From: dlv@bwalk.dm.com (Dr.Dimitri Vulis KOTM)
Date: Sat, 29 Nov 1997 13:31:44 +0800
To: cypherpunks@toad.com
Subject: Re: --- STRONG ADULT CONTENT ---
In-Reply-To: <199711290225.UAA13753@wire.insync.net>
Message-ID: <N6Xwge44w165w@bwalk.dm.com>
MIME-Version: 1.0
Content-Type: text/plain



Eric Cordian <emc@wire.insync.net> writes:
>
> > This is one thing I have never understood about the greate concern users
> > have over their CC #'s. If ,as Eric points out , the upstream provider
> > goes Cristmas shopping on your Mastercard it is not the user who is out
> > the money! The person who gets stuck with the bill is the Vendors who sell
> > products to someone who is not authorized to use your card.
>
> Actually, it's the credit card issuer who eats it.  The issuer guarantees
> the merchant payment as long as the charge is approved at the point of
> sale. This is why merchants almost never care who or what presents the
> card, as long as the card is valid.
>
> The actual owner of the card is also protected against having to pay
> fradulent charges, as long as he informs the card company in a timely
> manner if the card is lost, stolen, or misused.

of course the credit card issuers do this not out of the goodness of their
heart but because they're required to by the US gubmint. It's not at all
clear if they have to eat the fraudulent charges if the card holder hasn't
been following the issuer's instructions.

> The cost of guaranteeing any valid card is as good as cash to the
> merchant, and holding the consumer harmless for fraud, is born through
> fees and interest on card balances, and merchant fees for processing
> credit card transactions.
>
> Of course, the attitude of "why should I care if my card is used
> fradulently, I won't have to pay" raises credit card costs to everyone, as
> the card companies simply recycle the added expense back to their
> customers.
>
> You may recall a recent news story in which someone collected a huge
> number of credit card numbers from a major vendor doing business on the
> Net, and attempted to market them.

Actually, if you call up your credit card issuer and ask, hypothetically,
what would happen if you transmitted your credit card info over the Internet,
and someone got hold of them, and charged lots of money. Don't assume
that they have to eat it.

---

Dr.Dimitri Vulis KOTM
Brighton Beach Boardwalk BBS, Forest Hills, N.Y.: +1-718-261-2013, 14.4Kbps