When a customer gets defrauded, should the enterprise reimburse?

Credit to Author: eschuman@thecontentfirm.com| Date: Tue, 06 Feb 2024 03:00:00 -0800

The New York Attorney General’s decision to sue Citibank last week for failing to reimburse customers who’d been victimized by fraud raised some interesting issues for business that go beyond just Citibank. Specificially, when should a customer be reimbursed for fraud and at what point do the customer’s own actions come into play?

To be clear, financial institutions have been routinely refusing to reimburse customers who have done nothing wrong. The far trickier issue is when the customer does indeed do something wrong.

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Q&A: TIAA's CIO touts top AI projects, details worker skills needed now

Artificial intelligence (AI) is already having a significant effect on businesses and organizations across a variety of industries, even as many businesses are still just kicking the tires on the technology.

Those that have fully adopted AI claim a 35% increase in innovation and a 33% increase in sustainability over the past three years, according to research firm IDC. Customer and employee retention has also been reported as improving by 32% after investing in AI.

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Q&A: At MIT event, Tom Siebel sees ‘terrifying’ consequences from using AI

Speakers ranging from artificial intelligence (AI) developers to law firms grappled this week with questions about the efficacy and ethics of AI during MIT Technology Review’s EmTech Digital conference. Among those who had a somewhat alarmist view of the technology (and regulatory efforts to rein it in) was Tom Siebel, CEO C3 AI and founder of CRM vendor Siebel Systems.

Siebel was on hand to talk about how businesses can prepare for an incoming wave of AI regulations, but in his comments Tuesday he touched on various facets of the debate of generative AI, including the ethics of using it, how it could evolve, and why it could be dangerous.

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Morgan Stanley fines some employees $1M for WhatsApp, iMessage use

Investment banking firm Morgan Stanley has punished some of its employees with fines that topped more than $1 million for breaching compliance rules by using WhatsApp and iMessage for business communications.

The fines were levied by docking previous bonuses or future pay, according to a report  in the Financial Times.

While the fines might seem steep, Morgan Stanley itself has had to pay millions of dollars in fines for previous SEC violations related to the use of consumer messaging apps for business purposes.

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As China pushes its digital currency plans, the US falls behind

China’s digital Yuan project, a blockchain-based cryptocurrency for consumer and commercial finance, can no longer be considered a pilot. That’s the assessment by economic and cryptocurrency experts.

Those experts have been monitoring efforts in China and other countries developing and piloting central bank digital currencies (CBDCs) with the aim of establishing a blockchain-based virtual cash that is cheaper to use and faster to exchange, both at home and across international borders.

To date, the People’s Bank of China has distributed the digital yuan, called e-CNY, to 15 of China’s 23 provinces, and it has been used in more than 360 million transactions totaling north of 100 billion yuan, or $13.9 billion. The country has literally given away millions of dollars worth of digital yuan through lotteries, and its central bank has also participated in cross-border exchanges with several nations.

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Would a US digital dollar let the government track you?

US legislators continue to press for the creation of a digital dollar, raising questions about whether the move could make it easy for the federal government to track business and consumer transactions.

Putting all the digital dollars on one electronic ledger operated by the Federal Reserve would also be a tempting target for cyber criminals.

In March, lawmakers introduced a bill that would allow the US Treasury to create a digital dollar and pilot it to determine its viability. That same month, President Joe Biden called for more research on developing a national digital currency through the nation’s central bank. The order highlighted the need for more regulatory oversight of cryptocurrencies, which have been used for nefarious purposes such as money laundering and other criminal activities.

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16 Wall Street firms fined $1.8B for using private text apps, lying about it

The US Securities and Exchange Commission (SEC) has fined big-name banks and brokerages a collective $1.8 billion over workers’ use of private texting apps to discuss work and for not always saving those messages. The fines include $1.1 billion assessed by the SEC and a $710 million fine from the Commodity Futures Trading Commission (CFTC).

The SEC investigation uncovered what the agency called “pervasive off-channel communications,” that were collected by the firms themselves from employee devices. The employees included senior and junior investment bankers and debt and equity traders.

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Planned ‘fixes’ for credit-card interchange fees will actually make fraud easier

Credit to Author: Evan Schuman| Date: Fri, 26 Aug 2022 03:00:00 -0700

I love it when organizations try and do something good, but don’t think things through and end up delivering unintended negative consequences.

Today’s case in point: the US Senate and the Federal Reserve, both of whom are looking to reduce high interchange costs, but are unintentionally increasing costs for merchants and sharply boosting the undiscovered fraud rate. Not bad for government work.

Let’s start with the Senate, where Sens. Dick Durbin (D-IL) and Roger Marshall (R-KS) have crafted The Credit Card Competition Act of 2022. Its stated goal: reduce the interchange fee that financial institutions and card brands (Visa, MasterCard, Amex, etc.) charge retailers. 

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