At 08:23 PM 5/11/2002 -0400, you wrote: >On Tue, Apr 30, 2002 at 09:20:32PM -0400, Steve Furlong wrote: > > And most of the sheeple _like_ it. They'd rather be safe than free. For > > every complaint I've heard about having to reassure the bank that the > > card wasn't stolen, I've heard a couple dozen praises for the wonderful > > safe system that takes care of its members. > >I'm a bit late here, but let me rise to the defense of profiling of this >sort. The reason we have interest rates on credit cards which are not >far higher than they are now and have ready availability of credit in the >first place (not to mention credit cards being accepted nearly everywhere) >is anti-fraud measures like automated profiling. In other words, it's >something that benefits the consumer by keeping costs down.
I don't agree. I worked at Citicorp for quite a few years. On several projects we did risk analysis. At the beginning I, like you, thought consumer fraud was a major component of risk for the bank. This turned out not to be the case. The largest risk, by far, is consumers just refusing to pay. (Think NextCard.) The next highest risk are bad merchants scamming the bank. Consumer fraud risks, including authenticating the card holder/presenter was a distant 3rd. This may have changed with the Internet and the increase in identity theft. If you have recent creditable data, say from ABA, to support your contention I'd like to see it. steve
