Thursday, July 21, 2005

Moraltiy of banks?

Banks have little incentive to reform the system as long as merchants are the ones who really foot the bill for credit card fraud. "One thing you don't mention and the public is not aware of is that the reason the card companies aren't notifying consumers -- unless fraud occurs -- is that as long as those cards are in circulation the card companies are making a fortune," an online merchant wrote me. "If the card is used fraudulently the one that pays for it is the merchant who accepts the card. He has the money yanked out of his bank account along with a chargeback fee of anywhere between $25 to $40. Plus he has lost his merchandise, shipping fees and the percentage he pays to the card company for the sale. So they do not have any incentive to do anything about it. If the card companies had to eat these costs themselves, they would move pretty quickly to rectify the situation. Remember, when the merchant accepts the card he has been informed that the card and the sale are good. We need for the government to step in and get some kind of control over them. The merchant should not be penalized when he has been told that the card is good when all the time the card company already knows the information has been stolen."

I don't know why I want to work for these people.

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