dhepner@hpcuhc.cup.hp.com (Dan Hepner) (10/09/90)
[The Moderator writes] >It still does not lessen the illegality of it, nor for MCI. >You cannot take a group of people, based on their ethnic origin, for >example Chinese or Egyptian people -- and who, after all, would be the >most likely users of international calls to those countries? -- and >say or imply to them "you cannot be trusted to make a call to your >home country on credit; you are likely to defraud us." Why not, assuming one had the evidence in hand that a particular call attempt was probably fraudulent? This seems to have little to do with ethnic origin and much more to do with a systematic analysis of actual fraud. Given the very low actual marginal cost to the phone company of allowing one fraudulent call, it seems hard to believe that any carrier would dissallow entire classes of calls unless presented with evidence showing genuinely massive fraud. I'm puzzled by the Moderator's strong stance on this issue; does he have reason to believe that there really isn't massive fraud? Does he suggest that massive fraud must be tolerated (and paid for by you know who) to protect some "presumption of innocence"? Does he actually believe that MCI or AT&T really don't want the money of certain ethnics? Dan Hepner dhepner@hpda.hp.com [Moderator's Note: In lots of other ways, 'presumption of innocence' is a very important and desirable attitude, regardless of cost. Why do the telcos get to be an exception? Yes, there are problems with fraud, but there are protective techniques in place. A call 24 hours per day to AT&T at 800-222-0300 will put an immediate stop to charging on a stolen card. I've done it when my card was stolen. The hot PIN goes on a negative list in the computer and presto: no more charges allowed to that number and PIN. How does VISA, American Express or Diner's deal with a stolen card? How do banks deal with stolen ATM cards? Even if you did have massive evidence of fraud from a certain group -- and the Nigerian credit card ring working here in Chicago last year was a good example of this -- the federal law in the United States regards credit opportunities is plain: you deal with *single individuals* and their credit-worthieness, not with groups of people. And personally, no I do not think the people of any one country are more likely to commit fraud than another country. Even the 'Nigerian problem' here a year ago did not indict all Nigerians. Visa, Diner's and American Express cannot turn down citizens of China, Israel or India as a class; AT&T / MCI should not be allowed to do it either. PAT]
jhultman@beethoven.helios.nd.edu (10/09/90)
In article <13166@accuvax.nwu.edu> dhepner@hpcuhc.cup.hp.com (Dan Hepner) writes: >Why not, assuming one had the evidence in hand that a particular call >attempt was probably fraudulent? It seems hard to believe that any >carrier would dissallow entire classes of calls unless presented with >evidence showing genuinely massive fraud. ^^^^^^^^ This may be a stupid question, but has anyone actually *SEEN* any reports docuenting fraud based on ethnic origin from *ANY* carrier? Or are the LD companies just claiming that fraud exists, when in actuality there is some other (equally arbitrary) reason for (dubious legality) redlining? I think what we might have here is garden-variety discrimination.
dhepner@hpcuhc.cup.hp.com (Dan Hepner) (10/11/90)
jhultman@beethoven.helios.nd.edu writes: >This may be a stupid question, but has anyone actually *SEEN* any >reports docuenting fraud based on ethnic origin from *ANY* carrier? >Or are the LD companies just claiming that fraud exists, when in >actuality there is some other (equally arbitrary) reason for (dubious >legality) redlining? I think what we might have here is garden-variety >discrimination. The Moderator's response referred to one actual case, but to believe that an LD company would arbitrarily redline is to not understand business. This is even more emphasized when considering the inconsequential nature of the loss when low frequency LD fraud is perpetrated. Dan Hepner [Moderator's Note: I assume you knew insurance companies used to redline entire neighborhoods where they thought the losses would be too great for them, based on neighborhood conditions. Most credit card agencies in the early days (circa 1955-70) used to redline in the same way because they figured with the kind of people living in the redlined area, there would simply be too many fraud and/or bad debt write-offs. The government finally had to stop them from doing it. Credit is extended to individuals, based on individual circumstances; it is not extended to neighborhoods, or groups of people of a certain ethnic origin. PAT]
chris@com50.c2s.mn.org (Chris Johnson) (10/12/90)
