Security Ignorance and Fraud

Richard has been talking about security scams over at Gendal World. There certainly seems to be a lot of empirical evidence that security principles aren’t well understood by the general public.

For example: My credit card expired recently. On receiving the new one, I forgot to sign it, and put it in my wallet with the back blank (yeah, I know). I’ve since been able to use it twice unsigned:

  • At a pub, I paid for ~£10 worth of drinks. They didn’t use chip-and-pin, so I was asked to sign. When the barman noticed I was missing a signature, he pointed out that I really should sign it, but ‘this time’ he’d take other ID. I showed him my photo driving licence (with a signature), and there were no further questions. I was sufficently fazed that I forgot to sign it again, and:

  • At a shop in Southampton airport, I went to pay for a magazine. Again, no chip-and-pin. When noticing the card was unsigned, I was again encouraged to sign it, but this time no other ID was required - even though I offered my driving licence. ‘I’ll trust you’, I was told.

Of course, it is dumb for me to walk around with an unsigned card in my wallet. However, it’s also dumb for these retailers to accept it. You could argue that it’s a low risk for them - I look respectable, I have other ID with my photo and signature, and these are low amounts involved. Whether they are breaking their contract with the bank by accepting it, though, I don’t know - I suspect it would frowned upon, at least - and they are probably liable for any fraud.

I was tempted to leave the card unsigned and see how much longer I could get away with it. If I wasn’t putting myself at risk, I’d do it, but I’m paranoid about losing things, so I haven’t. But it’s curious to see just how easy it is to get away with some things.

Catering for the Last-Minute Customer

Imagine the scenario:

  • You live in Winchester and don’t drive.

  • You’ve gone out for the night.

  • You’re catching an early flight from Southampton airport the next morning.

  • Because you’re a bit slow, it doesn’t occur to you that trains don’t go to the airport early enough, until:

  • You return home at 1am that morning from the pub to check the timetable.

  • You realise they start at least an hour too late.

  • You panic.

  • You go to Google Maps, and type in winchester taxi.

  • You phone up the first company listed.

  • You eventually convince them that, yes, you really do want a taxi in 4 hours, and you aren’t drunk.

  • You catch a small amount of sleep.

  • The taxi arrives on time, you get to Edinburgh on time, and have a great weekend.

The crucial part here was that Wintax were the first company listed. If I’d had the time and patience, I might have rung round and got some quotes, but the situation being as it was, I went for the first option without hesitation. I wasn’t particularly price-sensitive. Wintax got my business simply by being savvy enough to be first on the list (actually, it seems this happens because Google orders according to geographic distance, but arguably it’s still good business practice to locate near the centre of Winchester).

The book I’m reading at the moment, The Undercover Economist, contains a similar discussion pertaining to the location of coffee shops in Waterloo station. It (perhaps indirectly) seems to debunk a common myth that free markets drive down prices to near-cost levels. Sometimes people will pay a lot for something intangible, such as location or convenience. I’ll try to avoid making the above mistake again, though.


Purely by accident, I discovered this little bug on Google: go to (or any other invalid URL). The 404 page that appears has an ancient logo. Judging from Google’s logo history, it’s pre-1999.

Is this really a mistake, or is it a feature? I can’t believe I’m the first to notice this. It’s cute, anyway…

Persuasive Words

Economists often use words differently from other folk. Words such as ‘profit’, ‘wealth’, ‘rent’ and ‘cost’ all have subtle, but important, differences from the way many of the general public use them. Such words can easily get tied to particular value judgements or politics - for example, the word ‘profit’ conjures up images of fat cats and greedy people in the minds of many. In the minds of economists, profit is almost always a good thing - partly because they don’t tie the word just to money.

Another example: I’m a vehement libertarian, and we think about concepts such as ‘democracy’, ‘profit’, and ‘property’ differently from the way many people do. When I tell people we don’t live in a democracy, they think initially I’ve gone off my rocker (I’m not talking here about minor inequities in vote distribution etc.). I have to explain that I have quite a different definition of democracy to them before we get back on track.

So this poses a dilemma, and it extends beyond these economic and political concepts: should one always use these words as they ‘should’ be defined, or is part of the persuasion process thinking up new words and phrases that make concepts more readily graspable? I’m not suggesting that these concepts are difficult: but it’s always easier to have a discussion when you’ve defined your terms: when people have a pre-judged notion of what terms mean, but then they are re-defined, suddenly it gets a lot harder. Are there things you have trouble explaining because people already have ideas about what the words involved mean?

Sometimes I think it’s OK to alter your terminology. It feels bad, though, when you feel like you’re giving in to established usages that you feel are ‘wrong’. I don’t like flip-flopping back-and-forth between definitions of democracy, for example, but I do it - to facilitate discussion. I think these are hard decisions to make.

Word of the Day #983

Kleptocracy - where government steals from the public purse.

I came across this term the other day in a podcast from Econtalk in which Bruce Bueno de Mesquita discussed his most recent book, The Logic of Political Survival - a cynical look at how and why governments stay in power. It’s well worth a listen.

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