An Identity Thief Explains the Art of Emptying Your Bank Account • Hacker News Board

Re: An Identity Thief Explains the Art of Emptying Your Bank Account

#61

Post by t0mbstone » Thu, Jul 16, 2015, 9:46 PM UTC

mikeash wrote: post #54

t0mbstone wrote: post #52

Earlier quoted context omitted.

Because credit card companies are run by imbeciles who don't understand security. Instead of actually solving their security issues, they just crunch the numbers and mitigate their risks with accountants. They are still raking in buttloads of money (like 3% of every transaction), so even with all the theft, they are insanely profitable.

I don't know that they are stupid. Security is a tradeoff, and if their optimal profit level is one where fraud happens at a decent level, is that really wrong? This reminds me of the Potato Paradox article posted on the front page. Imagine if the card company comes up with some way to cut fraud by 50%, while the added hassle has a minor impact on legitimate transactions, reducing them by 1%. That's likely to be a si…

Percentages are percentages. If you gain 1% in profits from lower fraud, but lose 1% of transactions due to the security measures on the credit cards being harder to use, you are still basically breaking even.

They would also be saving tons of money from being able to reduce their fraud analysis and recovery staff, and they would build goodwill with not only their merchants but also their customers. I know plenty of people who still dislike using credit cards because of the potential for fraud and having their number stolen.

When you think about it, it's pretty insane how many people you probably hand your credit card to every week. Any one of those people could have a smart phone or something with the camera on, capturing the numbers on the front and back of the card. Credit card numbers are so insecure right now, it's ridiculous. If you are going to use a credit card as a consumer, you pretty much need to keep a non-stop eye on your statements. And when you actually DO get your number stolen, you have to deal with the hassle of disputing the charge and going back and forth.

Who knows? Maybe they would actually have a big upswing in credit card usage (and the resulting transaction percentage profits) if they released a "new, more secure card"?

Re: An Identity Thief Explains the Art of Emptying Your Bank Account

#62

Post by mikeash » Thu, Jul 16, 2015, 9:59 PM UTC

t0mbstone wrote: post #61

mikeash wrote: post #54

Earlier quoted context omitted.

I don't know that they are stupid. Security is a tradeoff, and if their optimal profit level is one where fraud happens at a decent level, is that really wrong? This reminds me of the Potato Paradox article posted on the front page. Imagine if the card company comes up with some way to cut fraud by 50%, while the added hassle has a minor impact on legitimate transactions, reducing them by 1%. That's likely to be a si…

Percentages are percentages. If you gain 1% in profits from lower fraud, but lose 1% of transactions due to the security measures on the credit cards being harder to use, you are still basically breaking even. They would also be saving tons of money from being able to reduce their fraud analysis and recovery staff, and they would build goodwill with not only their merchants but also their customers. I know plenty of…

Recasting fraud reduction as "1% in profits" is extremely misleading, because fraud is a tiny proportion of overall activity. Reducing fraud by 1% of profits would require a huge improvement in your ability to fight fraud, whereas reducing legitimate transactions by 1% of profits is much easier.

And it's not like card companies do absolutely nothing. The US is finally moving to chips, which will cut down a lot. Notably it's just chips, not chip-and-PIN, because they want to keep that friction low. But when they are able to fight fraud while still keeping friction low, they do it.

I think the market is competitive enough that if people wanted more security, someone would offer it and it would gain in popularity. We do see this to an extent, with security features like sending transactions to your phone as they happen. In fact, a very few banks will issue you a chip-and-PIN card right now if you want it. Or you can get a debit-only card, with no credit features, so that a PIN is always required. Mostly people don't seem to care, though.

Re: An Identity Thief Explains the Art of Emptying Your Bank Account

#63

Post by timv » Thu, Jul 16, 2015, 11:41 PM UTC

stephengillie wrote: post #42

timv wrote: post #12

Earlier quoted context omitted.

While I agree that AMEX should have just locked the account for fraud, one possible explanation that would create this scenario is a relationship breakup. Man breaks up with his partner, and moves out of their shared home. He changes his phone number to be his new home. Amex calls the old number, gets the old partner who is particularly vindictive and decides to answer the questions as well as he can. When I worked i…

> If a husband and wife share and account and share an address do you send them separate statements, or combine them? Don't allow people to share accounts? That seems to solve a lot of problems. What problems does it create?

Others have mentioned the importance of joint savings accounts for married couples, and for businesses.

They're also very important for mortgages. If the mortgaged asset is jointly owned (and that's typically the case in a marriage) then you, in practice, need all owners to be a party to the loan. The house is security on the loan - if I only own half the house then I can only borrow against my half. And my wife can borrow against her half. But if I default on my loan, then how does my bank foreclose on me and sell their asset when there is another owner who may not wish to sell.

There are other solutions, but the easiest, and the one that banks will typically insist on is a joint asset requires a joint loan

Re: An Identity Thief Explains the Art of Emptying Your Bank Account

#64

Post by timv » Thu, Jul 16, 2015, 11:58 PM UTC

stephengillie wrote: post #60

bargl wrote: post #56

Earlier quoted context omitted.

I'm going to add that it's also really nice for budgeting. If you want 2 people to get on the same budget you have to show the benefits of the budget. Also I don't pay 1/2 my mortgage and my wife pays the other 1/2 we pay it all together (from the one account). We actually turned down an account with Plastic because no shared accounts. We each have an individual credit card but that's more for tracking if we are meet…

So how do business partnerships share funds? I doubt both partners commingle their personal finances.

