3 ms·

The financial institution is, in fact, liable for these sorts of charges. The Bloomberg reporter's problems weren't that he had to pay a bunch of money because

by harryh 7y ago

The financial institution is, in fact, liable for these sorts of charges. The Bloomberg reporter's problems weren't that he had to pay a bunch of money because a fraudster did a bunch of stuff using his name. His problems were all related to his damaged reputation (credit score, government lists, etc).

ksdale 7y ago
Your point is well taken about the banks. I think the general principle still applies though. We have a system where all of these entities possess all kinds of information, and the main question is, "Who should pay when they get that information wrong through no fault of the person whose information they're keeping?" At the end of the day, his problem is exactly that he had to pay a massive cost (in the form of reputational damage and tremendous wastes of his time) because a fraudster did a bunch of stuff using his name. While not technically monetary, it's definitely not impossible to financially quantify people's time and reputation.
IX-103 7y ago
If the bank were really liable they would pay for the damage to the reporter's reputation and make a reasonable effort to set it right.
- jdsully 7y ago
  I don’t see why he couldn’t sue the bank. Someone should try it.
  - justin66 7y ago
    Interesting choice of words. Suing a bank is not the sort of thing you do because you're curious what will happen.
    - jdsully 7y ago
      Small claims is pretty accessible. This isn't exactly lawsuit of the century stuff - their actions defamed and harmed you monetarily which is exactly the sort of issue our tort system was setup to deal with. Note that if it was your own bank that defamed you, then you may have signed an arbitration agreement.
PeterisP 7y ago
Well yeah, and that's not how it should be, and how is it elsewhere. If the bank claims that I have a delinquent loan, and that claim is false due to their negligence, then they should be liable for all the consequences. In Europe a more usual consequence would be that if a bad credit is reported and disputed (because it's not mine) then (a) the disputed bad credit notice would have to be immediately removed until the dispute is resolved; (b) the burden of proof is up to the institution, not the borrower; and (c) "a guy came in, claimed to be you, and knew your ID number and your mom's maiden name" is not considered proof. So the end result is that they'd be out of money and my credit would still be clean. This also means that any institutions with lax ID policies will be heavily targeted by fraudsters. If you're the only car rental (for example) which doesn't properly verify identity, then every crook in the country (and beyond) will come and visit your office. For example, banks used to take scans of the ID used - if the picture they have is not your real ID, then there's no dispute that it's not you; and if it's your real ID and it was reported as lost/stolen beforehand (companies can query that data), then there's no dispute, their claims are not valid and they're not allowed to tell any other companies (credit registers/etc) that you have a bad debt because that's libel and they'd be liable for any damages. If they think that I'm just faking that claim, they're free to go to the police and press charges that I did take that loan and I'm defrauding them by these false statements. Then it's a criminal case - serious consequences, but also serious burden of proof. Or they're free to go to the police with surveillance cam footage of the person who took that loan and have them look for the fraudster. And things like the regulations for managing credit scores and government lists are things that the gov't can (and should) change to remove undue burden from the person whos identity was used by fraudsters.

by harryh 7y ago

ksdale 7y ago

Your point is well taken about the banks. I think the general principle still applies though. We have a system where all of these entities possess all kinds of information, and the main question is, "Who should pay when they get that information wrong through no fault of the person whose information they're keeping?" At the end of the day, his problem is exactly that he had to pay a massive cost (in the form of reputational damage and tremendous wastes of his time) because a fraudster did a bunch of stuff using his name. While not technically monetary, it's definitely not impossible to financially quantify people's time and reputation.

IX-103 7y ago

If the bank were really liable they would pay for the damage to the reporter's reputation and make a reasonable effort to set it right.

jdsully 7y ago
I don’t see why he couldn’t sue the bank. Someone should try it.
- justin66 7y ago
  Interesting choice of words. Suing a bank is not the sort of thing you do because you're curious what will happen.
  - jdsully 7y ago
    Small claims is pretty accessible. This isn't exactly lawsuit of the century stuff - their actions defamed and harmed you monetarily which is exactly the sort of issue our tort system was setup to deal with. Note that if it was your own bank that defamed you, then you may have signed an arbitration agreement.

PeterisP 7y ago

Well yeah, and that's not how it should be, and how is it elsewhere. If the bank claims that I have a delinquent loan, and that claim is false due to their negligence, then they should be liable for all the consequences. In Europe a more usual consequence would be that if a bad credit is reported and disputed (because it's not mine) then (a) the disputed bad credit notice would have to be immediately removed until the dispute is resolved; (b) the burden of proof is up to the institution, not the borrower; and (c) "a guy came in, claimed to be you, and knew your ID number and your mom's maiden name" is not considered proof. So the end result is that they'd be out of money and my credit would still be clean. This also means that any institutions with lax ID policies will be heavily targeted by fraudsters. If you're the only car rental (for example) which doesn't properly verify identity, then every crook in the country (and beyond) will come and visit your office. For example, banks used to take scans of the ID used - if the picture they have is not your real ID, then there's no dispute that it's not you; and if it's your real ID and it was reported as lost/stolen beforehand (companies can query that data), then there's no dispute, their claims are not valid and they're not allowed to tell any other companies (credit registers/etc) that you have a bad debt because that's libel and they'd be liable for any damages. If they think that I'm just faking that claim, they're free to go to the police and press charges that I did take that loan and I'm defrauding them by these false statements. Then it's a criminal case - serious consequences, but also serious burden of proof. Or they're free to go to the police with surveillance cam footage of the person who took that loan and have them look for the fraudster. And things like the regulations for managing credit scores and government lists are things that the gov't can (and should) change to remove undue burden from the person whos identity was used by fraudsters.