One could put one's money into a high-interest account, or give it to some sort of more risky investment firm to handle (there seem to be an increasing number, at least in this country, willing to deal with relatively small initial funds, but they are of course all regulated in some way). One could put it into the stock market oneself if one was so inclined.

I don't really think that the lack of options is what is motivating people to place money with these folk, and then defend them until the boat has well and truly sailed (and sometimes even after that). I am not sure quite _what_ it is to be honest, but I'm sure that there are plenty of studies about investment scams over the centuries; they don't seem to be becoming less popular.

The only thing that I might be able to add to those is to speculate what about SL might contribute. A factor may be that people are not infrequently attracted by promises of big money (not entirely unrelated to LL press) and at least, by the idea that it is a "money game". They enter and see the banks and think "oh yes, this is part of the game". They are used to banking regulations without even thinking about them, and assume that nobody would be allowed to get away with making promises they can't keep and then defaulting. Surely not! They're in the game, they must be part of the game! Just like new residents often assume that people with a tag saying "Police" _are_ actually some sort of SL police force.