Massively

More than just the fraudulent funds are recouped. Actually 150% of the amount is deducted from your account (as of the last publically posted information), even if that leaves you in the negatives and owing Linden Lab. Your account is generally suspended while Linden Lab follows money trails.

Being in receipt of fraudulent funds requires no action on your part. Someone can send you Linden Dollars that were purchased through (eg) a fake credit card number, and you cannot prevent it. Your account will likely be suspended, and you'll end up paying half again what you unknowingly received.

A malicious someone can easily eliminate hundreds or thousands of US Dollars from your Second Life account that way, and have your account suspended as gravy, simply by purchasing Linden Dollars with bogus payment methods, and sending you those funds. While objects and items sent to your account can be declined, money never can. It's something you cannot prevent.

Technically, the damage they could do to individuals and the economy seems to have no theoretical upper limit.

Which brings us to Linden Lab's final piece of advice:

"If you've been the victim of fraud, contact our fraud hotline at 800 860 6990. Then, talk about it. Post your experience to forums, blogs and chat. Tell others about who it was and how it happened."

Of course, that would not include the Second Life forums, where you can post your experience, but have to carefully avoid mentioning who it was, lest you violate the rules and have account sanctions enacted against you.

Quite a number of innocent people who've suffered this sort of thing have talked about their negative experiences with the actual Linden Lab policy both inworld and on blogs - indeed, I've yet to see one where someone utilized a third-party exchange and suffered for it. All the stories so far are from ordinary folk complaining of abrupt account suspensions and out-of-pocket losses because someone bought product in their stores with fraudulent funds, or gave them dubiously-sourced Linden Dollars.

If you've heard of an exchange that is dodgy, let us know. There's got to be at least one, right?

UPDATE: Linden Lab sent us an unsolicited statement on the matter - which appears to be wide of the mark. Read about it here.