Kabam warns of virtual currency fraudsters in its Hobbit mobile game

[Updated with Kabam’s comments]

Kabam warned players of its Hobbit mobile game that they should beware of scammers selling “cheap Mithril” on third-party web sites. The scam tries to trick players into buying cheap virtual currency that they can spend inside The Hobbit: Kingdoms of Middle-earth.

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Since the free-to-play game company makes its revenues through sales of virtual goods, protecting the players and their currency transactions is critical.

In a message to all players of The Hobbit: Kingdoms of Middle-earth (and apparently others, too), Kabam said, “We have seen a surge of activity from fraudulent third-party sites that are not affiliated with Kabam, claiming to sell cheap Mithril for various Kabam games.”

The message said, “The use of these sites may compromise your game and payment information. These web sites use stolen credit card information to make the Mithril purchases that you would receive. This opens you to potential fraudulent activity in the future. Don’t let the fraudsters get your personal data or credit card information. Do not give anyone your account information, personal information or payment information.”

Kabam warned players that they could be liable for charges of collusion to defraud the victims of the stolen credit cards. The company said it is working on ways to prevent and track the purchases and blocking the transactions.

Steve Swasey, spokesman for Kabam, said the company is being proactive with its players to warn them of the fraud. He noted that the sites take revenue away from Kabam, but they also put the players at risk for future fraud against their credit cards and Kabam accounts.

“We are making every effort we can to protect our players,” Swasey said.

Swasey said that similar fraudulent sales of “gems” virtual currency are also happening in Kabam’s Kingdoms of Camelot: Battle for the North. He said that the fraudsters are targeting other mobile game companies such as Gree and DeNA as well. For now, however, Kabam is focused on dealing with fraud in The Hobbit.

Swasey said that the following web sites are selling Mithril without Kabam’s approval:

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