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Freezing is a ridiculous idea in my opinion. Since frozen accounts are rarely if ever returned, they might as well use the word "banned" so as not to disillusion people. I recommend temporary account bans (the length of the ban depending upon the offense), or in more severe cases, permanent IP or even local-area ISP bans in worst-case scenarios. Freezing permently means an equal, although unjust punishment for ALL offenders, and in many cases these offenders don't know what they've done (When I was first frozen, I didn't know what I had done; I later learned that it was an attempt to sell my account for desperately-needed cash that they froze me for, though at the time it was one of those rules that was in the fine print.) or have done such minor offenses that a week's ban would be sufficient. GameFAQs.com has a feature called "meta-moderating" that allows users to make decisions on how severe a given punishment is for an offense, and based on peoples' responses, the administrator would make the punishment more or less severe. Here, you're either frozen or you're not, and so there are no gradations in severity to fit the crimes, if you will. Therefore, perfectly innocent Neopians are subject to spontaneous, permanent, irreversible freezings for offenses which they have never partaken in with no reassurance that they will be given their frozen accounts back, and now we are left with the past, present, and what seems to be the future of the site's (in)justice system. Granted, I like many aspects of the site, but having been frozen for a crime I hadn't known I had commited makes me empathize with the others here who have been frozen unjustly (and they didn't even do anything that broke any single rule in the ToS.).
I myslef think Neopets.com is great fun, but there are certain aspects of the game I dislike very much. One of these is 'freezing'. If customer support was better, I would have nothing to complain about. But since Customer Support is so crap, I belive that they should either replace freezing with some other form of punishment (other than completely banning accounts), or hire more support staff.
The whole GameFAQs system of punishment is okay, but would not be very well suited for Neopets. Neopets has more accounts than GameFAQS. A lot more. It'd be pretty hard to implement that system.