CFPB Report Identifies Financial and Privacy Risks to Consumers in Video Game Marketplaces

WASHINGTON, DC – Today, the Consumer Financial Protection Bureau (CFPB) issued a report examining the growth of financial transactions in online video games and virtual worlds. These platforms increasingly resemble traditional banking and payment systems that facilitate the storage and exchange of billions of dollars of assets, including virtual currencies. However, consumers report being harmed by scams or theft on gaming platforms and not receiving the protection they would expect under federal law. The CFPB will monitor marketplaces where financial products and services are offered, including video games and virtual worlds, to ensure compliance with federal consumer financial protection laws.

“Americans of all ages are converting billions of dollars into currencies used on virtual reality and gaming platforms,” ​​said CFPB Director Rohit Chopra. “As more banking and payment activities take place in video games and virtual worlds, the CFPB is looking at ways to protect consumers from fraud and scams.”

The report, Banking in Video Games and Virtual Worlds, looks at the growing use and scope of these assets across the gaming industry, the associated risks for consumers, and the evolution of games and virtual worlds into online marketplaces. U.S. consumers spent nearly $57 billion on games in 2023, including hardware, software, and in-game transactions such as converting dollars to virtual currencies or other game assets. These assets are often bought, sold or traded in virtual markets that allow gaming companies to replicate everyday activities online, including financial payments.

The report identifies a number of trends and risks associated with gaming assets, including:

Gambling products and services resemble conventional financial products: Games and virtual worlds allow players to store and transfer valuable assets, including in-game currency 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 allows 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. Game companies offer little customer support when consumers experience financial harm: The increased value of in-game assets has fueled an increase in scams, phishing attempts and account theft. Attackers use phishing tactics or compromised user credentials to break into accounts and gain access to game currency or virtual items, then sell these assets off-platform for other currencies. Consumers report having little recourse with game companies when they suffer losses, and game publishers claim they have no obligation to compensate players for financial losses, including when service to a game is suspended or a consumer’s account is closed become personal and behavioral data: Publishers collect large amounts of data about players, including behavioral details such as financial data, purchase history and spending thresholds. Gambling 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 collected by headsets may include biometric data such as iris scans, eye movements, 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 that they receive limited support from the gambling companies, such as refunds or security improvements. Existing consumer protection laws apply to banking and payment systems that facilitate the storage and exchange of valuable assets. The CFPB monitors markets where financial products and services may be offered, including video games and virtual worlds.

Read the report, Banking in Video Games and Virtual Worlds.

Read director Chopra’s statement on the report.

Consumers can file complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees of companies who believe their company has violated federal consumer financial laws are encouraged to send information about what they know to [email protected].

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces federal consumer financial law and ensures that markets for consumer financial products are fair, transparent and competitive. For more information, visit www.consumerfinance.gov.