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Your kids may be treating video games like banks and playing with real money. The government has questions

The federal agency announced it is monitoring video games that include in-app purchases, digital currency, and external marketplaces commonly used by children.

According to , games that include these features effectively function as a type of bank, but are not subject to the same types of regulation or protection. Consumer Financial Protection Bureau Report It was released last week. The agency also questioned whether children and parents were aware of the vast amount of data gaming companies collect.

“In recent years, the most popular video games have included immersive virtual worlds that provide storage and exchange of valuable assets,” the CFPB wrote. “Game companies have created digital marketplaces that facilitate the buying, selling, and trading of these assets with limited consumer protection. Harmful practices are occurring.”

Video games like the blockbuster Fortnite have long allowed users to make microtransactions, small optional fees that players can pay to obtain items or other features. Users often have to purchase in-game currency with real dollars, similar to tokens purchased at brick-and-mortar stores such as Dave & Buster’s or Chuck E. Cheese.

CFPD reported that video games like Fortnite can be an introduction to banking for children. (Nielson Barnard/Getty Images)

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The CFPB warned that digital currencies, purchased goods and other assets can reach “substantial value” when converted into real money. However, regulations aimed at protecting asset owners are not applied to these closed markets.

“Banking and payment services that facilitate the storage and exchange of valuable assets generally provide consumer protections, including remedies after fraudulent transactions,” the CFPB said in its report. “However, game and virtual world operators typically emphasize a ‘buyer beware’ approach.”

The agency was particularly concerned about children who may take advantage of these markets without their parents’ knowledge.

“For many young people today, gaming may serve as an introduction to financial activities,” the CFPB writes. “For example, games offer young people the opportunity to learn about earning currency, managing assets and shopping.”

Lego Fortnite website displayed behind video game logo

The CFPB report warned that video games with features such as in-app purchases and digital currencies function like banks but are not subject to the same regulations. (Jakub Porzycki/NurPhoto via Getty Images)

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“Game companies may view young players as an opportunity to create lifelong consumers early,” the report continued.

Since players can accumulate assets worth considerable real money in these video games, gamers can face significant financial losses if their accounts are hacked or fall prey to scammers .

According to the CFPB, these risks are increasing as the value of gaming assets increases. However, players may have limited recourse as traditional banking and payment system protections do not apply.

“In a complaint to the government, [Federal Trade Commission] The CFPB and CFPB said several players reported hacking attempts, account theft, fraud, unauthorized transactions, and loss of access to game currency and virtual items, but there were limited remedies from gaming companies, the agency said. is writing. Players can avoid these scams and phishing attempts. ”

A child plays the video game

The CFPB warned that many video games collect large amounts of data, but parents of young players may not be aware of this fact. (Fraser Harrison/Getty Images)

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Meanwhile, the CFPB report says publishers can also collect important information about users, including location data, social media data, and behavioral interactions “such as how players respond to personalized incentives.”

“Gamers are at risk of harm when their data is sold, bought, or traded between companies, including for purposes other than gameplay,” the report continued. “Furthermore, the vast accumulation of data that gaming companies collect from consumers means that consumers, especially young people and their parents, are wondering how their data is being collected and whether privacy regulations are being followed. It raises the question of whether we are fully aware of how it is being used in the industry.”

In the end, the CFPB did not indicate it was taking action against the video game industry, instead saying it was “monitoring” the situation.

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