

-Atashi

Hey, who wants to start a bank with me? I need someone who can script an atm that will be hacked in the future. Risks? None! Let's go...!

Of course it reduces the value of the paper!

After printing out the ginko bond on it, you can't use the paper for any useful printing anymore

I thought up a brilliant new banking system a few months back but everyone thought I was kidding around so I never went ahead with it. It was the Second Life Ontario Trust System. The way it worked was you deposited into an ATM, which would accept deposits in L$10 increments up to a maximum deposit of L$500 at a time. You then pulled the 'invest' lever, and your funds were transmitted outworld to a secret investment system that I can't disclose, where you had a potential for a very large and near instant profit. However, the secret investments were high risk. It sort of boiled out to investors having about a 1 in 10 chance of doubling their capitol. Anyhow, after you pulled the 'invest' lever, it would take about 10 or 15 seconds for the funds to get invested and the return to be calculated. Then the ATM would tell you right off, if your investment prooved to be successful.

I feel it had a strong advantage over the more traditional SL bank model, in that with my system you never actually left money on-deposit for more than 10 or 15 seconds. If your investment was a flop you found out on the spot, but if your investment proved to be successful you received your capitol plus interest immediately.

I still have all my notes, and I'm a pretty good scripter, so if anyone wants to partner up on this new banking/investment system just let me know. We can change the name if necessary, it's kind of a kludge based on my home province.

-Atashi

I think LL may decide that counts as gambling though =(

I would contend that it's no different than any other inworld investment system, I've merely sped up the process. In addition, I simply cannot divulge my realworld investment mechanisms...I'd tell you why not, but even the reason is a secret. Trust the black box, put your money in the black box...

-Atashi

I don’t see anything wrong with running a virtual bank or stock exchange, but I do laugh at the many people who invest in the ones that don’t tell you anything about who they are in real life. I mean really, the owner could be a 12 year old living in his mom’s basement.

I do invest in some SL financial operations, but for me to open an account they MUST tell me everything about their real life identities and how I can contact them in real life. One “bank” named SL Bank tells who they are in real life, their address, emails, education; they have real world photos on their web site and meet people in real life, if you want. I even know a few people who met the owner and the creator at the Virtual Worlds Convention in New York. They offer lower rates than most, but their business model is straightforward and because I know who they are in real life, I’m not worried about them running off with my money. They are also the oldest financial firm in SL.

Bottom line: I don’t see any harm in investing in SL finance, BUT if you do invest, you should look beyond the rates. Any dumdum can set up a “bank” front and say “We pay 150% per annum!!!!”, but not just anyone will tell you everything about themselves in real life or what they do. If they (anyone involved in taking deposits) are not willing to tell you who they are in real life (accountability) and confirm it, they probably have something to hide. (Run off with funds. 12 year old in mom’s basement. No idea what they are doing)

I think a better analogy is pointing out that it's an individual's responsibility to deal with the repercussions of walking out in front of a speeding bus. Perhaps I should go check out the local bus routes to warn them, as there may be some folks who do not read this forum.

I remember when it used to be 40 year olds that lived in Mom's basements. Sheesh, they sure start young these days!

There was a feature on the news this morning warning people to lock their windows when they leave the house. It's an obvious thing to point out, but people obviously don't always lock their windows. The same as Police put up signs warning people of car theft in certain areas, it's all common sense, but warnings are issued.

Gosh, I know there are hostile neighborhoods, but I didn't know it had gotten to the point where the buses were scheming up ways to run folks over, and disguising themselves as rose gardens.

No they're not at all! Buses will always be there, and so unfortunately we have the heavy burden of being aware that stepping in front of one is probably not very wise. Still, I'll start putting together an ad campaign anyway, as there are those that don't read the forums. I think I might run a parallel campaign about the dangers of sticking a fork in your eye, too.

I'm sorry, but this is symptomatic of the way we don't expect people to be responsible for their own actions.

"Do not put this metal ladder against a power cable"
"Do not throw yourself off the edge of this cliff - it will kill you"

If a guy walks up to you in the street and hands you an official-looking business card and says he represents a bank and would you give him $100 for him to invest and he will pay you back $200 in a week, would you do that?

I would hope nobody answered yes to that. What you do is you go and do some research on this person to find out if they really are who they say they are, whether the company is reputable and analyze what your risk is. Why should SL be any different to that?

That having been said, the scam artists should be made VERY unwelcome in SL and RL - it IS theft and they should be punished. But the best way is for people to think before they invest in something like this.

"Do Not Iron Clothes While Wearing."

Qie, don't mistake my comments as indicating I have any less disdain than you for these predators that take advantage of others, but we do also have to take some responsibility for our own actions. I would like to see these people taken to task, too. But, I would rather LL's resources be used in areas other than those that result from people's greed. We all (well most of us) pay for the resources LL have, and I am not too keen to see my money being spent on chasing up something that is essentially a result of someone else's greed - residents see a big fat interest rate, and they jump straight in. That's up to them, that's a risk they are willing to take with an eye on making some L$, but why should the rest of us pay when that risk doesn't pay off?

Ciaran: I take your point, and education is no bad thing. Beyond that, well see above.