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I presume that the word 'not' in the title is making the assumption that these changes were made by the banks to reduce fraud. Why would they do that? I know t
by auxbuss 16y ago
I presume that the word 'not' in the title is making the assumption that these changes were made by the banks to reduce fraud.
Why would they do that? I know they say that's what they are trying to do, but they have little vested interest in doing so, because not only are they not the losers in fraudulent transactions, but they actually profit by them.
The loser in a fraudulent card-not-present transaction is, usually, the merchant. If not, the card-holder.
No only are the funds removed from the merchant's account, often including the additional fee that the bank makes for fraud checks, but they are then charged an additional fee for the "charge back".
The system sucks and always has done. The banks have it wrapped up to avoid any loss.
The only way that fraud will be reduced -- and it is easily eliminated, in all honesty -- is to make the banks 100% liable for the losses.
Governments could do this tomorrow, if they chose to.
- tptacek 16y agoOne problem here is that there are a lot of collusive merchants who act as fences for stolen transactions, both directly and by paying affiliate fees. Since you presumably don't buy many herbal supplements, you haven't come into contact with them, but they're out there. Between the merchants, consumers, and banks, it's the consumers who have the least control over transaction authentication. On the other hand, without the threat of any penalty, merchants are incentivized to optimize for conversions at the cost of security It does not make sense to me that the banks should be ONE HUNDRED PERCENT liable for losses.