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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)

#131

Post by regularfry »

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…

The comment directly above you on the page right now gives an example of people getting the trade-off wrong, so your dismissiveness is pointless.

The framing is also relevant for another reason: choosing a conscious trade-off point means that you can choose to move it as circumstances dictate, which can be very non-obvious. There's currently a lot of noise in the UK media about dodgy PPE contracts issued during COVID, and for my money most of the coverage misses the point.

The coverage focuses on who the contracts went to, and how much they cost. There is only scant consideration given to whether the contracts were fulfilled (and they weren't - the PPE was no good and couldn't be used).

This is precisely backwards: in an emergency situation where you don't have enough of a thing, and the existing systems to provide the thing are very much tuned to preventing fraud, you absolutely want to be able to throw money at the problem and accept that more of it than usual will be going places you wouldn't ordinarily tolerate. That's a lever we should definitely be able to pull, by making a conscious choice to relax . But that's only true if you do actually get what you paid for.

Yes, you want to be able to follow up any dodgy procurement after the fact, but in the moment what you need is the critical resource.

The scandal should be that none of it worked, not how it was bought.

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

#132

Post by amadeuspagel »

> This is counterintuitive and sounds like it is trying a bit too hard to be clever.

Indeed.

You could make the same counterintuitive and clever point about any bad thing, pointing out that there are things one might do to reduce that thing, which have other costs, and aren't worth it, but for many bad things that would not sound counterintuitive and clever, but deranged.

Consider the following statement:

> The optimal amount of salt in food is non-zero.

That's true, and it's not clever at all, we need salt. It's not that trying to remove all salt from food would be too expensive.

But consider also:

> The optimal amount of radioactive material in food is non-zero.

We might defend this in a similar clever counter-intuitive sense. But it's a completely different statement, and it's wrong.

EDIT: The three replies making the same point about bananas are a great illustration of the desire (and failure) to be clever and counter-intuitive that's also evident in the article. We don't eat bananas for their radioactive material. We don't need to eat radioactive material.

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

#133

Post by SkeuomorphicBee »

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…

Your mundane explanation misses the main point that perfect security can't exist while maintainint function. It is not just a matter of cost cutting, it is a (sort of) fundamental law that security and usability are opposite ends of a spectrum, at the limit any gains in security can only be achieved by a loss of usability. So any system that is perfectly secure will be perfectly unusable, or in the business angle, any system with 0% fraud will have 0% sales.

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

#134

Post by alemanek »

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…

I have been traveling internationally continuously for 6 years and haven’t had any of these issues. I use Schwab, Capital One, and Chase for banks and credit cards. I don’t stay any one place longer than 6 months; usually just 3months in a country.

When my bank card expired Schwab even overnighted a new card to Peru for me. I order from Amazon a fair amount and don’t have any issues.

Maybe you are in this weird algorithmic grey zone where you don’t travel enough so everything gets flagged. Where for me I have been traveling for so long that nothing gets flagged.

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

#135

Post by regularfry »

cyrillite wrote: post #91
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. Arguab…

I don't think you can even make a moral argument in favour of zero fraud, because that implies choosing to harm genuine users. There's always a trade-off between fraud prevention and genuine use. This is extremely important in social benefit systems, where people can literally die if the system incorrectly thinks they are trying to defraud it and cuts them off.

Non-zero fraud is useful for political point-scoring, but zero fraud is a terrible goal on its own. You also need to be measuring false positive cost, and drive that to zero too. The moral argument has to be for the efficiency frontier itself, I can't see any other way this works.

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

#136

Post by carlosjobim »

ksjskskskkk wrote: post #94
teh_infallible wrote: post #70

Earlier quoted context omitted.

[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

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

It very well could, why not? All kinds of unsavoury groups do policing around the world. Often wearing a government badge. Some people think that is acceptable, to keep murderers and looters off the street, while some people think that racism is so unacceptable that murder and looting is preferable.

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

#137

Post by rkachowski »

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…

Allowing me to buy things via my bank account is pretty much the use case for a bank account. I have very little sympathy for the self inflicted "byzantine" consequences that result from a single valid purchase.

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

#138

Post by rjmunro »

I think that fraud prevention is mostly the wrong approach. Instead they should let the frauds happen, then track the fraudster and send the police to arrest them. Normal prevention just means the criminal has to keep trying until it works. Tracking the money after means that criminals will never know if the next knock at their door will be the police.

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

#139

Post by herbst »

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?

I know nothing in IT is certain. But I am pretty sure anyone can come up with a simple (or complex) backup solution that suits them and is 99.99% safe.

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

#140

Post by rjmunro »

lkirkwood wrote: post #130
sakjur wrote: post #129

Earlier quoted context omitted.

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.

What if you get Dementia (or even die) and forget the password?

It's possible to have set up a second password with a trusted third party, but then you have to trust that entity the same way you trust the bank - not just against them stealing your money, but against other parties hacking their systems and recovering your keys.

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