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I mostly agree with you that banks are hiding their victim status but I think your framing is too intense. The magical idea of identity as an intangible self is

I mostly agree with you that banks are hiding their victim status but I think your framing is too intense. The magical idea of identity as an intangible self isn’t helpful. It is bank fraud and imitation with the intent to abuse the reputation of the person imitated. It should be illegal to imitate you when it negatively hurts you. It’s illegal to imitate police and doctors etc because it uses their reputations for fraudulent means. This is the same thing. Banks are the financially defrauded victims in this situation, but the victims are also individuals because banks passed the reputational risk of fraud to the customers. If your credit score is hurt and you need to hire lawyers to fix it or you get denied for a mortgage (or just a good rate), you’ve experienced tangible harm. Banks know they experience harm here. They plan for it. It’s baked into the prices and financial statements. Read the essays by Patrick McKenzie, he’ll argue that fraud is intentionally tolerated. They know that the consumer won’t be expected pay once the fraud is discovered. That’s not their goal, and they’re not being deceitful here. You can argue if this system is overall good or bad, but it almost certainly has led to cheaper credit for everyone. Outsourcing credit worthiness to a magic national number (or 3) is cheaper than every credit union assessing risk themselves, with less knowledge.

oxygen_crisis 3y ago
> the victims are also individuals because banks passed the reputational risk of fraud to the customers In that case I am not a victim of the fraudster, I am a victim of the bank. The banks do not have sufficient incentive to improve their identification methods, so long as we tolerate the concept that we bear any responsibility for a transaction that involves only themselves and a fraudster who knows the answers to a few trivia questions about me.
- true_religion 3y ago
  It’s like defamation. If someone goes and spreads a bunch of terrible lies about you by pretending to be you… then you are their victim. You’re not the victim of people who merely believe the lies and start to avoid you.
  - ethanwillis 3y ago
    That's not a good analogy. If those people believe the fraudster and give them something.. I'm not liable for whatever they gave that person. You're leaving out the most important part. Avoiding != Requiring something.
    - true_religion 3y ago
      I think I was focusing on the fact that identity fraud ruins your credit score, so you can’t get loans and the such for yourself. To me that was akin to being ostracized because your reputation was ruined by an impersonation.
    - HWR_14 3y ago
      But most victims of identity theft don't have to repay the loans. They just have ruined credit scores. So I think it's an excellent analogy
      - deleted 3y ago
        [deleted]
- vineyardmike 3y ago
  > The banks do not have sufficient incentive to improve their identification methods On the contrary, they stand to risk 100% of the loaned money. What more could be at risk. Also the fair credit reporting act has pretty strict requirements for what a bank or credit agency should do when you’ve told them the debt is fraudulent, returning you to whole eventual. What would be required to fix false identity frauds? Is that more or less tolerable for society than X% of people dealing with a stolen identity. What about people who have some problematic history (ran away from home, prior homeless, etc)? How would strict requirements impact them? Really I guess my question. Oxygen_crisis, why do you believe identity theft is actually a problem that needs solving?
ifyoubuildit 3y ago
> It is bank fraud and imitation with the intent to abuse the reputation of the person imitated. It should be illegal to imitate you when it negatively hurts you. I think the argument is that the hurt is generated by the bank. Why isn't it the bank's responsibility to have their shit together and not do that?
krupan 3y ago
You are not wrong at all. There is a certain level of fraud tolerated by banks so that they can more easily make loans to people. It's the classic security vs. convenience trade-off. Two big problems are: 1. If you happen to be one of the victims of the fraud, it hurts! Sometimes a lot! A lot more than it hurts the bank. 2. If you don't like the level of (in)security that the banks have chosen, what other options do you have? Right now I don't know, I think maybe Bitcoin is your best bet?
- emodendroket 3y ago
  Even if I pretend for a minute to seriously believe Bitcoin is less susceptible to fraud, using a different financial product doesn't help since the entire fraud takes place without your participation in many cases. They can just as well open credit lines with banks you don't use as ones you do.
- HWR_14 3y ago
  I don't see how bitcoin changes much, other than you have to convince CoinBase that it wasn't your identity. Bitcoin specifically tries to avoid being tied to identity.
- ffhhttt 3y ago
  > Bitcoin is your best bet? Because nobody can take out a fraudulent loan in bitcoin? Well.. that’s problem accurate. I’m just not sure how is bitcoin even the tiniest bit relevant in this case?
emodendroket 3y ago
It might generate even cheaper credit if the banks were allowed to randomly seize your assets whenever they felt like it with no justification whatever, so long as you weren't one of the unlucky targets.
prawn 3y ago
There seem to be stories in these comments that leave consumers as victims without there being any intentional imitation. e.g., the five year old child getting mortgage payment demands. Or the person struggling to get a mortgage because of someone else with the same name but different age.

