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The thing to remember here is that where the liability lies matters. The banks effectively take on all the liability for financial losses due to credit card fra
by pja 14y ago
The thing to remember here is that where the liability lies matters. The banks effectively take on all the liability for financial losses due to credit card fraud & they're free to setup their systems to constrain losses to a level that they're happy with. Yes, arguably not all the losses fall on the banks, particularly the hassle and time of recovering from a particular instance of fraud but the majority of them probably do and that's what matters because the interests of those who bear the losses and those who run the system are aligned.
The trouble with cloud systems is that all the losses fall on the end user who has no influence over the security systems put in place to protect their data. (Except with Google where you can at least choose to use 2-factor authentication.)
- maxerickson 14y agoBanks are experts at pushing financial liability onto others. Much of the time, credit card companies inform the merchant that they aren't going to pay for a transaction that they have deemed fraudulent. The merchant can chase the fraud themselves or eat the loss. The fact that 'identity theft' is a commonly used name for bank fraud is another example. When some bank opens an account for person Y, there should be zero consequences for person X (regardless of any fraud committed by Y), but the banking system isn't quite set up that way.