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Robinhood is playing a game it learned from banks. If I walk into a bank with a gun and demand money, everyone agrees I am robbing the bank. But if I walk into
by ydlr 6y ago
Robinhood is playing a game it learned from banks.
If I walk into a bank with a gun and demand money, everyone agrees I am robbing the bank. But if I walk into your bank and claim to be you, suddenly I am not robbing the bank. I am committing "identity theft," and the bank will take no responsibility and do as little as legally possible to help resolve the situation.
It is a neat trick.
Pass all the expense of being a victim of a crime down to your customers.
- cosmie 6y agoSame with credit cards. The banks/issuers get the benefit of advertising "no liability" to consumers for fraudulent transactions, yet ensure they're able to contractually shift as much of the cost onto the merchants that were ripped off, rather than eat it themselves[1]. [1] https://www.nerdwallet.com/article/credit-cards/merchants-victims-credit-card-fraud https://www.nerdwallet.com/article/credit-cards/merchants-vi...
- sharkweek 6y agoA few fun side notes about bank robberies. I used to be a bank teller and we were instructed under no uncertain terms to hand over whatever we had and enjoy a week of paid vacation to recover from any potential trauma suffered. The bank I worked for had a corporate security team who wouldn’t even stop their lunch break to review one isolated robbery, instead they’d look for serial cases, or occasionally assess how likely it was that it had any “inside job” elements if the robbery didn’t fall within standard profiles. The actual “vault” in most branches is barely bigger than a high school locker inside the room behind the big metal door. Most everything else kept behind that huge metal door is administrative or customer related documents (arguably worth more than the cash itself!). Lastly, about once a week, I was tasked with filling the ATMs for a branch that was in a downtown office building lobby. The ATMs were in a wall and had a little secret door that I’d access to audit the machines and count the money I’d refill them with. Each machine could hold 200k or so and there were two of them but there was no real clear way to get the $400,000 from our secured vault to the machines without armed security or something. In order to avoid having to order an escort every time, we’d just load the cash into a printer paper box and stealthily walk it across the lobby like I was just carrying actual printer paper (insert your federal reserve jokes here). It’d take 2-3 hours to audit and refill the machines, meaning I would have had a nice head start if I had the guts and gray morality to make a run for it.
- dmoy 6y agoI had family who worked in banking for a long time The policies across the board are to just hand over money. As a result, there's essentially zero fatalities from bank robbery. Maybe a few every year, usually the criminal themselves. However, bank robbers only get away with about 10% of cases. Clearance rates are super, super high now. And because they're usually serial, almost every single bank robber gets caught. There's a whole slew of tactics used.
- WalterBright 6y ago> The policies across the board are to just hand over money. Makes perfect sense. They lose a few bucks, vs the $$$$ they'd have to pay in the lawsuit. Let the cops deal with the crooks.
- dmoy 6y agoThey don't lose a few bucks, it's insured. I vaguely recall it's part of FDIC even.
- WalterBright 6y ago> They don't lose a few bucks, it's insured. That's not how insurance works. If you file claims against the insurance company, they pay the claim, but your rates go up to cover it. YOU wind up paying.
- ficklepickle 6y agoI can't believe you were down-voted for that. It is absolutely true. Insurance, especially for things likely to happen, is basically a payment plan.
- sharkweek 6y agoThis isn’t true but appreciate that it’s what most people think. Just gets written off as a loss. Same goes for cashing bad checks, etc.
- JackFr 6y agoThat’s why I’ve never understood the utility of debit cards. When a debit card is abused fraudulently I am out the money. When a credit card is abused fraudulently the bank is out the money. In both cases neither the bank nor I have done anything wrong. We’re both literally victims of a crime. And through the payments system and the justice system we’ll hopefully be made whole in the end. But the difference is the incentives. When I lose the money the bank has less of an incentive to rectify the situation.
- snazz 6y agoSome people with particularly bad spending habits use debit cards as a way to enforce self-control, but there are probably much better ways of achieving that. Teenagers also use them when paying with their own money because you can't have a credit card until you're 18 unless it's an authorized user card on your parents' account. Costco used to make you pay with a debit card, if I remember correctly. But those are pretty much edge cases. Credit builder and secured credit cards exist for people with poor or no credit.
- yencabulator 6y ago> Costco used to make you pay with a debit card, if I remember correctly. Costco, gas stations, and some mom & pop shops really want to save on that credit card processing fee. Personally, I consider missing out on the cash discount at a gas station a convenience & fraud protection fee.
- brewdad 6y agoCostco used to have an exclusivity deal with AmEx that prevented other credit cards from being accepted. They did accept debit cards however. They now have a deal with Visa, along with their own branded Visa card but will accept any bank's Visa card.
- vaccinator 6y agoI just disputed an ACH transfer and they refunded it ... That is probably even less secure then a debit card?
- 6y ago
- im3w1l 6y agoIt's the silicon valley game they are playing. Cost no money, offer no support.
- WalterBright 6y agoGoing through my bank statements at tax time, I noticed a weird check for $80 that was unaccounted for. Getting the check image, it was: 1. Not my name for the payer 2. An out-of-state address 3. Check was not on my bank's paper, they did the logo wrong, etc. 4. Signature was someone else's Essentially, everything was wrong but the account number. The bank cashed the check, and blamed me. I got very angry about that, and basically sat in the manager's office until he agreed to refund my money. A couple months later, I ran out of blank checks, and went to the bank to order more. They gave me a song-and-dance about the advanced "security paper" for the expensive check blanks they wanted to sell me. I literally laughed, and told them you guys don't check the name, the address, the signature, and certainly not the paper, and walked out and bought more checks from an online company.
- orf 6y agoStill using checks is the problem here.
- WalterBright 6y agoSee my other posts on this topic :-/ Also, the image of the bad check was what got my money refunded. An electronic trail is simply not as good as a paper one when there's a dispute. A cancelled check is gold in a dispute.
- orf 6y agoHow does the rest of the world manage disputes fine without using a paper slip as proof? The fact “bad checks” can exist is the problem, which necessitates the use of a literal paper trail.
- gallego2007 6y agoCan’t upvote this enough! Checks should have been done away with long ago, but I guess some landlords still like to cash them in-person...
- 6y ago
- thatjamesdude 6y agoThat's side stepping the real problem very neatly though. Speaking as a citizen of a country with "real" identification laws, how would you like the banks to identify you? SSN? Absolutely not. That number is not meant to be used as formal identification, it's completely unprotected. America has a particular weakness to identify fraud because you don't have an identity system. My ID number is formally defined in law, protected and verified by various check sums built into the number (like so many tokens out there). Banks are required, by law, to ensure they have identified the right individual before transacting and they carry the full burden if they get it wrong. The SSN in the US is sequential and I never fail to laugh at the idea of forcing your banks to verify you with such a flimsy structure. It's just gonna make the problem worse
- ryandrake 6y agoMaybe we should be going back to local banks, personal relationships and a real-life web of trust? I remember long time ago when you could get a bank account without any identification at all. The bank tellers knew you by name from talking to you at the grocery store. The bank manager hunts with you. The owner of the bank has seen you on the local golf course. These days, you're CUSTOMER #52219945 at SuperUltraMegaBank with such-and-such mother's maiden name. The local bank employees live 80 miles away where there are cheaper houses, and to them you're just one of thousands of customers in their corporate database. But, you never even see each other because almost all of the banking you do is via their web site, with the occasional telephone call that gets answered by a teller in southeast Asia. It's totally impersonal.