The optimal amount of fraud is non-zero (2022) • Hacker News Board

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

#201

Post by avianlyric » Wed, Jan 10, 2024, 10:49 AM UTC

ThePowerOfFuet wrote: post #181

avianlyric wrote: post #121

Earlier quoted context omitted.

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…

>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. With 3DS2 why is this even a thing?

Because Apple don’t use 3DS, also it impact things like in-store payments, and also Apple Pay setup. Cards are added to Apple Pay using a special set of payment network transaction messages, which to the networks systems just look like normal card transactions. Unfortunately the network fraud rules aren’t smart enough to differentiate between thousands of cards being added to Apple Pay, vs thousands of unexpected transactions that all appear to be coming from the same “merchant”.

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

#202

Post by regularfry » Wed, Jan 10, 2024, 2:36 PM UTC

eviks wrote: post #199

regularfry wrote: post #135

Earlier quoted context omitted.

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, bu…

Why is 0 terrible if it's also on the efficiency frontier? And what's you moral argument for the level of fraud at the frontier? Is the same efficiency better with lower levels of fraud or higher or indeterminate?

> Why is 0 terrible if it's also on the efficiency frontier?

When would this be the case? I'm having trouble picturing it.

> And what's you moral argument for the level of fraud at the frontier?

The frontier is exactly the point at which you cannot reduce the amount of fraud without it costing genuine users (and you) more than you gain. So if you're at the frontier and you want to reduce the amount of fraud further, you are acknowledging that harms to users are less important to you than losses from fraud, and doing so would be immoral. The efficient frontier should be the point of least moral harm, almost by definition - at least, as long as all the relevant externalities are priced in.

> Is the same efficiency better with lower levels of fraud or higher or indeterminate?

That's a trolley problem question. Higher levels of fraud at the same level of efficiency would mean there's a corresponding rise in value delivered from genuine usage of the service, so cost/benefit is the same and preference boils down to personal choice. But it sidesteps the more difficult question, which is how taking action to reduce the level of fraud actually plays out: there'll be diminishing returns as you take more and more extreme steps. Each step will likely have an incrementally more harmful effect on the genuine users, so efficiency won't remain the same.

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

#203

Post by robertlagrant » Thu, Jan 11, 2024, 10:00 AM UTC

jokethrowaway wrote: post #148

robertlagrant wrote: post #126

Earlier quoted context omitted.

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...

Sure, let's assume 100B What's the value provided to citizens by spending 67B on health in the USA in terms of value provided? 10B in a country where prices are not the result of insurance companies colluding with the government?

I'm replying to this:

> Government money is a direct pipe to transnational corporations and the billionaires that run it. Welfare payments are peanuts compared to it.

I don't see the point in hypotheticals. You're restating the politics you've absorbed over years of consuming a certain slant of media. There's no point in that, and no point in me doing the same.