For some context, due to the recent J's hammers I was able to hit a pen blackstar mainhand. My first pen piece ever on my account, and led me to grind for things like pen gloves and fallengod armor. After reaching negative karma for the first time, not knowing the concequences of this I decided that I would grind orcs. While I was peacefully grinding orcs when my wifi cut out for a short period of time when I reconected I was faced with a death screen which showed a downgraded gloves and worst of all my newly aquired pen blackstar turned tet. After going through the laborious back and forth with the support (not to mention the repeated ghosting ) they were firm on the stance that they were unable to do anything about my gear. 

tl;dr 
Negative karma has a chance to downgrade armor and I lost pen blackstar mainhand, grind safe when you have negative karma, support for the game makes me sad. 

Maybe next time don't flag on undergeared players & repeatedly kill them over and over?

having negative karma has negative effects

got it

From an outsider's point of view, it looks like a totally free, aggressive and heavily biased answer. XD

I didnt flag up first and he was grinding over me. If anything he was killing me more then I was killing him. After a little he logged onto another charater and completly destroid me xd.

You can make negative karma on equal geared chars, and even on some with more gear.

 You cant make negative if you dont flag. If they attack you, dont turn PvP mode nect ime.

BDO needs flag system to avoid caces like this.

You can even make negative karma on horses, Calpheon rioters and some kamasylvian movs. XD

Aaaah, our negative low level alts. Old timers will remember what I mean. XD

Huh? This is litteraly a designed feature in the game. And who says he is killing undergeared players or killing them repeatedly?