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The fraud department at PayPal has to exercise a large amount of caution because if they make a mistake they lose more money. The lending department at PayPal
by maxmcd 11y ago
The fraud department at PayPal has to exercise a large amount of caution because if they make a mistake they lose more money.
The lending department at PayPal can be more opportunistic because they can potentially turn a profit with a successful loan.
I'm not saying that either of those actual departments are correct or that their decisions are sound, but even at a perfectly run organization wouldn't this paradox be somewhat present?
- mcphage 11y agoI see what you're saying, but I wouldn't expect there to be overlap. I don't know how paypal chooses whose accounts to freeze, but let's say, for the riskiest 5% of accounts. Now, the lending department can handle a lot more risk than the fraud department (as you note). But I don't think they would be willing to extend that to the riskiest 5% of accounts. If there is overlap in "too risky to thaw funds" and "trustworthy enough to offer loans", then either their lending department offers loans to some seriously risky clients, or the fraud department freezes a huge % of accounts' funds. Neither seem like an acceptable situation.
- maxmcd 11y agoSure, no disagreement here. I'm looking at it slightly from the other direction. Knowing PayPal's history, and how hard fraud is to nail down on the web, I'm assuming that the 5% is actually much larger, and that the fraud department is overcautious. If that's not the case, then you're right. But if I work in the loans department and I know that the fraud department tends to blow things out of proportion, because that's what's required to prevent fraud at PayPal scale, then I should expect a little overlap. I guess overlap might not be expected at a "perfect" organization as I mentioned, but I can imagine how it might happen at PayPal