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Comment by sillysaurus3 | Hacker News Reader

Any malicious actor who gets that number can then use it to extract money from your card. Sure, it's probably FDIC insured, but they still make out with some of your money.

Actually, you lose none of your money. The credit card company completely refunds you. Someone once stole my card and got some gas with it, and the next day I got the transaction refunded and a new card issued within 10 minutes.

Bitcoin is far less secure than a credit card. The best way to lose thousands of dollars is to invest it into bitcoin and then trust any webservice to hold onto your coins for you. It's what happened to me. If I had experienced credit card fraud instead of bitcoin fraud, I'd still have my money. Now I don't.

What you're describing is security for a merchant. Preventing chargebacks sounds great... for merchants. But security for consumers is obviously more important, because consumer adoption is the single most important factor.

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When I say "they make out with some fo your money" I meant the bank's money.

Considering that every restaurant, store or bar you've ever used your card at potentially stashed away your secret, how closely have you been monitoring your card for siphoning of funds?

It is not in the credit card companies best interest to even acknowledge this type of theft, because they have no way except machine learning to protect you from it.

On the other hand, it IS useful for them to acknowledge huge security breaches at corporations, because they can point to them and say: and look at how we protected you! (after their dumb security system endangered you in the first place)

how closely have you been monitoring your card for siphoning of funds?

Closely. In fact, I get an email every time a transaction is made. Any fraud would be detected immediately: an email would arrive saying I've been charged, and I'd call up the credit card company and get it refunded in 10 minutes. So it seems to me that siphoning of funds from my credit card can't happen.

I needed protection from bitcoin fraud, not credit card fraud. The best thing for the bitcoin ecosystem would be to learn from credit card companies rather than villify them.

Also, people go to prison for many years for credit card fraud, whereas the legal system is still adjusting to bitcoin. I haven't heard of any bitcoin-related prosecutions yet. So bitcoin fraud is far less risky.

There's only 30 or so charges on my CC bill for the whole month. It's an online PDF I have to access in order to see how much I owe, so skimming it is both easy and convenient.

Given that a restaurant would face serious problems if they did this, it seems both low risk and not too hard to monitor.

"Machine learning" and other techniques have actually been pretty effective at reducing card fraud in recent years -- an overall loss of just 0.07%.

And this is all done with a system that is very convenient for consumers to use correctly for everyday use, without significant risk of a total loss due to getting hacked or having their password or other security factors compromised.

Source: http://en.wikipedia.org/wiki/Credit_card_fraud

>an overall loss of just 0.07%.

No, that's only the direct loss for credit card issuers.

It's not surprising that the companies that control the system limit their own losses as much as they can, by passing on the costs to others. The losses to merchants, etc are far greater.

In fact that figure understates even the card issuers' total losses, because it doesn't include billions of dollars in "fraud solutions expense, IT, staffing, outsourcing, and outside data/investigation expenses"

The report from which 0.07% was taken indicates immediate losses that are about 15x higher. In other words, around 1%

The report makes it extremely clear that the 0.07% figure is a severe underestimate of the real costs. In fact, that is really the main topic of the report. It's unfortunate that all that research has been ignored and the almost meaningless number has been cherry picked for Wikipedia.

Link to the report (PDF) which is the source of the 0.07% figure: http://web.archive.org/web/20091229101826/http://www.sas.com...

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