In article <13166@accuvax.nwu.edu> dhepner@hpcuhc.cup.hp.com (Dan Hepner) writes: X-Telecom-Digest: Volume 10, Issue 722, Message 8 of 9 >[The Moderator writes] >>It still does not lessen the illegality of it, nor for MCI. >>You cannot take a group of people, based on their ethnic origin, for >>example Chinese or Egyptian people -- and who, after all, would be the >>most likely users of international calls to those countries? -- and >>say or imply to them "you cannot be trusted to make a call to your >>home country on credit; you are likely to defraud us." >I'm puzzled by the Moderator's strong stance on this issue; does he >have reason to believe that there really isn't massive fraud? Does he >suggest that massive fraud must be tolerated (and paid for by you >know who) to protect some "presumption of innocence"? Does he actually >believe that MCI or AT&T really don't want the money of certain ethnics? >[Moderator's Note: In lots of other ways, 'presumption of innocence' >is a very important and desirable attitude, regardless of cost. Why do >the telcos get to be an exception? Yes, there are problems with >fraud, but there are protective techniques in place. A call 24 hours .... >problem' here a year ago did not indict all Nigerians. Visa, Diner's >and American Express cannot turn down citizens of China, Israel or >India as a class; AT&T / MCI should not be allowed to do it either. PAT] That last is thought provoking to me. Do we have evidence or proof that credit card companies do _not_, in fact, blanket turn down applications from citizens of say Nigeria or Brazil? And maybe the situation is somewhat different between VISA and MCI, for example. In the former, if someone calls VISA and says a charge is not one they made, and refuses to pay the bill, chances are if VISA cannot prove they made the purchase, they will at minimum invalidate the account due to suspicion of theft. And the consumer may still have to pay $50. But if someone claims hundreds of dollars worth of phone calls were not theirs, what happens? ...Chris Johnson chris@c2s.mn.org ..uunet!bungia!com50!chris Com Squared Systems, Inc. St. Paul, MN USA +1 612 452 9522 [Moderator's Note: The same thing, more or less. The PIN becomes invalidated, and under some circumstances the card holder has to pay $50 for not acting as promptly as possible to have the card shut off. You can call AT&T 24 hours per day to report abused, stolen or lost calling cards, just like any credit card. And I think you have the moral and legal obligation to assist AT&T in preventing fraud on your account. PAT]
dhepner@hpcuhc.cup.hp.com (Dan Hepner) (10/12/90)
>Credit is extended to individuals, based on individual circumstances; >it is not extended to neighborhoods, or groups of people of a certain >ethnic origin. PAT] Imagine you're a merchant offering your own credit, say a jewelry store. Now imagine that a particular form of jewelry, say ruby studded belly button plugs, has one distinction: of 146 ruby studded belly button plugs sold on credit, 143 turned out to be to people who had used falsified credentials. Now you buy RSBBPs for $12.50, and they retail for $900, and that's why you sold 143 to fraudulent customers, but by now you're tired of the ripoff. You advise your staff: no more credit sales of RSBBPs. The next thing you know, out there on Usenet, the moderator of comp.jewelry is griping because he has noticed that the only people who bought RSBBPs were people with holes in their belly buttons, people of the "holey belly button ethnic origin". Discrimination! the moderator screams. You cannot conclude that just because 98% of the previous credit sales of this item were fraudulent that this individual wishing to buy is likely attempting fraud. There are principles involved here! You must complete the transaction regardless of your knowledge. Just pass the costs along to your other customers who do pay their bills. Dan Hepner [Moderator's Note: In your hypothetical example, if 98 percent of the merchandise sold on credit was lost due to fraud, then the merchant did a very poor job of screening persons applying for credit. Can you say Credit Bureau? Do you know what they are used for, and how they operate? If the merchant handed out his credit cards freely to whoever asked for them without bothering to check credit references, or verify the person's address or place of employment, then he should not be surprised at the fraud he suffers. And despite the fraud he suffers due to his careless handling of his credit accounts, there are honest folks who might wish to buy the merchandise and pay for it on convenient terms. If an honest customer reports that his credit card has been lost or stolen -- or otherwise compromised -- then if the merchant makes little or no effort to prevent sales to that account, he should not be surprised at the losses suffered. Unlike the example you gave, where the characteristics of the supposed buyers of the merchandise are so common that they would apply to almost every single human being, it is quite unlikely that most Americans would have any reason or interest in calling a foreign country from a payphone in an ethnic neighborhood. Most calls to such places would be from business telephones or at the very least, private residential telephones. The characteristics of the buyers of international long distance phone service from pay telephones in certain neighborhoods of our inner cities are rather specific. The persons involved are most likely immigrants to the USA from the country involved. If they are in legal possession of a telephone calling card, they should be permitted to use it. If they are not in legal possession of the card, then it should be a simple enough matter to have the network spot the call, and notify a human being who would in turn arrange to have a police officer tap on the person's shoulder