I have long been terrified of something shaped a bit like this. Here in the US we already treat most workers like absolute garbage. If one day the Average Joe wakes up and finds that all his money is merely some electronic scribbles in a database which have mysteriously gone missing, the social unrest is probably something that most people on this site couldn't even conceptualize of.
Today it's Zelle, but what happens when you and everyone you know wake up and check your bank account and get an error. Suddenly can't buy food? So on. Sure, they keep backups. You hope. Do they test restoration? What would have to go wrong deep in the depths of a financial system creaking along on 1970s technology in order to really throw a wrench in things?
I work for a bank in the US, and not one of the names you hear associated with scandals all the time. The level of redundancy and HA built into our everything is why our jobs are so boring and slow. We also use a core banking platform that lots of other banks use and it's properly engineered for the kind of enterprise performance we'd all expect. There are certainly problems in banking, but the FDIC protections are also there for consumers. Let's start with a reasonable premise, not a fear-mongering one.
I’ll be the 10th man and add to the nihilism. Consumer protections are there not for the consumer, but to create some sort of artificial social stability through recourse and take the wind out of any social uprising.
I'm confused by your nihilism. If the outcome is that I can get my money back (and I would argue that 250k covers a VAST majority of people, and then some), isn't that a fair trade for me not killing and eating a banker?
True consumer protection would allow people to have immediate remediation (rather than on a weeks-to-months timeline), and also hold the responsible parties accountable beyond a fine that’s a rounding error in terms of profits.
If we're in a hypothetical world where a major bank lost say millions of bank accounts and for some reason it was going to take months to correct it would hit the news, there would be emergency legislation blocking eviction, utility shutoff, and debt collection, and interest accrual as well as all the lost bank accounts being credited with a some amount as combination fine/stimulus.
Landlords tolerate eviction moratorium with covid because only a fraction of their tenants stopped paying.
I think a scenario where just a few million or whatever were effected you are correct. However if it was almost everyone, landlording would become a straight up mob. You'd have to employ violence and bypass the state to maintain the properties and enterprise. No one would rent out property the legal way if they couldn't collect the rents.
You are assuming that the institutions offering the protection will follow
through for when you need them to. I don't mind people who do believe these
promises made to them, but I certainly understand those who don't.
> The level of redundancy and HA built into our everything is why our jobs are so boring and slow
I have also done this, and I can't say I agree. This is certainly one issue but the real issue is that these companies are not run by tech people. The tech is simply another cost center and gets no vote on how things are run. Many tech firms have equal amounts of redundancy but still manage not to have such terrible software
This is a huge problem, I agree, but it's not why the redundancy and HA get built the way it does. That's still coming from IS in the orgs I've had exposure too. The business side would rather we do things quicker and easier and not put as many technical roadblocks to vendor selection and build roadmaps.
> engineered for the kind of enterprise performance
It took me a while to realize that this is the first time in ages (outside of cringeworthy marketing materials) I’ve seen “enterprise” used as something other than a pejorative!
> one day the Average Joe wakes up and finds that all his money is merely some electronic scribbles in a database which have mysteriously gone missing, the social unrest is probably something that most people on this site couldn't even conceptualize
Imagine the horror when the government declares that the physical money you owned will have no value after one month and you have to exchange it for a replacement
That’s expropriation, not bank error. And there was very little unrest (EDIT: resulting from the expropriation per se).
If you’re concerned about that risk, an offshore bank account is better protection than physical assets within the expropriating government’s jurisdiction.
>If you’re concerned about that risk, an offshore bank account is better protection than physical assets within the expropriating government’s jurisdiction.
Due to FATCA Americans are pariahs in the global banking system. For grocery money probably not going to happen.
The ‘01 riots were a symptom of economic collapse. I don’t recall any significant contemporaneous attribution to the expropriation of U.S. dollars in bank accounts, which mostly hit the rich.
> Due to FATCA Americans are pariahs in the global banking system
For grocery money, a second bank account is sufficient. For expropriation risk, opening an offshore account as an American is nontrivial, but far from pariah status. (For that experience, say you’re Russian.)
It's interesting to characterize economic collapse as unrelated to access to foreign currency for international trade. Also interesting to presume what happens to the rich, who are often the employer and owners, doesn't cause issues for the rest of the economy and the employees of the rich.