Once a business is incorporated, it is its own legal entity and needs to have its own pool of funds that is legally separate from the owners' funds.

There would be one or more accounts held in the name of Super Secret Labs LLC and in most cases that business account would have rules about who was allowed to approve the transfer of funds out of the account, and to what limit. In many cases it may require approval from 2 account holders.

Prior to incorporation, the call on funds would typically be much lower, so it's probably going to be a bit ad-hoc, and might just use an account held by one of the founders with everyone throwing their share when needed. If you can't trust your cofounder with $2k, then don't start a business with them.

Re: An Identity Thief Explains the Art of Emptying Your Bank Account

#65

Post by gdy » Fri, Jul 17, 2015, 8:27 AM UTC

Paul_S wrote: post #46

gdy wrote: post #24

Earlier quoted context omitted.

You are misinformed, Belarus is not occupied by Russia.

Ah, yes. Back in the communist era my country was also an independent democracy (with electoral turnout of almost 100%, more democratic than the rotten west!) who just happened to be gloriously "cooperating" with our soviet brothers... and then there was reality.

You should read more about Russia-Belarus relations, like tensions regarding Eurasian Economic Union or Belarus's refusal to recognize independence of South Ossetia and Abkhazia or Crimea reunification.

And, by the way, it's been more than 25 years since the dissolution of Soviet Union in case they haven't told you that after unfreezing you.

Re: An Identity Thief Explains the Art of Emptying Your Bank Account

#66

Post by gdy » Fri, Jul 17, 2015, 8:31 AM UTC

JupiterMoon wrote: post #27

gdy wrote: post #24

Earlier quoted context omitted.

You are misinformed, Belarus is not occupied by Russia.

I was under the impression that Belarus is firmly under Moscow's influence?

Yep, constantly milking Moscow for money and refusing to recognize independence of South Ossetia and Abkhazia or Crimea reunification.

Re: An Identity Thief Explains the Art of Emptying Your Bank Account

#67

Post by _yosefk » Fri, Jul 17, 2015, 2:35 PM UTC

mikeash wrote: post #51

_yosefk wrote: post #23

Earlier quoted context omitted.

The idea that you arrest someone to serve time in your prison because he broke your laws, and then you cannot send them back because of another law is just mind-blowing.

How so? That's sort of the whole point of law and the government. You may not follow the law, and you may be punished if you don't, but they are always supposed to. You don't forfeit all your rights just because you break the law.

Well, yeah, but this guy gained whatever rights he has in the US just by breaking US law and being kept in prison there. Not only didn't he forfeit rights just by breaking the law - he gained his rights that way! Sounds a tad buggy and something a lawmaker might want to fix to avoid this kind of thing next time.

Re: An Identity Thief Explains the Art of Emptying Your Bank Account

#68

Post by adebtlawyer » Fri, Jul 17, 2015, 2:59 PM UTC

timv wrote: post #63

stephengillie wrote: post #42

Earlier quoted context omitted.

> If a husband and wife share and account and share an address do you send them separate statements, or combine them? Don't allow people to share accounts? That seems to solve a lot of problems. What problems does it create?

Others have mentioned the importance of joint savings accounts for married couples, and for businesses. They're also very important for mortgages. If the mortgaged asset is jointly owned (and that's typically the case in a marriage) then you, in practice, need all owners to be a party to the loan. The house is security on the loan - if I only own half the house then I can only borrow against my half. And my wife can…

People rarely think of this in advance, but joint debts of any kind usually become a problem in divorce. One former spouse will stop paying and ruin the other spouse's credit, to say nothing of causing foreclosures. It doesn't matter what the family court orders (this spouse will pay that debt, etc), because that won't change the underlying obligation as far as the creditor is concerned.

Joint credit cards, which aren't attached to any asset, don't have much benefit compared to this downside. What people are typically told is happening is that the credit card still 'belongs' to one spouse, but the other will be also authorized to 'use' it. While this is possible, the paperwork presented to sign often makes the other spouse jointly liable for the debt instead. I'm convinced even the bank representatives don't know they are setting up things this way and are just following a script. You have to read the paperwork to see what it does.

Re: An Identity Thief Explains the Art of Emptying Your Bank Account

#69

Post by stephengillie » Mon, Jul 20, 2015, 6:07 PM UTC

adebtlawyer wrote: post #68

timv wrote: post #63

Earlier quoted context omitted.

Others have mentioned the importance of joint savings accounts for married couples, and for businesses. They're also very important for mortgages. If the mortgaged asset is jointly owned (and that's typically the case in a marriage) then you, in practice, need all owners to be a party to the loan. The house is security on the loan - if I only own half the house then I can only borrow against my half. And my wife can…

People rarely think of this in advance, but joint debts of any kind usually become a problem in divorce. One former spouse will stop paying and ruin the other spouse's credit, to say nothing of causing foreclosures. It doesn't matter what the family court orders (this spouse will pay that debt, etc), because that won't change the underlying obligation as far as the creditor is concerned. Joint credit cards, which are…

This is exactly where I was leading with my questions. Joint accounts might simplify the sharing of cash between household partners, and thus simplify household operations, but it complicates everything else.

I suppose a temporary convenience now is worth a very complicated situation in the future. Thus is also why we traditionally forego prenuptial agreements.