as they were standing there making their fraud call. It has happened that way in the past! To the extent that telephone calling cards are defined as instruments of credit, then the rules of the Federal Trade Commission would apply. The FTC has said by all means vigorously prosecute credit fraud. The FTC has also said credit grantors may not block entire categories of people from obtaining credit merely because some creditor-defined ratio of fraud to legitimate transaction has been exceeded. That, after all, is what credit bureaus, check verification and similar services are for: to say who is credit worthy and who is not. Imagine Amex or Diners saying to an Indian or Korean or Israeli that they are not going to honor a given credit transaction because "... people from your country tend to commit fraud a lot...". If Bob Allen -- who has written to the Digest before -- or someone from his office wishes to respond, I'll be privileged to print their letter here. PAT]
am299bv%sdcc6@ucsd.edu (Ravinder Bhumbla) (10/15/90)
I hate to add more noise to this topic, but I couldn't stop myself. In article <13526@accuvax.nwu.edu> by dhepner@hpcuhc.cup.hp.com (Dan Hepner) the Moderator writes: >Imagine >Amex or Diners saying to an Indian or Korean or Israeli that they are >not going to honor a given credit transaction because "... people from >your country tend to commit fraud a lot...". I don't know if this is relevant, but I have been told that since last year, CITIBANK has stopped giving VISA credit cards to foreign nationals. When I was in Virginia about two years back, my bank, Dominion Bank had a place for "nationality" in their credit card application and denied a credit card to all foreign nationals. As far as I know, it is NOT illegal to discriminate on the basis of national origin against people who are not US citizens (I find that understandable, though not necessarily justifiable). Ravinder Bhumbla rbhumbla@ucsd.edu Office Phone: (619)534-7894 [Moderator's Note: Lots of merchants and/or creditors won't extend credit outside the USA for the simple reason they have little or no enforcement mechanism. Suit is a cumbersome process when an overseas solicitor must be employed. To totally exclude all non-USA citizens who are visiting us from receiving credit is one thing -- to issue credit to <some> out of country people and not others is illegal. A creditor can say "I do not issue credit cards outside the USA". He cannot say "I allow some people visiting here (or in the process of becoming citizens here) to have credit, but not certain others." Either no credit outside the USA or credit extended individually to all applicants on a fair basis, using factual data about the individual to make the decision. PAT]
ben@hpcvlx.cv.hp.com (Benjamin Ellsworth) (10/16/90)
> ... To totally exclude all non-USA citizens who are visiting us from > receiving credit is one thing -- to issue credit to <some> out of > country people and not others is illegal. ... PAT If DISCRIMINATION of foreign nationals based on country of origin is legal (and I believe it is), then *by definition* they may do precisely that. You are free to discriminate against anyone you like on any basis EXCEPT those specifically mentioned by law. The protection of these laws, when push comes to shove, is most likely only extended to citizens of the USA. Benjamin Ellsworth ben@cv.hp.com All relevant disclaimers apply.
peter@ficc.ferranti.com (peter da silva) (10/17/90)
In article <13600@accuvax.nwu.edu> ben@hpcvlx.cv.hp.com (Benjamin Ellsworth) writes: > protection of these laws, when push comes to shove, is most likely > only extended to citizens of the USA. One of the remarkable things about that remarkable document, the Constitution of the United States of America, is that it *does* apply to non-citizens. Peter da Silva. +1 713 274 5180. peter@ferranti.com
carroll@beaver.cs.washington.edu (Jeff Carroll) (10/24/90)
In article <13600@accuvax.nwu.edu> ben@hpcvlx.cv.hp.com (Benjamin Ellsworth) writes: >> ... To totally exclude all non-USA citizens who are visiting us from >> receiving credit is one thing -- to issue credit to <some> out of >> country people and not others is illegal. ... PAT >If DISCRIMINATION of foreign nationals based on country of origin is >legal (and I believe it is), then *by definition* they may do >precisely that. You are free to discriminate against anyone you like >on any basis EXCEPT those specifically mentioned by law. The >protection of these laws, when push comes to shove, is most likely >only extended to citizens of the USA. I doubt that this has been tested in court, and I'd bet that the civil rights law says "discrimination against any person...", not "discrimination against any citizen of the United States...". I think it's been demonstrated that this is a gray area in the law. Most likely it would come down to whether PAT or AT&T had the best lawyer :^). Followups to soc.lobotomized.lawyers. Jeff Carroll carroll@atc.boeing.com [Moderator's Note: Well, they would have the best lawyers, I suppose. Anyway, I don't like most lawyers, and agree with Bill Shaekespeare's suggestion for dealing with them -- at least all except the seven who have employed me for a few years now. Or else they work for me, I keep forgetting exactly how we have it arranged. PAT]