In a previous post I discussed virtual currency, which is used to purchase virtual goods within a variety of online communities, including social networking websites, virtual worlds, and online gaming sites. These virtual dollars and virtual goods have real value.

Virtual currency includes the points customers receive from retailers, merchants, airlines, hotels, and credit card companies through loyalty reward programs. These reward points are supposedly the second most traded currency on the planet.

Gizmodo reports that hackers have targeted Microsoft points, the currency used to purchase digital goods and gift cards for the Xbox and Zune. Someone cracked the algorithm Microsoft uses to generate codes for those gift cards, and released that information online. A website was used to generate more than a million Microsoft points worth of free gift cards, as well as other Xbox items, before Microsoft was able to shut it down.

In 2009, Facebook created a virtual currency called Credits, which users spend on games and other Facebook content. Facebook has worked with fraud fighters to test and structure this currency so as to avoid attracting criminals, but as with any virtual currency, criminal activity is inevitable.

Hackers even steal carbon credits. European carbon traders were fooled by a phishing email, which allowed hackers to access the victims’ online accounts and then transfer more than $50 million in carbon credits into their own accounts. Of course, the hackers promptly resold those credits for profit.

Virtual thieves can sell stolen points in online forums or on eBay, or they can try to exchange points for rewards. However, most online retailers, social media, and gaming websites recognize the thieves’ behavior patterns when cashing in stolen points. By analyzing the history of the device being used to access a website, the website’s operator can prevent fraudulent transactions.

iovation’s ReputationManager 360 is getting a lot of attention for preventing chargebacks, virtual asset theft, gold farming, code hacking and account takeovers. The service identifies devices and shares their reputation including alerting businesses to real-time risk. Online businesses use device reputation to prevent fraud and abuse by analyzing the computers, smartphones, and tablets being used to access their websites.

Robert Siciliano, personal security and identity theft expert contributor to iovation, discusses scammers and thieves on The Big Idea with Donnie Deutsch. (Disclosures)

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