One area of speculation based on the fundamental characteristics of how levels and money is decided, makes it sensible that one penalty that may exist for switching sides is a reduction back to level 1 and loss of all money. This is sensible when you think about what the levels are called and implied, for heroes levels are security levels (aka how much they establishment trusts you). It would not make sense for a villain who has become very notorious to immediately have the security level of one who has contributed to society as a pure blue-side. Same with money, money on hero side is Influence, (aka how much influence you have upon people based on actions), villains have infamy (how infamous they have become), if a villain goes blueside, then they may have to prove themselves as a good character. This system would make the switch a Pain, but yet still keep things flexible. And the process itself for redemption and falling from grace would be sensible that it would be very difficult and tough, such that maybe only high level char's can go through process of alignment change.