Also bear in mind that in the US it is a rich person's game indeed to hold foreign currency. But in Latin America and especially Argentina USD is far more common in the common man's hand.
> interesting to characterize economic collapse as unrelated to access to foreign currency for international trade
This jumps the rhetorical shark. Nobody said they’re unrelated. Just that the unrest is a response to the collapse. It would have occurred if the government seized dollars or not. The dollar seizure was a response to the collapse.
I acknowledge neither of our theories can be proven but it just seems too far fetched to me the unrest was attributable to everything but the banking measures.
An important consideration here is unrest is in part in response to perceived factors in the economic collapse. Even if one takes the position the measures are not the cause of the collapse they can still be a cause of unrest.
> if one takes the position the measures are not the cause of the collapse they can still be a cause of unrest
You’re missing that the measures have been taken in other contexts without unrest, e.g. Iceland, Cyprus, FDR’a gold confiscation. If X always precedes Y, and Z sometimes does but sometimes doesn’t (and when it does, is twinned with X), and we witness X, Z and Y, X is the dominant explanation for Y.
Kuznets' quote is about international finance. Not social unrest. The factors that lead Argentina to collapse are uniquely Argentinian. What happened after that is unsurprising.
>Kuznets' quote is about international finance.
>Not social unrest.
This is a contradiction. You said social unrest is caused by financial collapse. International finance in a globally integrated economy like Argentina then necessarily becomes a piece of the financial collapse that causes unrest.
Lol while we're going with the troll accusation (yeah I realize you said "trolling" not "troll" but it's just a back-door to the ad-hominem attack), I'd like to point out the person refusing the relation of the banking measures which came immediately before the riots (and even have a wikipedia page which describes the subsequent anger and violence) as somehow being not a cause of the unrest, is a self described ex "investment banker." Who'd of guessed it.
Isn’t this what happened during the Great Depression? Exactly what you described except instead of “scribbles in a database” it’s people’s physical money in banks. This is literally where the term “bank run” comes from
The depression certainly had unrest, idk how great but it happened in the 1930s so I would expect things would be much worse if something like that were to happen today.
A bank run comes from people running to the bank to withdraw all of their money from their accounts to keep it as cash and essentially bankrupting a bank, causing shockwaves in credit markets.
It's not really the same thing as the money suddenly nullified which I think the original commenter is describing. A better analogy might be to say it's like everyone waking up and seeing their 401k suddenly says 0$.
Different in that that wasn't a case of losing records.
It was the delicately balanced house of cards that is fractional reserve banking all of a sudden crashing down, and pulled back the veil to temporarily reveal to everyone that money isn't real, and even though we remember who all has what, it only works if the masses don't look behind the curtain.
I understand the idea of "if you take everything from someone, what makes them keep to the law", but it's pretty obvious people don't work that way.
There are plenty of scam victims who lose all their savings to individuals or groups. How many of them do you hear of visiting the scammers' office with a pump gun? The sue, they hope for justice, they drink themselves to death, but that's about it. There are some exceptions, but they're super rare.
I mean, people are not robots, but I think it's pretty obvious people do work that way.
Famously, one of the factors in the collapse of the USSR was people realizing society was breaking and starting to work with grey market or criminal groups. You can search for the impact on crime of basically ANY social support program (sanctuary cities[1], substance abuse treatment[2], SNAP[3]) and they all reduce crime.
How people deal with a lack of resources is highly personal. It's true that few of them track down and murder the people who stole from them (it's hard and also most people don't want to kill others). But again, it's extremely well established that people with more going for them commit fewer crimes.
This is intuitive but wrong; the balance of evidence is that poverty does not drive people to crime.
During economic contractions in the west for example, crime does not spike. 2008, or even the great depression: No crime jump.
In the past in the west, when everyone was much poorer (1960's back to 19th century) crime was often substantially lower even than now. We're talking 1930's slums here.
Poverty correlates with crime, but the causation is probably the other way: Crime destroys wealth of a community.
Or it might be a third cause: The kind of people who commit a lot of crime in their community are also the kind who are economically dysfunctional in general and will create poverty for themselves.
