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The problem with internet fraud is that no one is really trying to make the fraudsters accountable for their actions, instead what they’re doing is essentially

The problem with internet fraud is that no one is really trying to make the fraudsters accountable for their actions, instead what they’re doing is essentially “shoo’ing them away”, and fraudsters after being shoo’ed away simply try again until they, almost invariably, eventually do succeed. Subsequently, the industry of fraud is generally lucrative and is thus constantly growing. When I worked at Blizzard, there were many mechanisms in place to spot fraudulent credit card transactions and cancel them before they actually billed the card holder, but there was no process for reporting the fraudsters to prevent them doing the same thing again tomorrow. This is probably the same strategy that every company does, because there is no practical action any company can do to try make fraudsters accountable and thus discourage them from simply trying again. So the problem of fraud is getting ever bigger and increasingly unmanageable and out of control. The problem is a non-trivial political one, governments need to create task forces to work to reduce the size of the fraud industry, perhaps by catching fraudsters and making them accountable. The problem is even harder than simple political will though, because it’s cross jurisdictional, meaning governments of different countries all need to work together on this. This may seem impossible at the moment, but I believe until it is achieved fraud is only going to get increasingly worse.

itake 3y ago
and the companies have no incentive to investigate fraud further once it has stopped, especially if they fraudsters are international.
palmfacehn 3y ago
From the article: >And if I ask who do I trust more, my local reputable electronics shop (Memory Express, B&H Photo, etc.), I trust my local reputable electronics shop more. Not only are they less likely to sell me a counterfeit than Best Buy, in the event that they do sell me a counterfeit, the service is likely to be better. An international, multi-government taskforce is one solution, potentially. Maybe not. For the problem presented at the top of the article, shopping locally seems like an easy win in comparison.
- nradov 3y ago
  An international, multi-goverment task force is no solution for the routine wire fraud that impacts most consumers. Due to corruption, incompetence, and political disputes, the countries where most of that fraud originates won't participate in a meaningful way.
withinboredom 3y ago
I think we don't hold them accountable for the same reason we generally accept panhandlers (which is usually technically illegal in most jurisdictions). If we hold them accountable, where do we send them? Jail? Does that actually fix the problem, or does it just hide it under a societal rug?
bongodongobob 3y ago
Well what can you do? Trace their IP back to a VPN or web of proxies? Or more likely grandmas infected Windows XP computer? Then what? Start kicking doors down? Going to get the FBI involved for a $20 purchase? Reminds me of Lebowski asking the cops about his Credence tape.
- godelski 3y ago
  > Going to get the FBI involved for a $20 purchase? Sure, why not? And if you're at the scale is Blizzard I'm sure it's a lot more than $20. We're collecting all kinds of information these days. Surveillance capitalism is a common term for it. Data is gold they say. So why not give that data to people that can use it to stop crime?
  - golergka 3y ago
    Because they're in Russia or North Korea, and their bosses bosses are good friends of local police and secret services. What exactly can FBI do about them?
    - godelski 3y ago
      Well I guess to be fair it would be a matter of Homeland Security. Either way, there are agencies who's directives are about dealing with international fraud. Global commerce comes with global agreements. 1) There's certainly cards coming from non completely sanctioned countries. This means legal pathways. 2) If fraud is prevalent and these numbers can be tracked it makes for better policy decisions. It's not uncommon knowledge that we don't have the best privacy and security. This is at least ammo to do something about it.
  - bongodongobob 3y ago
    Blizzard doesn't get paid for reporting fraud. They lose money. So what's the incentive for them to give a damn? They'll just push it back to the CC companies to deal with, if anything.
    - 3y ago
godelski 3y ago
This is why I have a problem with a lot of the legal structure and incentives. If you measure in number of arrests you aren't solving the problems. I'm not sure there's any good metric to measure that. To take an analogy I'll mention the drug war. The main target was always low level drug dealers and users. They're easy to arrest and easy to say you're doing something. But they are fairly inconsequential to the business of selling drugs and thus the availability on the streets. But it's orders of magnitude harder to go after the root of the problem. I don't want to detract this conversation with the other aspects or conspiracies (real or contrived), but just focus on the incentive structures. I think the same is here. Blizzard gets no short term reward for reporting fraudulent activity. It's hard to know if they get long term. But at the end of the day it would be the right thing to do. That's what matters. Doing the right thing. Move fast and break things it's a great strategy. But it can't be used in isolation. If it is you're left with a trail of destruction which never gets cleaned up. It's hard to quantify objectives and so every objective function is misaligned. You need to rely on humans to see through that and correct the course as best they can. You need both the people pushing to move fast and the people pushing to slow down and repair. There's a harmony in that competition. Pick your camp but recognize that there's value in the other one too.
- Anotheroneagain 3y ago
  I don't think so, on the contrary, they ignore the dealers in vain hope to catch some "big fish", but there are no big fishes there.
  - godelski 3y ago
    I find that a strange comparison. Certainly there are bigger fish to fry. In both drugs and credit cards there is a whole ecosystem. Cards probably more straight forward as these are typically being sold on websites and you thus have a clear marketplace. Which I'd differentiate a marketplace from a dealer on a corner. Go after the people who are the generators. That's people making the drugs or people stealing the cards in the first place. What do you mean there's no "big fish." If we're going to use a fish analogy it's not the size I care about, but the type.
Nextgrid 3y ago
> The problem is a non-trivial political one It's even less trivial when corporation-on-consumer fraud has been normalized (see dark patterns, or companies outright taking money for no/sub-par service). Suddenly starting to prosecute fraud would inconvenience some deep-pocketed entities.
hnben 3y ago
> but there was no process for reporting the fraudsters what would be good incentives to make companies like blizzard start reporting fraudsters? I am thinking along the line: companies can pay $X to make a report, and will receive $X5 if that reports leads to a fine. And they have to pay additional $X10 if that reports turns out to be frivolous. (If the report appears to be valid, but doesn't result in a fine, than they get no payoff). My worry is that bad incentives would lead to over-reporting or some other bad thing.
- rjmunro 3y ago
  > what would be good incentives to make companies like blizzard start reporting fraudsters? Having someone to report them to?

