The Alphaville Herald

Linden Lab Kicks Anshe in Arrears

by Alphaville Herald on 01/04/06 at 10:32 am

by Walker Spaight

If it’s an April Fool’s joke, it’s one that’s seriously ill-advised. What is no joke is the fact that Anshe Chung, Second Life’s most renowned land baron and one of Linden Lab’s biggest customers, was not present in the virtual world’s Find interface this morning, indicating the account has been suspended or banned. The Herald spoke with Anshe this morning, when she claimed LL had suspended her account for being in arrears, but without giving her the promised seven days to make good on her debts. If true, this is a serious oversight on the part of LL’s customer service staff or perhaps worse, affecting a business that pulls in more than US$100,000 a year and which LL has repeatedly held up as a shining example of how robust and successful its virtual world can be. (The Herald contacted Linden Lab for a response on the story, but given the early hour in California, none had yet arrived as we went to press.)

According to Anshe, several private island purchases and tier payments, combined with apparent billing problems between LL and PayPal, had put her in arrears to Linden Lab. Her arrears began on March 29, and peaked at almost US$20,000 the same day. Within 12 hours, through a series of payments, transfers between accounts and withdrawals of Linden dollars via the LindeX, Anshe had reduced the arrears to around US$5,000.

Residents who are in arrears on their accounts are normally given seven days to clear up the problem before a suspension sets in. Such was the case with Anshe — at least at first — who received an email, sent late on March 29, stating, “This email is notification that we were unable to bill your Second Life account on March 29, 2006. . . . Don’t worry; this billing failure will not prevent you from logging on with your Second Life account. We will simply try to bill your overdue balance again the next day. If we are unable to collect the amount due within seven (7) days, your account will be suspended pending payment for an additional thirty (30) days. During that time, you will not be able to log in to Second Life. Failure to resolve this billing issue by the end of the probation period may result in the cancellation of your account.”

The next day, however, Anshe was contacted by a Linden concierge, who warned her that LL’s billing department if she didn’t make good on the arrears immediately, her account would be suspended the same day. In response, Anshe asked Linden Lab to transfer the money from an alternate account. Instead, she found her account suspended when she woke up on April 1. Anshe provided screenshots and copies of emails to the Herald to help document her account of the events. At no time after the initial email quoted above, Anshe points out, did Linden Lab’s billing department contact her to make any further conditions known.

If the suspension was a mistake on the part of an over-zealous Linden Lab employee or volunteer, it raises questions about the company’s management practices. No matter how much business one is doing in Second Life, being given seven days to correct an arrears means you should get a week to do it, not a day. If the suspension was the result of LL policy, though, it raises questions about business conditions on the Grid. Anshe pays nearly US$30,000 to Linden Lab every month in tier payments. In the face of well over a quarter of a million dollars in annual income, US$5,000 sounds like not enough to get your knickers in a twist over. Anshe’s is also Linden Lab’s favorite example of what a successful virtual-world business can accomplish, and is trotted out almost every time an LL representative speaks in public. If the company was in fact unwilling to let a $5,000 debt from it biggest customer slide for the normally allotted time period, one has to wonder why.

Anshe, of course, has not always rolled exactly the way the Lindens would have liked. She has often used her high profile to make clear her dissatisfaction with things like point-to-point teleportation, for instance. A few days ago, she used the SL forums to toy with the idea of introducing her own virtual currency on the Grid. (More on that story later this morning.) She is also rumored to be one of LL’s most demanding customers, and is said to have refused delivery on auctions she has bid on, on occasion. Last week also saw her request the withdrawal of some US$50,000 from one of her accounts. That money is intended for transfer to a Chinese bank account, where Anshe has set up a company to handle much of her SL business. (More on Anshe’s outsourcing project in an upcoming Herald story as well.) While most of this request was fulfilled, one tranche of the request was actually cancelled by Linden Lab, Anshe says. This means that at the time of the suspension, Linden Lab actually owed Anshe money, not the other way around.

As Anshe points out, the suspension of her account means that her Dreamland business and other parts of her widespread operation are without a key officer, meaning that many important functions cannot be undertaken until the ban is lifted. More than 1,000 residents have space in Dreamland, and the company employs 14 people.

The Herald will bring you updates on this important story as they emerge.