It's not that poverty causes all crime. Wealthy people commit different crimes than poor people. [1]
You bring up the 2008 recession, but the poverty rate, rose from ~12% to ~15%[2]. A meaningful but not earth-moving change. Median wages did not decrease [3], suggesting that the rise in poverty would be from job loss, which has not been shown to have a simplistic, direct relationship to crime [4]. The fact that poverty is not the most important factor in crime does not mean it is not a factor.
That is all to say - poverty (and in a wider sense forms of desperation) are not the sole force driving crime, but they are a force for certain crimes. Again, it's very reliable that you can reduce crime with better social support. That's not to say that crime == poverty, just that it's one of many factors that influence people.
With extreme poverty, you'd probably see some increase in crime. But I doubt you'll see social unrest, unless it's very specific, e.g. you cut off welfare to some ethnic group in the US, and it'll need some level of coordination behind it. I doubt the government will allow that kind of organization for a large scale issue where "the system" is at stake and it's not just some local racial riot.
I know people working for banks in France and they basically have bugs sometimes where their customers are debited or credited twice. It’s a bunch of legacy xml protocols used for settlements and they sometimes have to pull a bunch of people to manually go through the books and fix mistakes. It’s insane to me that not more has blew up so far. I guess in a way banks truly are decentralized and so one bank fucking up doesn’t necessarily affect other banks.
I saw this happen with my own eyes in 2008 -- the trick was to re-order transactions such that an overdraft is triggered before other small transactions, to rack up overdraft charges.
Secondly, a Wells Fargo in California told a daily customer at the window in a bank "your cash deposit will not be credited until the next day" ..
both of these stories are completely true, at the same time as the Washington Mutual Bank failure.
There was a 1 week time when I had literally 0 to my name because all my money was tied up in bank transfers. It was unnerving.
When zelle first came out, my bank fudged an api call and basically sent my money backwards... which made the transfer crash. Took me a month, they couldn't recover the transfer and just had to credit me the missing cash.
Don't put all your eggs in one basket. Don't daily carry a physical debit card to your largest accounts that could be easily lost or stolen. Take advantage of credit card protections, or cash.
Plopping your life savings in one large savings account has never been a good idea.
20 years ago I wrote software to automatically scan paper checks, OCR and MICR data, and then do ACH transactions...
After seeing all the problems and insecurity in the banking system I now keep at minimum of 1 month of expenses in hard cash in my safe at all times, and I have multiple accounts at different credit unions, and I stop using banks completely.
If you have enough money in the bank to buy groceries you have enough money to take out of the bank and put in your mattress for groceries.
Also HN will probably get upset for me saying this but a few grams of gold or silver or other goods easily tradeable like whiskey or ammo never hurt anybody and might buy you a pig to slaughter or something.
I remember, a few years ago, Cupertino being targeted for burglaries because the Indian and Taiwanese immigrant populations had a penchant for storing wealth in gold and silver and cash under the mattress, respectively. The victims’ recovery rates and timelines were far poorer than these BofA customers’ will be.
That happens a lot in many segments of the population. When my uncle was detective, there were similar incidents among the orthodox Jewish community, as the cultural preference from the diamond trade was instant settlement. It’s also easier to move gold across borders. Many folks were hesitant to call the police which made it worse.
Prepper people get targeted alot as well. One dude in my hometown was a victim of a home invasion, held hostage and lost about $250k of guns, ammo and silver. You don’t hear alot of about this stuff because typically these communities are not exactly following the letter of the law from a tax perspective.
Which is an interesting comparison because these are not the only immigrant populations that do this, there are large groups of immigrant populations in Texas who are largely unbanked or underbanked or have cultural penchants for using gold and silver as stores of value, but there has been no concerted effort to burglarize them, because strings of home invasions in Texas usually end up with the home invaders in a body bag regardless of who they decide to target.
Probably because these statistics are based on reported burglaries as opposed to the actual number of burglaries. It's my impression from various threads and news articles that people in California have given up on reporting all sorts of crimes due to the lack of prosecution.
1: The data is obviously completely bogus unless you believe there were only 11 burglaries in Florida in all of 2021. You can't draw anything from it.
