Points are part of the infraction system of the VBulletin software we use for then forum.
You have your basic garden variety warnings - no points. It's like a teacher glaring at a kid in elementary school.
Then you have your infractions. Depending on the gravity of the whatever one did you get assigned "points". These points can expire after a customized time span or never.
A lot of forums use these points to set a auto ban trigger. If you've acquire X points within a particular timespan you incur the auto ban hammer. We didn;t set the trigger as we otherwise we will have no members left
When mods give an infraction (red card) as opposed to warnings (yellow card) they can modify the default span and points for that particular infraction. Hence you might end up with 9999 points. That means in admin code "Seriously dude? What were you thinking?"
I can understand the rationale for the point systen and autoban - works for forums with bunches of kids and where emo kids are also mods (removes mod bias to a certain extent) but that still doesn't prevent a vindictive mod to show multiple red cards to force a ban.
Anyway - the key to a well run forum is transparency to a certain extent. We've not been to good with at at times - trying to weigh not wanting to personally shaming someone with letting other members know why so and so suddenly got detention. It's not easy.