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Discussion Paper
Maintaining a safe environment for payment cards: Examining evolving threats posed by fraud
On April 23 and 24, 2008, the Payment Cards Center of the Federal Reserve Bank of Philadelphia and the Electronic Funds Transfer Association jointly hosted "Maintaining a Safe Environment for Payment Cards: Examining Evolving Threats Posed by Fraud." The conference included panels representing four key constituencies: issuers, consumers, merchants/acquirers, and networks. The panelists addressed the nature of payment card fraud in the 21st century. This paper summarizes the highlights from the presentations and the discussions that ensued.
Newsletter
Improving security for remote payments
Given the growing popularity of e-commerce and m-commerce over the past few years, remote payments have become commonplace. Unfortunately, remote payments fraud has grown in response. On September 26, 2011, the Federal Reserve Bank of Chicago and the Secure Remote Payment Council (SRPc) co-hosted a symposium to discuss strategies that help reduce such forms of fraud.
Working Paper
A Model of Charles Ponzi
We develop a model of Ponzi schemes with asymmetric information to study Ponzi frauds. A long-lived agent offers to save on behalf of short-lived agents at a higher rate than they can earn themselves. The long-lived agent may genuinely have a superior savings technology, but may be an imposter trying to steal from short-lived agents. The model identifies when a Ponzi fraud can occur and what interventions can prevent it. A key feature of Ponzi frauds is that the long-lived agent builds trust over time and improves their reputation by keeping the scheme going.
Working Paper
A Model of Charles Ponzi
We develop a model of Ponzi schemes with asymmetric information to study Ponzi frauds. A long-lived agent offers to save on behalf of short-lived agents at a higher rate than they can earn themselves. The long-lived agent may genuinely have a superior savings technology, but may be an imposter trying to steal from short-lived agents. The model identifies when a Ponzi fraud can occur and what interventions can prevent it. A key feature of Ponzi frauds is that the long-lived agent builds trust over time and improves their reputation by keeping the scheme going.
Discussion Paper
The laws, regulations, and industry practices that protect consumers who use electronic payment systems: policy considerations
This is the third in a series of three papers that examines the laws, regulations, and voluntary industry practices that may aid consumers who contest an electronic transaction because of error, fraud, or merchant dispute. The first two papers describe the complex web of protections available to users of four popular electronic payment mechanisms: credit cards, debit cards, prepaid cards, and ACH e-checks. This third paper considers how protections related to fraud, error, and disputes affect market participants. The paper concludes that (i) the current protection mechanisms make it more ...
Journal Article
Who is concealing earnings and still collecting unemployment benefits?
Concealed earnings represent the largest source of fraud in the U.S. unemployment insurance system. Individuals with relatively low earnings constitute a larger fraction of those committing such fraud. High-earnings individuals, however, account for larger dollar amounts of this fraud.
Journal Article
Economic Perspectives special issue on payments fraud: an introduction
This article provides an overview of this special issue of Economic Perspectives, which presents selected papers based on the proceedings of the Federal Reserve Bank of Chicago's eighth annual Payments Conference, Payments Fraud: Perception Versus Reality, held on June 5?6, 2008.
Discussion Paper
Identity theft: where do we go from here?
The identity theft forum sponsored by the Payment Cards Center of the Federal Reserve Bank of Philadelphia and the Gartner Fellows Program brought together a broad range of stakeholders to discuss the important issue of identity theft. Participants from the financial services and merchant industries, Internet service and technology providers, and regulatory and law enforcement agencies examined issues faced by consumers, merchants, and banks in fighting this financial crime. Discussants shared methodologies used to combat this crime and explored opportunities for coordination in searching for ...
Journal Article
Fraud containment
Discussion Paper
Identity theft: do definitions still matter?
Despite a statutory definition of identity theft, there is a continuing debate on whether differences among the financial frauds associated with identity theft warrant further distinction and treatment, not only by lenders and financial institutions but also by consumers and regulatory and law enforcement agencies. In this Discussion Paper, Julia S. Cheney examines four types of financial fraud ? fictitious identity fraud, payment card fraud, account takeover fraud, and true name fraud ? that fall under the legal term identity theft to better understand how criminal behavior patterns, risks ...