2: Texas is the second most populous state, so total # has little value. You need the per capita number to understand whether their might be some deterrence happening. Unfortunately the Statista data is garbage, so it isn't worth calculating.
Thanks for that link. Looks like its a mixed bag between Texas and California. Out of the 9 crime statistics, California is better for 5 while Texas is better for 4. And sometimes the differences are small. For example for burglary, the rate is 392.8 for Texas while 392.8 for while 386.1 for California.
People report gun theft in order to make possession of it unambiguously a crime same as with cars and other serialized property.
Nobody with a brain actually thinks the police in the next state over are gonna seriously suspect them of something when their handgun inevitably gets recovered in an unrelated crime.
Property crime rates are going to be suppressed in Texas among the (undocumented) immigrant population because of a justifiable lack of trust between them and police. (https://onlinelibrary.wiley.com/doi/full/10.1002/pam.22221) The NCVS should give better data, but I'm damned if I can find it.
The recovery rates and timelines are only relevant for the cost. The key part is that its failure is uncorrelated with bank failure. It's not either/or, but rather multi-source redundancy.
Don't use any one system exclusively. Even if you rely wholly on your normal person checking account and electronic payments, have a few grand stashed away in your house in cash. Sometimes the lights go out, and ATMs with them.
hey, this is pretty neat to see a word count summary up front
> ( 2341 words, approximately 13 minutes reading time. )
I'd love to see that in every article and perhaps have some css setting that I could globally twiddle for every website so folks could opt in or out as they please. I suppose an extension could possibly tackle it too if the semantics are correct on the page.
You're responding to a concern about society with a suggestion for individuals. It may be good advice for individuals, but do you think most people are going to follow it?
Great response - even if I can buy a pig with bullets it doesn't help anything else. That assumes you can butcher and store the meat. This seems like a kind of bikeshedding argument - the bike shed is built so don't worry about the actual nuclear reactor, you can always just hide in the bike shed. Doesn't matter how well built the bike shed is - you're still surrounded by nuclear fallout
People have no trouble conceptualizing insurance. We have car insurance, home-owners insurance, life insurance, etc.
But what about "every day life" insurance? It doesn't take much cash on hand or some staples in the cupboard to protect against a wide variety of temporary "glitches" in life. Glitches can be anything from surprise weather events to things like your bank accounts becoming temporarily unavailable.
Importantly, insurance is not an investment we intend to get a return on. It's a cost.
Heh, I didn’t even notice the covid paper products shortage on accounts of having every day life insurance in the form of a Costco membership and having bought toilet paper some months before. Buying in bulk isn’t even a cost, the cost of capital sitting idle in the form of a shelf of stuff I won’t need for a long time is more than made up for with the volume discount.
Not only are the bulk beans a tiny fraction of the cost per bean, they’re fresher and higher quality.
Also it is an investment that returns in time savings. Buying 50 rolls of TP takes the same amount of time as buying 1.
The problem with buying in bulk is that it requires the money up-front and that works only if you can save enough money at least once. Poor people can be permanently cash-strapped, so they never manage to get to the point for that upfront investment.
I can't help you with the $ problem, but if storage space is your limiting factor you can buy commercially packaged "survival food" that comes in #10 cans and/or 5-gallon buckets. A 2-week supply of food at 2k calories per day takes up about 2 5-gallon buckets. #10 cans can be stored under a bed. You'll additionally need water and a way to heat it. I think most of them can be eaten cold, but that seems very unpleasant.
This, obviously, is a different strategy than buying bulk and cycling through your regular eating. A 1-2 week supply is plenty for most people. You aren't trying to become a prepper, you're just wanting to get through a crazy blizzard/hurricane/whatever.
Same here, we try and keep 3 months supply of groceries on hand from costco at all times. Once a month we look through what won't last 3 more months and stock up, and once you actually figure out what you need it's surprisingly cheap. For example we skipped our December trip because of the holidays and so spent around $1100 for our family of six. Which sounds like a lot but when you stretch it out over 2 or 3 months that less than $100 a person. I'd recommend everyone who can does this.
you have any tips for managing expiration dates? Me and the wife were getting into this subject recently. I'm considering buying a barcode scanner and just have an in and out spreadsheet that somehow I manage. Still tinkering with a few ideas. We have a big family and there's potential for a lot of food waste if not managed properly.