itake 3y ago

and the companies have no incentive to investigate fraud further once it has stopped, especially if they fraudsters are international.

palmfacehn 3y ago

From the article: >And if I ask who do I trust more, my local reputable electronics shop (Memory Express, B&H Photo, etc.), I trust my local reputable electronics shop more. Not only are they less likely to sell me a counterfeit than Best Buy, in the event that they do sell me a counterfeit, the service is likely to be better. An international, multi-government taskforce is one solution, potentially. Maybe not. For the problem presented at the top of the article, shopping locally seems like an easy win in comparison.

nradov 3y ago
An international, multi-goverment task force is no solution for the routine wire fraud that impacts most consumers. Due to corruption, incompetence, and political disputes, the countries where most of that fraud originates won't participate in a meaningful way.

withinboredom 3y ago

I think we don't hold them accountable for the same reason we generally accept panhandlers (which is usually technically illegal in most jurisdictions). If we hold them accountable, where do we send them? Jail? Does that actually fix the problem, or does it just hide it under a societal rug?

bongodongobob 3y ago

Well what can you do? Trace their IP back to a VPN or web of proxies? Or more likely grandmas infected Windows XP computer? Then what? Start kicking doors down? Going to get the FBI involved for a $20 purchase? Reminds me of Lebowski asking the cops about his Credence tape.

godelski 3y ago
> Going to get the FBI involved for a $20 purchase? Sure, why not? And if you're at the scale is Blizzard I'm sure it's a lot more than $20. We're collecting all kinds of information these days. Surveillance capitalism is a common term for it. Data is gold they say. So why not give that data to people that can use it to stop crime?
- golergka 3y ago
  Because they're in Russia or North Korea, and their bosses bosses are good friends of local police and secret services. What exactly can FBI do about them?
  - godelski 3y ago
    Well I guess to be fair it would be a matter of Homeland Security. Either way, there are agencies who's directives are about dealing with international fraud. Global commerce comes with global agreements. 1) There's certainly cards coming from non completely sanctioned countries. This means legal pathways. 2) If fraud is prevalent and these numbers can be tracked it makes for better policy decisions. It's not uncommon knowledge that we don't have the best privacy and security. This is at least ammo to do something about it.
- bongodongobob 3y ago
  Blizzard doesn't get paid for reporting fraud. They lose money. So what's the incentive for them to give a damn? They'll just push it back to the CC companies to deal with, if anything.
  - 3y ago

godelski 3y ago

This is why I have a problem with a lot of the legal structure and incentives. If you measure in number of arrests you aren't solving the problems. I'm not sure there's any good metric to measure that. To take an analogy I'll mention the drug war. The main target was always low level drug dealers and users. They're easy to arrest and easy to say you're doing something. But they are fairly inconsequential to the business of selling drugs and thus the availability on the streets. But it's orders of magnitude harder to go after the root of the problem. I don't want to detract this conversation with the other aspects or conspiracies (real or contrived), but just focus on the incentive structures. I think the same is here. Blizzard gets no short term reward for reporting fraudulent activity. It's hard to know if they get long term. But at the end of the day it would be the right thing to do. That's what matters. Doing the right thing. Move fast and break things it's a great strategy. But it can't be used in isolation. If it is you're left with a trail of destruction which never gets cleaned up. It's hard to quantify objectives and so every objective function is misaligned. You need to rely on humans to see through that and correct the course as best they can. You need both the people pushing to move fast and the people pushing to slow down and repair. There's a harmony in that competition. Pick your camp but recognize that there's value in the other one too.

Anotheroneagain 3y ago
I don't think so, on the contrary, they ignore the dealers in vain hope to catch some "big fish", but there are no big fishes there.
- godelski 3y ago
  I find that a strange comparison. Certainly there are bigger fish to fry. In both drugs and credit cards there is a whole ecosystem. Cards probably more straight forward as these are typically being sold on websites and you thus have a clear marketplace. Which I'd differentiate a marketplace from a dealer on a corner. Go after the people who are the generators. That's people making the drugs or people stealing the cards in the first place. What do you mean there's no "big fish." If we're going to use a fish analogy it's not the size I care about, but the type.

Nextgrid 3y ago

> The problem is a non-trivial political one It's even less trivial when corporation-on-consumer fraud has been normalized (see dark patterns, or companies outright taking money for no/sub-par service). Suddenly starting to prosecute fraud would inconvenience some deep-pocketed entities.

hnben 3y ago

> but there was no process for reporting the fraudsters what would be good incentives to make companies like blizzard start reporting fraudsters? I am thinking along the line: companies can pay $X to make a report, and will receive $X5 if that reports leads to a fine. And they have to pay additional $X10 if that reports turns out to be frivolous. (If the report appears to be valid, but doesn't result in a fine, than they get no payoff). My worry is that bad incentives would lead to over-reporting or some other bad thing.

rjmunro 3y ago
> what would be good incentives to make companies like blizzard start reporting fraudsters? Having someone to report them to?