Opinion: When banking and technology collide: Nothing could go wrong, right?
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When asked why he robbed banks, Willie Sutton supposedly replied: ‘’Cause that’s where the money is.’
What was true in the 1920s is true today.
Witness the scheme that Times consumer columnist David Lazarus wrote about, in which a Bank of America employee ‘apparently leaked confidential information about ... hundreds of ... customers’ accounts to scammers, resulting in more than $10 million in losses.’
Lazarus continued:
According to the Secret Service, 95 suspects have been arrested so far in connection with the case, which is only now coming to light as BofA finally informs customers that their accounts were compromised.
Which is one reason I’m not exactly jumping for joy at these breaking news items in The Times:
First, ‘Google, MasterCard offer ‘Google Wallet’ to allow consumers to pay with smartphones’:
The company unveiled its ‘Google Wallet’ product on Thursday, a digital billfold that will allow consumers to pay simply by tapping their smartphones when it’s time to check out at grocery stores and retail locations around the U.S. ... The development signals Google’s entrance into a fast-growing mobile payments world in which phone manufacturers, wireless carriers, banks and payment processors are clamoring to allow users to get rid of credit cards -- and eventually cash -- so everything they need to pay will be kept on their phones.
Hmm, would those be the phones like the one my son had stolen from his high school locker, or the one my other son lost in the airport, or the one I accidentally left on my desk at work overnight? Those ‘smartphones’ -- the ones owned by ‘dumbpersons’?
But what could go wrong? It’s progress; make that Progress, with a capital P. As the story concludes:
Google’s vice president of mobile payments, Osama Bedier, gave a staged demonstration in which he purchased a pair of American Eagle jean shorts with his phone, applied a 20% coupon and used his customer loyalty card. The transaction quickly went through as he pressed his phone against the payment terminal.
Which is so cool. A $400 phone and millions in Internet technology so your daughter can buy shorts that are too short and get 20% off plus use her customer loyalty card.
Bet it will work at Cabo Cantina too; perhaps she can shout ‘A round for everyone!’ while she waves her cellphone past the payment terminal (didn’t they use to call those ‘cash registers’?)
But don’t worry, dad. If your little darling runs short of cash (or is it ‘data’?), it’s technology to the rescue again.
As Times staff writer E. Scott Reckard reported Thursday in ‘Banks team up for online payment system’:
Bank of America Corp., Wells Fargo & Co. and JP Morgan Chase & Co. are setting up an Internet exchange that would allow their customers to send money via text and email messages to customers at participating banks.
So, my money would go by email? Would that be the system I use in which, on occasion, I’ve been known to hit ‘reply to all’ when I meant to hit ‘reply,’ and 52 of my closest friends got the hilarious email in which I explain what a jerk my boss is and how bored I am with my job?
Or the one where I start to fill in an address, typing ‘bob,’ and the email program helpfully fills in the rest, except it goes to ‘bob the baker’ instead of ‘bob the banker’?
I know, I know: I shouldn’t be so cynical. But then I read this:
Under the banks’ effort, it’s unclear what new security issues may be created, but the payments, like debit transactions, appear to have fewer legal protections for consumers than credit card charges, said Paul Stephens, director of policy for the San Diego nonprofit Privacy Rights Clearinghouse. With new financial regulations aiming to rein in the fees banks charge merchants for debit card transactions, the new system ‘presumably ... is a bank moneymaker,’ Stephens said.
And this:
The banks said the new service will be free to customers as it is tested. Bank of America spokeswoman Anne Pace said the banks would later set separate fee structures for the service.
And I think back to what Lazarus wrote about the recent scheme at BofA:
The far-reaching fraud serves as a cautionary tale for all consumers who entrust virtually their entire financial lives to major companies. We want to believe those companies are worthy of the responsibility bestowed upon them.All too often, though, the guardians of our personal info prove sloppy or negligent in keeping data secure. And in some cases, their own insiders have a hand in perpetrating fraud.
Amen, David.
ALSO:
Cellphones: Quieting the public nuisances
Do you suffer from Facebook envy?
Fun with scamming the email scammers
Protecting privacy -- and hindering competition?
Air traffic controllers: The Assyrian fix for the late-night blues
-- Paul Whitefield
