[TriLUG] OT: lack of security at BofA

[Aaron Joyner]

Don't forget that a solid portion of the fraud costs get pushed onto the
merchant, rather than the bank.  If you wish to learn more, read about
"chargebacks".  One view is that it's reasonable if you consider that the
merchant has the best chance of evaluating the person in the store for
fraud, and putting a large portion of the liability at their feet
encourages them to be vigilant, such as requiring the card to  be present,
asking for ID, comparing signatures, considering if you appear nervous or
shady.. all the things you'd expect if they were taking a paper IOU.  For
those of us who frequently use plastic for purchases (likely everyone who
will ever read this), most merchants are not particularly vigilant, because
they do not encounter enough fraud to warrant it.

In the big picture, the payments market has essentially solved this problem
by using "big data" analysis techniques to keep those trying to game the
system from being successful repetitively, or with a high rate, and writing
off the minor amount of fraud that slips through that system, in the name
of making the economic wheels roll as smoothly as possible for every
legitimate transaction.

Aaron S. Joyner


On Sun, Dec 21, 2014 at 7:53 PM, Joseph Mack NA3T <jmack at austintek.com>
wrote:
>
> On Sun, 21 Dec 2014, Pete Soper wrote:
>
>   They make it a bit hard to use, but overall my wife and I have found the
>> virtual credit card mechanism Citibank VISA offers to be a huge asset.
>>
>
> Thanks. Had never heard of these. BofA has them too is seems but you have
> to do it via on-line banking. I tried on-line banking when BofA first
> brought it out, but the website was so dodgy, I couldn't believe anything
> there would be secure. When I found out I was liable for anything that went
> wrong (eg fraud) through that interface, I discontinued using it.
>
> I read about these cards on the AARP website
>
> http://www.aarp.org/money/credit-loans-debt/info-2014/
> virtual-credit-cards-not-catching-on.1.html
>
> People don't like them because they're inconvenient and they have no
> liability for fraud with the regular cards, so there's no apparent benefit.
> It seems when the chip and pin cards come in that the liability for fraud
> is going to be shifted to the user (see wikipedia for the EMV cards), since
> it's "impossible" to commit fraud with them and any problems are therefore
> due to the users.
>
> I find that there is 18G$ of credit card fraud a year
>
> http://www.aarp.org/money/credit-loans-debt/info-2014/
> virtual-credit-cards-not-catching-on.3.html
>
> That's about $100 a person. At 2% fees, that requires everyone to be doing
> 5k$ of transactions a year before the banks start earning money
>
> Joe
>
>
> --
> Joseph Mack NA3T EME(B,D), FM05lw North Carolina
> jmack (at) austintek (dot) com - azimuthal equidistant
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