Tuesday, June 18, 2013

A Real Life Example

I have often written about the many bad results of trying to "protect people from themselves", but today I was handed a great example from real life.

My bank has decided to "get tough" on credit card fraud. As a result, they seem to be finding fraud everywhere. A month ago, I paid my phone bill on the 15th, as I have for six years now, and I received a "fraud prevention" call asking me to confirm that it was valid. I thought it odd and a bit excessive, but worse was to come.

A few weeks later, I noticed pre-orders on amazon started to disappear. I didn't think much of it, but last week, my laptop died and so I ordered one on-line. At the end of the week, Dell called me to tell me the credit card had been declined. Sure enough, a visit to the bank confirmed it was fraud prevention. I asked to opt out of the program, but was told, even if I was willing to accept the risk, I was unable to refuse their protection. Essentially, if I made a big purchase, I was going to get a call. (Except, I never got a call, except from Dell, the bank seemed to just deny me now, without calls.)

So, today Dell contacted me and told me my old order had been cancelled and I had to reorder. I reordered , and sure enough, it was denied as potential fraud. Another hour on the phone confirmed that, since I don't make regular large purchases (and who does?) I can't make large purchases without going through fraud prevention. (My mother was with me and frightened that on vacation we might get our hotel bills denied due to this -- and sure enough the rather rude customer service person confirmed, if I buy things away from home, it too will result in calls -- well, supposedly, as I said they don't even call me now.)

Now, I know many people don't see anything wrong with this, find it a useful service, but for me, it is an annoyance. I keep pretty good tabs on my card, and would be happy to be on the hook for a few purchases if it is stolen just to have the convenience of buying things when I want without having to contact the bank. However, because banks are a cartel that doesn't really need to care about customer service -- all thanks to government lending laws, by the way, not the free market -- I have no option to say no to this "protection". (Cf "The Free Market?" for another example of poor bank responsiveness, and how it created a very lucrative field exploited by the free market.)

Obviously, many will disagree with me on this, will think I am upset over nothing, that I am being provided a valuable service, but that is my point. Should we not be allowed to decide how much protection we want? Or how little? The problem is, when we deal with the state (or in this case with state created cartels) that choice is denied us, and we are forced to accept what is offered. I grant, in a free market, you may not find exactly what you want either, but there will certainly be a wider variety of options available, as sellers seek to gain as much market as possible. Just compare the range of services offered on line today by private firms to, for example, cable services, which are largely cartels serving as monopolies in regions. (Though now thanks to online services competing, even cable is forced to offer a wider range than in, say, the 1980's or 1990's, when they were much less customer friendly.)

POSTSCRIPT

By the way, should the customer service person I spoke to ever read this, I repeat my suggestion, if you don't want to deal with angry people, find another job. I deal with plenty of angry people and can't tell them not to be upset, and I am not about to stop being upset by shoddy treatment just because you tell me to do so. You want me happy? Solve my problem. If you can't, then angry I shall remain.

POSTSCRIPT II

Perhaps this is not exactly an example of "protecting people from themselves", so much as forcing them to accept a level of protection despite their wishes. In a way it is much the same thing, as refusing to allow me to opt out is effectively protecting me from what they see as a bad choice, but I suppose there is a small difference.

1 comment:

  1. What a funny coincidence. We were in California a couple of weeks ago and the same thing happened to us. We couldn’t use our card at a gas station or at the airport (to charge a group change fee of $9!). Since it’s happened to us before I assumed that’s what it was (and I was right) and we just used another card, but my husband freaked out because he was planning to travel the following week as well and this week he’s in England and France. He didn’t want the inconvenience or embarrassment of having his card declined on his trip, so I had to call ahead and let them know where he was going.

    I agree with you that you should be able to opt out if you choose. Unfortunately, that doesn’t address the source of the problem. Credit card fraud is epidemic now and the Banks are understandably trying to protect themselves, and it’s all because we are far too lenient when it comes to punishing this crime. Honestly if I were queen, identity theft would be punishable by something just short of death. It’s not a crime of desperation. It’s a crime committed by intelligent people who are hell bent on stealing from others. I see no reason to have mercy on such people, but because we treat it like a trivial crime the perpetrators are not deterred and you and I and everyone else suffer the consequence of our cream puff “justice” system. This is what we will put up with until we demand harsh punishment for credit card thieves.

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