The way we do it is we just take the new stuff and put it at the back so the oldest stuff is at the front. The other thing is we only buy things we know we eat regularly. So we have 3 months worth of applesauce, goldfish crackers.
We also freeze anything that isn't in a can or a sealed, so bread we usually buy 4 loaves and freeze 2 or 3, and accept we'll have to get more from the store before we go.
The limitation is we can't get things from Costco that aren't used regularly, for example, we don't go through enough cream cheese to buy Costco size, and it doesn't account for all our food needs. But if tomorrow I lost my job we know we could survive without having to go to the store for anything but milk and eggs* for the next month or two.
* Hopefully we'll remedy this in the summer with chickens.
Yah physical arrangements to support turnover are good. That's so true on that point about the rate of consumption for different food types is just irregular.
I've been contemplating somehow tracking the pounds of food bought per trip as a quick informer on the spot. The tricky thing is that the kids are growing so their consumption has a steady ramp but not yet enough for a timely consumption of stuff like cream cheese etc. Lots of products seem to be in the 2lb range. 2lb is actually a good deal of food I'm finding out.
This only works if you don't live in a dense city. People in cities simply don't have space to store (many) bulk purchases, and the stores near them (i.e. that don't need a car) don't sell things in bulk (transporting bulk items by public transport is not feasible, and it's too expensive by Uber).
When I visit friends who live in dense cities they are very excited that I have a car, and often ask me to take them to make some bulk purchases.
I don't think that's accurate. The bigger issue is economic access - poor people can't afford to stock up since they are often living paycheque to paycheque. Even middle class folks living in dense urban centres have access to car shares and delivery services. Yes there is a cost, but it's usually quite cheap.
As for storage, except for the smallest apartments, most storage spaces can be optimized quite a bit for very little cost just by purchasing containers that fit spaces properly, have good seals, and abandoning commercial packaging, especially for products that are packed for shelf appeal, not bulk storage.
Sure, that's a problem. But that's not the problem I was talking about.
> have access to car shares and delivery services. Yes there is a cost, but it's usually quite cheap.
It is most definitely not cheap! You can't buy much because you don't have room, and the cost savings of what you can buy are destroyed by this added expense, making it pointless.
> most storage spaces can be optimized quite a bit
Sure - up to a point. I mean you can also just fill your bedroom with stuff, and have a narrow corridor to walk in. But realistically, people in dense cities just don't have much space for bulk purchases.
I think "1 kilo of food per person per day" is a reasonable approximation (e.g. 1kg of dried beans is 3300 calories, 1kg of canned tuna is 1300 calories). 400 kilos of food should be enough to last a family of 4 for 3 months. Efficiently packed, you can fit 400kg of food in a 0.5m x 1m x 1m space (1 large kitchen cabinet).
It's a fair bit of space, but it's not a "fill your bedroom with stuff" amount of space.
The problem with efficiently packing that is you won't have access to it easily, in order to rotate stock.
If you are not careful you'll end up with spoiled food when you need it.
Plus there's a lot more to stock than just food - It's not just about disaster preparation, we're also trying to save money and packaging and resources.
I know this subthread is talking about saving money, but imo that shouldn't be the first priority. The first priority is avoiding disaster. Insurance costs money up front. The "cost" you are insuring against is being without food after a hurricane/blizzard/etc. If you can ALSO save money up front, that's great.
If you live in a dense city, you may be better served by getting a commercial "emergency food supply" product. A 2-week food supply from one of the major suppliers of such products is about $125 and fits in 2 5-gallon buckets. Alternatively, you can get similar foods that come in #10 cans, they store nicely under a bed.
I use these products for backpacking and they will obviously never match a real home-cooked meal but they are decent in a pinch.
That covers you for food (you will need water), and just expanding your paper goods slightly should be plenty. You're not trying to become a "prepper", you just want to get through a bad week.
I live in a downtown highrise, have a car. It works with a shelf for added storage which takes up 5 or 6 sq ft. Having the space for, say, a chest freezer, would up my game a lot but I can do plenty of bulk purchases with what I have.