oxygen_crisis 3y ago

> the victims are also individuals because banks passed the reputational risk of fraud to the customers In that case I am not a victim of the fraudster, I am a victim of the bank. The banks do not have sufficient incentive to improve their identification methods, so long as we tolerate the concept that we bear any responsibility for a transaction that involves only themselves and a fraudster who knows the answers to a few trivia questions about me.

true_religion 3y ago
It’s like defamation. If someone goes and spreads a bunch of terrible lies about you by pretending to be you… then you are their victim. You’re not the victim of people who merely believe the lies and start to avoid you.
- ethanwillis 3y ago
  That's not a good analogy. If those people believe the fraudster and give them something.. I'm not liable for whatever they gave that person. You're leaving out the most important part. Avoiding != Requiring something.
  - true_religion 3y ago
    I think I was focusing on the fact that identity fraud ruins your credit score, so you can’t get loans and the such for yourself. To me that was akin to being ostracized because your reputation was ruined by an impersonation.
  - HWR_14 3y ago
    But most victims of identity theft don't have to repay the loans. They just have ruined credit scores. So I think it's an excellent analogy
    - deleted 3y ago
      [deleted]
vineyardmike 3y ago
> The banks do not have sufficient incentive to improve their identification methods On the contrary, they stand to risk 100% of the loaned money. What more could be at risk. Also the fair credit reporting act has pretty strict requirements for what a bank or credit agency should do when you’ve told them the debt is fraudulent, returning you to whole eventual. What would be required to fix false identity frauds? Is that more or less tolerable for society than X% of people dealing with a stolen identity. What about people who have some problematic history (ran away from home, prior homeless, etc)? How would strict requirements impact them? Really I guess my question. Oxygen_crisis, why do you believe identity theft is actually a problem that needs solving?

ifyoubuildit 3y ago

> It is bank fraud and imitation with the intent to abuse the reputation of the person imitated. It should be illegal to imitate you when it negatively hurts you. I think the argument is that the hurt is generated by the bank. Why isn't it the bank's responsibility to have their shit together and not do that?

krupan 3y ago

You are not wrong at all. There is a certain level of fraud tolerated by banks so that they can more easily make loans to people. It's the classic security vs. convenience trade-off. Two big problems are: 1. If you happen to be one of the victims of the fraud, it hurts! Sometimes a lot! A lot more than it hurts the bank. 2. If you don't like the level of (in)security that the banks have chosen, what other options do you have? Right now I don't know, I think maybe Bitcoin is your best bet?

emodendroket 3y ago
Even if I pretend for a minute to seriously believe Bitcoin is less susceptible to fraud, using a different financial product doesn't help since the entire fraud takes place without your participation in many cases. They can just as well open credit lines with banks you don't use as ones you do.
HWR_14 3y ago
I don't see how bitcoin changes much, other than you have to convince CoinBase that it wasn't your identity. Bitcoin specifically tries to avoid being tied to identity.
ffhhttt 3y ago
> Bitcoin is your best bet? Because nobody can take out a fraudulent loan in bitcoin? Well.. that’s problem accurate. I’m just not sure how is bitcoin even the tiniest bit relevant in this case?

emodendroket 3y ago

It might generate even cheaper credit if the banks were allowed to randomly seize your assets whenever they felt like it with no justification whatever, so long as you weren't one of the unlucky targets.

prawn 3y ago

There seem to be stories in these comments that leave consumers as victims without there being any intentional imitation. e.g., the five year old child getting mortgage payment demands. Or the person struggling to get a mortgage because of someone else with the same name but different age.