Australian families are being hit with hundreds – sometimes thousands – of dollars in losses as online scammers prey on children through Roblox, luring them with fake offers of free in-game currency.

A lawsuit filed in the District of Nebraska is accusing the Roblox Corporation of nurturing an environment in which child predators thrive.

A backbencher has urged the government not to ban the online game Roblox, saying it would be a “disproportionate measure”.