Although Second Life's client and server incorporate Digital Rights Management technology, the visual data of an object must ultimately be sent to the client in order for it to be drawn; thus unofficial third-party clients can bypass them. One such program, CopyBot, was developed in 2006 as a debugging tool to enable objects to be backed up, but was immediately hijacked for use in copying objects; additionally, programs that generally attack client-side processing of data, such as GLIntercept, can copy certain pieces of data. Such use is prohibited under the Second Life TOS  and may be prosecuted under the DMCA.

However, Linden Lab may ban a user who is observed using CopyBot or a similar client, but they will not ban a user simply for uploading or even selling copied content; in this case, Linden Lab's enforcement of intellectual property law is limited to that required by the "safe harbor" provisions of the Digital Millennium Copyright Act, which requires filing a real-life lawsuit. Although a few high-profile businesses in Second Life have filed such lawsuits, the majority of businesses in Second Life do not make enough money for a lawsuit to be worthwhile, or due to real-life work commitments cannot devote enough time to complete one; thus, they are effectively unprotected.

There have also been issues with the use of false DMCA takedown notices. Once a DMCA takedown notice is served, reversing it requires an individual to expose their personal information to the filer (filing a notice does not require this); for the penalty of perjury to be enacted, a lawsuit is required. In addition, the technical process of removal and re-instatement of content on Second Life is subject to failure which can result in content becoming unusable to its owner. This does not effectively prevent content theft; a thief who is subject to a DMCA takedown notice will not challenge it, but will simply create a new account and re-upload the content, often releasing it with all permissions available to maximize propagation "in revenge".

Most users in the world as paying, private individuals are, likewise, effectively unprotected. Common forms of fraud taking place in-world include bogus investment and pyramid schemes, fake or hacked vendors, and failure to honor land rental agreements. Some residents have claimed that there is also a high incidence of sales of content to users unaware of its value (for example, weapons which would require the buyer to own a private island, as firing them in any other area would violate the terms of service; or avatars which appear to represent advanced roles but which, in reality, are nothing more than party costumes due to the inability to support those roles in a world with free social behaviour).