# Re: Why Blockbuster looks at your ID.

```Jerrold Leichter wrote:

```
```| > Credit card fraud has gone *down* since 1992, and is actually falling:
| >
| > 1992:  \$2.6B
| > 2003:  \$882M
| > 2004:  \$788M
| >
| > We're on the order of 4.7 cents on the \$100.
| >
| >
| >
The article also mentions that the loss rate for 1992 was 15.7 cents per \$100.```
```
Something doesn't add up.  Combining the dollar values above with the loss
rate per \$100, I calculate that the total charges handled in 1992 was about
\$165 billion - which seems a bit low, but reasonable.  However, the
corresponding calculation for 2004 shows a total charges of about \$16 billion,
which is clearly nonsense.

I don't actually see the \$2.6B figure anywhere in the article.  Where did it
come from?

```
I did the math. 15.7 / 4.7 ~= 3.34. 3.34 * \$778M = \$2.6B. There's a problem here, but I'll get to it in a sec.
```
Hmm...lets verify the rest of this:

```
4.7 cents per 100 is 0.047 dollars per 100 dollars is 0.00047 dollars per dollar.
```
x * 0.00047 = \$778M

x = \$778M / 0.00047
x = 1655319M = 1.65T

```
Looking at Federal Reserve data ( http://www.federalreserve.gov/releases/g19/Current/g19.htm ), there was about \$2T in overall consumer credit. I can envision the vast majority, but not all of this being on plastic. So, \$1.65T works.
```
```
If you try to repeat this for 1992, though, you'll find an interesting bug...total transactions in 1992 were also about 1.65T. Gee, it's almost like I assumed credit card usage rates were constant over the 12 year period...oops :) But then there's inflation, which alters dollar figures substantially. So oops in the other direction.
```
```
The fundamental point stands, though...credit fraud has been managed surprisingly well (though some people have said fraud is understated by ~~200%).
```
--Dan

---------------------------------------------------------------------
The Cryptography Mailing List
Unsubscribe by sending "unsubscribe cryptography" to [EMAIL PROTECTED]
```