3 ms·

"Easy" fix here - don't allow banks to claw back any cash that they've made available for use. Nobody will tolerate "you have to wait 60 days for this check to

by pc86 3y ago

"Easy" fix here - don't allow banks to claw back any cash that they've made available for use. Nobody will tolerate "you have to wait 60 days for this check to be available" so the problem will fix itself in short order. Banks are incentivized to make money available basically immediately because there is very little risk to them if it turns out to be fraudulent. And they're the only ones that can fix the infrastructure to clean this up. You move the liability from the blue collar worker cashing a check for $50 to the multi-national billion dollar corporation and it gets fixed pretty quickly.

ianburrell 3y ago
The funds are available in a day or three. There is a big difference between cleared and reversing fraudulent transaction. Are you requiring people to check their statements every week to find fraudulent transfers? Are people who go on vacation screwed? How do you handle instantaneous transfers when the funds are available in seconds? For example, someone asks to use your phone and you foolishly give it to them. They make a bank transfer when you aren't looking. With instantaneous transfer, you are screwed caused the funds are already available and fraud report isn't allow. It might be possible to make the banks responsible for fraudulent transactions since they are ones that can do the verification.
- pc86 3y ago
  The onus is already on individuals to find fraudulent transactions and report them. If my CC gets a fraudulent charge and I don't see it, and it doesn't trigger the bank's anti-fraud logic, it will just get paid. Your example doesn't really work because for this to happen not only would I need to give this person my phone, I'd need to give it to them with my banking app open and the screen unlocked. At that point it's not a fraudulent transaction.
  - aidenn0 3y ago
    > The onus is already on individuals to find fraudulent transactions and report them. If my CC gets a fraudulent charge and I don't see it, and it doesn't trigger the bank's anti-fraud logic, it will just get paid. Right, but if I find it 60 days later when I balance my registry, then the CC company refunds me the money.
aidenn0 3y ago
IIRC the banks in the US had to be forced (by law) to make the funds available in 24 hours. That doesn't mesh with what you have said at all. [edit] Also, the banks really would rather not be loaning their customers money interest-free (which is what happens when they make funds available prior to fraud checks finishing). I think you have the incentives completely wrong.
- pc86 3y ago
  If both you and your competitor bank can come back 90 days later to withdraw fraudulent funds, you can advertise that your deposits are available immediately while theirs aren't. What is the risk to you? You can just pull the money back. There is no technological roadblock from verifying within seconds that a) a bank account exists with the given account and routing number; b) it is associated with the name on the check being deposited; c) it has available funds to cover the balance of the check. As it stands the banks give you the money as soon as its deposited (or very shortly thereafter), but that's no risk to them. They can come back and get it whenever should they need to. If you didn't allow them to do that, we'd have the infrastructure for instantaneous fraud checks/balance verification nearly overnight.
  - aidenn0 3y ago
    > If both you and your competitor bank can come back 90 days later to withdraw fraudulent funds, you can advertise that your deposits are available immediately while theirs aren't. What is the risk to you? You can just pull the money back. The risk is insufficient funds in the account to cover the deficit > There is no technological roadblock from verifying within seconds that a) a bank account exists with the given account and routing number; b) it is associated with the name on the check being deposited; c) it has available funds to cover the balance of the check. As it stands the banks give you the money as soon as its deposited (or very shortly thereafter), but that's no risk to them. They can come back and get it whenever should they need to. You missed "d) was printed by a forger with otherwise valid information"

by pc86 3y ago

ianburrell 3y ago

The funds are available in a day or three. There is a big difference between cleared and reversing fraudulent transaction. Are you requiring people to check their statements every week to find fraudulent transfers? Are people who go on vacation screwed? How do you handle instantaneous transfers when the funds are available in seconds? For example, someone asks to use your phone and you foolishly give it to them. They make a bank transfer when you aren't looking. With instantaneous transfer, you are screwed caused the funds are already available and fraud report isn't allow. It might be possible to make the banks responsible for fraudulent transactions since they are ones that can do the verification.

pc86 3y ago
The onus is already on individuals to find fraudulent transactions and report them. If my CC gets a fraudulent charge and I don't see it, and it doesn't trigger the bank's anti-fraud logic, it will just get paid. Your example doesn't really work because for this to happen not only would I need to give this person my phone, I'd need to give it to them with my banking app open and the screen unlocked. At that point it's not a fraudulent transaction.
- aidenn0 3y ago
  > The onus is already on individuals to find fraudulent transactions and report them. If my CC gets a fraudulent charge and I don't see it, and it doesn't trigger the bank's anti-fraud logic, it will just get paid. Right, but if I find it 60 days later when I balance my registry, then the CC company refunds me the money.

aidenn0 3y ago

IIRC the banks in the US had to be forced (by law) to make the funds available in 24 hours. That doesn't mesh with what you have said at all. [edit] Also, the banks really would rather not be loaning their customers money interest-free (which is what happens when they make funds available prior to fraud checks finishing). I think you have the incentives completely wrong.

pc86 3y ago
If both you and your competitor bank can come back 90 days later to withdraw fraudulent funds, you can advertise that your deposits are available immediately while theirs aren't. What is the risk to you? You can just pull the money back. There is no technological roadblock from verifying within seconds that a) a bank account exists with the given account and routing number; b) it is associated with the name on the check being deposited; c) it has available funds to cover the balance of the check. As it stands the banks give you the money as soon as its deposited (or very shortly thereafter), but that's no risk to them. They can come back and get it whenever should they need to. If you didn't allow them to do that, we'd have the infrastructure for instantaneous fraud checks/balance verification nearly overnight.
- aidenn0 3y ago
  > If both you and your competitor bank can come back 90 days later to withdraw fraudulent funds, you can advertise that your deposits are available immediately while theirs aren't. What is the risk to you? You can just pull the money back. The risk is insufficient funds in the account to cover the deficit > There is no technological roadblock from verifying within seconds that a) a bank account exists with the given account and routing number; b) it is associated with the name on the check being deposited; c) it has available funds to cover the balance of the check. As it stands the banks give you the money as soon as its deposited (or very shortly thereafter), but that's no risk to them. They can come back and get it whenever should they need to. You missed "d) was printed by a forger with otherwise valid information"