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The optimal amount of fraud is non-zero (2022)

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Re: The optimal amount of fraud is non-zero (2022)

#91

Post by cyrillite »

eviks wrote: post #72

> This is counterintuitive and sounds like it is trying a bit too hard to be clever. You should believe it. Yes, you're > you should welcome greater than zero fraud. You can think of it as a necessary expense, just like rent or salary or advertising is. You don't WELCOME costs just because they're necessary. Similarly, you wouldn't welcome fraud just because it's too costly to get rid of it. And if you add a tiny bit…

The argument seems to be a little different than what you’ve taken from it.

My interpretation was something like and efficient frontier model between multiple variables where “zero fraud” isn’t actually a position on that frontier. So, if you find a place with zero fraud, you can possibly increase the total utility of the system by aiming for slightly less than perfect but being back on the efficient frontier.

Arguably zero of anything is a great ideal but not maximally efficient.

Morally, the situation is more in favour of getting to zero.

Re: The optimal amount of fraud is non-zero (2022)

#92

Post by nox101 »

tgv wrote: post #73
GuB-42 wrote: post #16

Just like everything. The optimal amount of crime, unemployment, accidents, deaths, etc... is not zero. For example, when building a road, there is a certain chance that an accident will happen, that some people will die, and that could have been prevented. For example, by installing a guard rail, enforcing speed limits, or by taking a different path. But installing that guard rail for a one in a million chance that…

> The optimal amount of [...] deaths [...] is not zero. That's not true. It assumes that there is an objective, known price for a life. Since you can't have e.g. 0.1 deaths, there's no guarantee that the optimal amount is at least 1. It's more that it's the outcome of haggling, politics, and the willingness to turn a blind eye to the consequences of stupidity.

Maybe that's a poor way of stating the problem. In a zero tradeoff world, 0 deaths would be optimal. We don't live in that world though. For example, flying is supposedly safer than driving. Airplane crashes happen. We could demand zero deaths from the planes which would drive the costs up, causing more people to choose to drive, causing more deaths.

So, in relation to airplanes, we can't choose zero deaths in the real world. We have to choose some imperfect trade off, otherwise we'll cause more deaths.

Re: The optimal amount of fraud is non-zero (2022)

#93

Post by herbst »

teh_infallible wrote: post #70
pembrook wrote: post #49

Earlier quoted context omitted.

Ditto to this. My experience has been very similar to yours. The amount of incompetence involved with payment processing and banking is just mind boggling. KYC/AML is very quickly turning into bizarro big brother. But not an all-knowing AI big brother. A stupid 2005-era IP address detecting one. You do a little too much traveling? Poof. There goes a month of your life to banking jail. A simple two-factor mechanism li…

[flagged]

This! People must be really lucky to never have been into situations where weird banking things made their life horribly more complicated for a while.

Crypto at least completely solves the issue that you simply loose control over your own money.

Re: The optimal amount of fraud is non-zero (2022)

#94

Post by ksjskskskkk »

teh_infallible wrote: post #70
pembrook wrote: post #49

Earlier quoted context omitted.

Ditto to this. My experience has been very similar to yours. The amount of incompetence involved with payment processing and banking is just mind boggling. KYC/AML is very quickly turning into bizarro big brother. But not an all-knowing AI big brother. A stupid 2005-era IP address detecting one. You do a little too much traveling? Poof. There goes a month of your life to banking jail. A simple two-factor mechanism li…

[flagged]

by your logic a local racist militia will improve the police.

just because something is not perfect adding something obviously worse won't force the previous thing to be perfect. regulation will tho, but you cryptocoins liberals won't hear about it

Re: The optimal amount of fraud is non-zero (2022)

#95

Post by quickthrower2 »

Spunkie wrote: post #7

Anti-fraud departments have apparently not gotten the memo, and the whole situation has gotten obscene in the last few years. I regularly travel for work and it's impossible for me to make any purchases on major sites like Walmart, Best Buy, Target, Costco, etc. They all will accept an order, charge my card, and then randomly cancel the order some hours to days later, and refund me. Similarly when traveling internati…

Is this an American thing? I never get a card decline for any purchase on a credit card. Prepaid cards are another matter.

Re: The optimal amount of fraud is non-zero (2022)

#96

Post by quickthrower2 »

bsdpufferfish wrote: post #60
karmakurtisaani wrote: post #2

To summarize: there is a trade-off between amount of fraud and ease of doing business. Zero fraud means doing legitimate business becomes too cumbersome. Seems like the same point we have with security in computer systems and ease of use.

Corollary: the more trustworthy people are the less expensive everything is.

Hell yeah. At the extreme of distrust you have complete war or anarchy and you can’t get anything at any price.

Re: The optimal amount of fraud is non-zero (2022)

#97

Post by wslh »

quickthrower2 wrote: post #95
Spunkie wrote: post #7

Anti-fraud departments have apparently not gotten the memo, and the whole situation has gotten obscene in the last few years. I regularly travel for work and it's impossible for me to make any purchases on major sites like Walmart, Best Buy, Target, Costco, etc. They all will accept an order, charge my card, and then randomly cancel the order some hours to days later, and refund me. Similarly when traveling internati…

Is this an American thing? I never get a card decline for any purchase on a credit card. Prepaid cards are another matter.

I think so, not an American citizen but travel often to many places and remember Dell cancelling my notebook purchases ~5 times in a day (in two different years) until I call to a sales representative. I share the same experience in Dell with American citizens.

Re: The optimal amount of fraud is non-zero (2022)

#98

Post by quickthrower2 »

super256 wrote: post #68

Uhhh, it depends on the business? I know there are some businesses which suffer high chargeback rates (pay2cheat SaaS), and most of the chargebacks were happening by customers who said that their card has been stolen (as the merchant could easily disprove any other lie). The usual customer cycle was: buy the cheat, get banned in the game due to suspicious stats, reports or whatever, be mad about it, and then they wou…

pay2cheat… has trouble with unethical customers. Stop the presses!

Re: The optimal amount of fraud is non-zero (2022)

#99

Post by lotsofpulp »

brazzy wrote: post #4
karmakurtisaani wrote: post #2

To summarize: there is a trade-off between amount of fraud and ease of doing business. Zero fraud means doing legitimate business becomes too cumbersome. Seems like the same point we have with security in computer systems and ease of use.

Important corollary: it may well be possible to reduce fraud much closer to zero (then the currently accepted rate) without negative effects on legitimate business. For example, the USA's lack of a national ID (and the resulting adoption of realldy ba substitues like SSNs, driver's licenses and "two photo IDs") has made a plethora of fraud techniques ridiculously easy. In many other countries, "identity theft" so rar…

> For example, the USA's lack of a national ID (and the resulting adoption of realldy ba substitues like SSNs, driver's licenses and "two photo IDs") has made a plethora of fraud techniques ridiculously easy. I

US federal government provides passports with passport numbers. All the infrastructure is already in place, it’s just a question of political will to implement an API to use this for identity verification.

Re: The optimal amount of fraud is non-zero (2022)

#100

Post by blitzar »

quickthrower2 wrote: post #95
Spunkie wrote: post #7

Anti-fraud departments have apparently not gotten the memo, and the whole situation has gotten obscene in the last few years. I regularly travel for work and it's impossible for me to make any purchases on major sites like Walmart, Best Buy, Target, Costco, etc. They all will accept an order, charge my card, and then randomly cancel the order some hours to days later, and refund me. Similarly when traveling internati…

Is this an American thing? I never get a card decline for any purchase on a credit card. Prepaid cards are another matter.

America and Americans have a much higher predisposition to credit card fraud than the rest of the world.
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