Change to the ban system.

[Penthea]

I think the problem here is that there's no way of telling apart those who are improving, and those who simply didn't get caught. Oftentimes the difference between a ban and not-a-ban is someone bothering to file a report, and making it a proper one. So during that year, our offender could've still kept at it, but somehow got lucky enough and wasn't reported. A lot of stories end up in the DF thread instead of the GM's inbox, for instance, a lot of people aren't sure if it's reportable or are lied to, don't know how to file a report, etc.

While this is true, it's actually not unheard of for people to have made successful appeals for bans and strikes based on long periods of good behaviour, or so much time has passed that it can be argued that the individual has since grown up.

Successful mmos stick around for a very long time. Already a lot of people who were teenagers when they started playing FFXIV are adults now. Kids do stupid things, but kids also grow up. If an adult wants to be a paying customer again SE are better off giving them the benefit of the doubt and taking their money, rather than assume people can't change or mature.

As for people on their last legs on their account wanting to get strikes removed, while a long period of time with good behaviour could actually be simply not getting reported, again it's in SE's interest to take their money if they feel a sufficient amount of trouble-free time has passed.

That being said I would assume the accounts in both cases would be flagged internally in case the person is repeatedly reported again.

Of course all this also heavily weighs on WHY a person is reported. If it's because they're very rude well that's not a very serious offence in the grand scheme of things. But if the reports were relating to things such as inappropriate behaviour towards a minor well then they're never getting their account back.