Phishing
My third Wired column is on line. It’s about phishing.
Financial companies have until now avoided taking on phishers in a serious way, because it’s cheaper and simpler to pay the costs of fraud. That’s unacceptable, however, because consumers who fall prey to these scams pay a price that goes beyond financial losses, in inconvenience, stress and, in some cases, blots on their credit reports that are hard to eradicate. As a result, lawmakers need to do more than create new punishments for wrongdoers—they need to create tough new incentives that will effectively force financial companies to change the status quo and improve the way they protect their customers’ assets.
EDITED TO ADD: There’s a discussion on Slashdot.
probitas • October 6, 2005 8:42 AM
Great points, Bruce, but the problem with legislating that responsibility over to the financial institutions is that corporations have lobbyists who write the laws on their behalf and cadres of lawyers who find the loopholes. So once the law is signed and the politocos are finished patting themselves on the back for doing such a fine job of protecting us, we end up with a zero sum gain for the victims.
I think the most effective path to the result you seek is to encourage a bank to adopt these measures as a customer service tool. “We will help restore your record as a way to earn your business” provides the incentive to the banks to protect against it in the first place, and gains them additional clients to help offset the cost.