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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)

#121

Post by avianlyric »

zimpenfish wrote: post #112
quickthrower2 wrote: post #95

Earlier quoted context omitted.

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

> Is this an American thing? No. My (UK) bank will decline purchases if they look suspicious and send me an SMS with the information and ask me to yay/nay them. (For 4 years running, they did this for my early September purchase to Apple. Most annoying.)

Apple iPhone release day is a right royal pain in the arse for banks. The surge of one-off high value payments causes a huge spike in false positive fraud detections, which then swamps staff responsible for performing manual checks. And that’s after we’ve already tweaked rules to prepare for iPhone day

On top of all the, the fraud systems at the major card networks also go haywire. They start seeing huge spikes in high value transactions, and start randomly declining transactions. On the banks side, we can see these transactions being declined by the network, but it’s damn near impossible to stop them. The card networks themselves set the rules, and getting hold of someone technical enough to turn them off is surprisingly hard to do.

Suffice to say, iPhone day each year is a bit of an all-hands-on-deck situation for bank fraud teams. You’ve got your technical teams trying to tweak rules to better detect and ignore iPhone purchases, which it much harder than it should be because Apples payment processing system is a Byzantium nightmare that creates so many different types of transactions, and uses so many merchant identities you can just do a simple “if Apple, ignore” rule. Then you’ve got your reviewer teams working hard to rapidly the all the flags so customers are impacted for too long.

It doesn’t help that buying MacBooks and iPhones is a classic way for people to commit credit card fraud and money laundering. The products hold their value so well, and are so easy to shift on the second hand market, that’s it’s a prime method for organised crime groups to liquidate and launder stolen funds.

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

#122

Post by avianlyric »

mgoetzke wrote: post #75
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…

Same here. While in a Nike Store in London, I could not use my Barclaycard for a 50 EUR purchase. So unheard of to use a Mastercard for purchasing something while on vacation. Used a different card which worked fine. No SMS or notification on my phone to verify myself either. Wrote them a mail to ask what this was about and why I cannot use my card, but they only wrote back that the card was not blocked and everythin…

I’m a little confused, a 50EUR purchase in London, UK? Also which country was the Barclaycard issued in?

You’ll probably also find that banks are much twitcher around merchants like Nike and Apple because their products hold value really well, and are easy to sell on the second hand market. Makes those products a really great way to exfiltrate stolen funds because the products are almost as liquid as actual cash.

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

#123

Post by mjw_byrne »

cm2187 wrote: post #119
mjw_byrne wrote: post #116

Clickbaity, trying-too-hard title. The point being made is mundane: perfection is too expensive, so we settle for "good enough". This is near-universally applicable and near-universally understood. The author is trying to make it sound deep and meaningful with statements like "you should welcome some fraud", as though fraud is actually required for the system to function (clever counterintuitive point made, cue huge…

Agree. Particularly the tax writeoff argument is complete bullshit. You could make an argument that you need some level of fraud to keep the anti-fraud dept on its toes. It’s like war. If you have an army that has never fought a war in a century, you should have no confidence you have an army at all. That’s a problem the day a real war or in this case a real fraud, happens.

Yes, and that would be a genuinely interesting point. For example, it could be compared it to the need for regular backup testing, where we generally try to maintain DR readiness with artificial testing and certainly not by accepting a certain frequency of disasters.

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

#124

Post by izacus »

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.

No, I had fun times with UK Citibank blocking my card when I tried to pay for a hotel in US as well. Nothing better than not being able to pay for a reserved room after 13 hours of travelling.

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

#125

Post by izacus »

avianlyric wrote: post #121
zimpenfish wrote: post #112

Earlier quoted context omitted.

> Is this an American thing? No. My (UK) bank will decline purchases if they look suspicious and send me an SMS with the information and ask me to yay/nay them. (For 4 years running, they did this for my early September purchase to Apple. Most annoying.)

Apple iPhone release day is a right royal pain in the arse for banks. The surge of one-off high value payments causes a huge spike in false positive fraud detections, which then swamps staff responsible for performing manual checks. And that’s after we’ve already tweaked rules to prepare for iPhone day On top of all the, the fraud systems at the major card networks also go haywire. They start seeing huge spikes in hi…

Poor guys, having to work to fix the fsck up they created themselves.

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

#126

Post by robertlagrant »

bigger_inside wrote: post #117
robertlagrant wrote: post #115

Earlier quoted context omitted.

You're confusing two things. If the government pays for healthcare, that is for people, but goes to organisations to implement what's being paid for.

like trillion dollar bank bailouts, subsidies awarded through ruinous competition among jurisdictions, trillions and trillions of dollars of defense spending for which the government will invent endless wars.. like that?

If you like, you can look at the data[0] I'm looking at. 15% on defence; 67% on health and related; education; social security; etc.

[0] https://fiscaldata.treasury.gov/americas-finance-guide/feder...

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

#127

Post by trabant00 »

mjw_byrne wrote: post #116

Clickbaity, trying-too-hard title. The point being made is mundane: perfection is too expensive, so we settle for "good enough". This is near-universally applicable and near-universally understood. The author is trying to make it sound deep and meaningful with statements like "you should welcome some fraud", as though fraud is actually required for the system to function (clever counterintuitive point made, cue huge…

Exactly. "We can't divert all of society's resources on policing" is different than "The optimal amount of murder is non-zero" or "you should welcome greater than zero murders".

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

#128

Post by akoboldfrying »

akerl_ wrote: post #52
russelg wrote: post #32

Earlier quoted context omitted.

In Australia, drivers licenses and passports are defacto national IDs. And we felt the sting of that when Optus (2nd largest telecom provider) leaked half of the population's IDs. Not to mention before this there was almost no way to get a new drivers license number, so if it got stolen good luck, a new license is issued under the same number.

Are AU drivers licenses issued by the national government, or by states? The thing that makes DLs wonky in the US is that while you can basically use a DL as a national ID, it is issued, managed, and operated by the state. So no two state's DLs look the same or have the same info. This makes them amazingly easy vectors for fraud. As two amusing anecdotes: A while back, I went to buy some beer in a state other than wh…

>The employee pulled out this comically thick three ring binder, flipped to the page for my state, and had to read through a list of compiled identifying factors for a legitimate ID from my state.

This is literally the core gameplay of Papers, Please, a game designed to make you feel bad. (A great game, I hasten to add, and surprisingly enjoyable -- though allowing yourself to enjoy it means turning off empathy more consciously than in anything I've played before.)

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

#129

Post by sakjur »

herbst wrote: post #93
teh_infallible wrote: post #70

Earlier quoted context omitted.

[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.

Wouldn’t you lose control over your own money if you lost your private key?

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

#130

Post by lkirkwood »

sakjur wrote: post #129
herbst wrote: post #93

Earlier quoted context omitted.

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.

Wouldn’t you lose control over your own money if you lost your private key?

The point is you have total control over your key. You don't control the banks and there's no guarantee you can always get your money from them.
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