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Journal Article
The efficiency and integrity of payment card systems: industry views on the risks posed by data breaches
To examine the adequacy of existing efforts to prevent, manage, and mitigate data breaches and other fraud in card-based payment systems, the authors conducted 17 interviews of various payment industry participants in 2009. This article documents the insights gained from the interviews, which consider the need for greater cooperation, sharing of relevant information, and innovation to stay ahead of the criminals that perpetrate payment card fraud with increasingly sophisticated methods.
Journal Article
Patent reform: a mixed blessing for the U.S. economy?
The 1980s represented a period of dramatic change in the design and enforcement of U.S. intellectual property law. Many of these changes were adopted in the hopes of stimulating private research and development and improving the technological competitiveness of American industries. This article examines the effects of an especially important aspect of these changes: many more inventions qualify for patent protection than before. While it seems logical that making patents easier to obtain will encourage more inventive activity, economic analysis reveals this is not always true, and it is less ...
Journal Article
What's in the file? The economics and law of consumer credit bureaus.
In "What's in the File? The Economics and Law of Consumer Credit Bureaus," author Bob Hunt points out that lenders in the United States have voluntarily shared information about their customers - through credit bureaus - for nearly a century. Hunt explains how sharing information about consumers' indebtedness and payment histories can benefit both consumers and lenders. These benefits depend, however, on the accuracy of the information reported and the care taken to ensure that information is disclosed only when appropriate. Hunt also describes the Fair Credit Reporting Act, which ...
Journal Article
Collecting consumer debt in America
Why should economic scholars study the consumer debt collection process? First, the cost and effectiveness of the collections process has implications for the pricing and availability of consumer credit. Second, changes in technology and the structure of credit markets have transformed the collections industry. Small, mom-and-pop operations are increasingly being replaced by firms operating nationally, collecting on billions of dollars in bad debt purchased from creditors. In ?Collecting Consumer Debt in America,? Bob Hunt explores how creditors and their agents attempt to collect past-due ...
Journal Article
You can patent that? Are patents on computer programs and business methods good for the new economy?
In other parts of the economy, firms are increasingly turning to patents to protect not just physical inventions but more abstract ones such as computer programs or ways of doing business. Just two decades ago such patents would have been impossible to obtain, let alone enforce. In "You Can Patent That? Are Patents on Computer Programs and Business Methods Good for the New Economy?" Bob Hunt describes the changes in patent law that have given rise to this phenomenon.
Journal Article
The software patent experiment.
Over the past two decades, the scope of technologies that can be patented has been expanded to include many items previously thought unsuitable for patenting, for example, computer software. Today, the U.S. Patent and Trademark Office grants 20,000 or more software patents a year. Conventional wisdom holds that extending patent protection to computer programs will stimulate research and development and, thus, increase the rate of innovation. In "The Software Patent Experiment," Bob Hunt and Jim Bessen investigate whether this has, in fact, happened. They describe the spectacular growth in ...
Journal Article
Ten years after: What are the effects of business method patents in financial services?
In recent years, the courts have determined that business methods can be patented, and the United States Patent and Trademark Office has granted some 12,000 patents of this sort. Has the availability of patents for business methods increased the rate of innovation in the U.S. financial sector? The available evidence suggests that there has been no significant change in the aggregate trend of R&D investments made by financial firms. In "Ten Years After: What Are the Effects of Business Method Patents in Financial Services?," Bob Hunt discusses how recent court decisions and proposed ...
Journal Article
Antitrust issues in payment card networks: can they do that? should we let them?
Although people still use cash to pay for goods and services, the trend is toward payment cards. In the U.S., payment card networks coordinate the activities of thousands of financial institutions, millions of retail locations, and several hundred million consumers. This coordination may include the collective setting of certain prices and other controversial network rules. Such practices have recently come under the scrutiny of antitrust authorities in the U.S. and abroad. In "Antitrust Issues in Payment Card Networks: Can They Do That? Should We Let Them?" Bob Hunt describes the ...
Journal Article
Whither consumer credit counseling?
Bob Hunt outlines the history of credit counseling in the U.S. He also observes that, despite its long track record, the credit counseling industry is not without controversy. For example, in recent years, concerns about conflicts of interest and the emergence of a new type of credit counseling agency have triggered significant legislative and regulatory activity. Hunt notes that there is evidence that credit counseling organizations are effective in helping some consumers. However, he points out that the lack of formal research in this area makes it difficult to interpret information and a ...
Discussion Paper
Consumer use of fraud alerts and credit freezes: an empirical analysis
Fraud alerts ? initial fraud alerts, extended fraud alerts, and credit freezes ? help protect consumers from the consequences of identity theft. At the same time, they may impose costs on lenders, credit bureaus, and, in some instances, consumers. We analyze a unique data set of anonymized credit bureau files to understand how consumers use these alerts. We document the frequency and persistence of fraud alerts and credit freezes. Using the experience of the data breach at the South Carolina Department of Revenue, we show that consumers who file initial fraud alerts or credit freezes likely ...