I always figured the cost of the additional square footage in a home per property tax etc was part of the equation. There's some cost for additional size usually. But if you're already paying that cost better to get some use out of it in the form of bulk storage for sure. I suppose there's a freedom to store in having that space. I like the time saving angle, I was looking at old receipts last month and am always stunned by the slice of life they capture. I had transactions where I'd go buy filtered water. Since buying a RO device I never had to haul water any longer. Such a different time of life, definitely saving time there.
I was right there with you. Dealing with the deliberately obfuscated price/sizes of TP/PT bothers me, so my life is much improved if I only do it ~once per year. And paper products are exactly the type of thing you can easily put on the top shelf of a closet and stack to the ceiling.
In the event that you are trading gold and silver and ammo, your first problem will be holding onto your gold and ammo in the first place. Which means if you are prepping for this scenario, your first order of business is to be part of a tribe willing and able to defend you.
This is why I believe leadership in urban environments would quickly turn over to existing city gangs in a collapse scenario. Maybe the police would be one gang that controls a fraction of the city.
Urban gangs already have the required tribal associations, intimate understanding of the terrain and resources therein, and the propensity to commit violence that would be required to take control.
Any of us good citizens who keep our heads down, go to work, avoid violence at all costs, and individually prep for a collapse without building existing association to a coherent tribe will end up quickly dead or subservient to these existing tribes.
If we're in a situation where society devolves to the point where people have to trade whisky or ammo for a pig to eat then half of us are going to end up murdered for anything valuable to begin with.
If it gets to that point we're (or at least a non-trivial fraction of us) gonna end up murdered not because people want what we have but because by the time things fall apart like that people will hate us and want us dead.
French revolution, Russian revolution, Europe's religious wars during/after the reformation, etc, the professional classes of people who built and maintained "the system" don't tend to do to well at the hands of everyone else when it finally keels over.
Slaughtering a pig isn't some trivial process, it requires skill and equipment that most people lack. But even if it was doable and a person trades their emergency gold for a couple weeks of food, then what? Any disaster that reduces society to pig bartering isn't likely to be fixed in a short amount of time.
As some other replies have said - the best and most reasonable hedge is to rely on your community and have good bonds there. Doesn't matter how much cash you have if people don't care about that anymore, the best option is to have social bonds and have a community to support you, no person is an island etc
$100 under your mattress for the future is not worth nearly as much as giving that money to a friend to help them cover rent today
Under what situation could that possibly be useful where all society hasn't collapsed?
You're not going to lose access to your bank account because the bank failed; the FDIC handles that. It just moves to a different bank over the weekend.
Locked out because Chexsystems thinks you're a financial criminal is more in the direction of possible.
> Under what situation could that possibly be useful where all society hasn't collapsed?
In a natural disaster type situation it could easily be the difference between being able to get what you need stay put the whole time or running out of some supply you didn't think you'd need and having to evacuate half way through the follow-on mess and losing quite a bit to looters and/or the environment.
The other person who replied mentioned more mundane stuff.
It's curious to me that this is downvoted, I am practically a crypto evangelist and have been since the beginning but even I acknowledge that the BTC network's capacity is extremely, extremely low. It's not suitable as a world-wide transaction engine, not even for relatively infrequent transaction types like store of value accounts that don't move around. There have been some half-hearted attempts to fix this (lightning network for example) but nothing that actually provides substantial throughput. Bitcoin Cash was an attempt to improve it incrementally but that was pretty solidly rejected by the community (and wouldn't have really solved the problem anyhow)
I think it's fair to say BTC has a capacity problem, and it's not just a technical one - it's also a cultural aversion to change in the base protocol and cultural aversion to extension of the base protocol to allow additional abstraction layers that could solve the problem.
If we take a step back, we should also realize that no other cryptocurrency has this problem. You just let the throughput be higher and it works, because 1 KB/s is completely absurd in 2023.
Any transaction still has to make it on to the chain. A side chain would be like us playing catch in the back yard and thinking we will somehow be padding our major league baseball stats. It doesn't matter until something happens where it counts.
If you find someone to play catch with, that's great, but the whole point of a global transaction network is that anyone can send a balance to anyone else.
Lightning has a fundamental graph theory / routing problem. As the number of nodes increase the path between those nodes grows at a nonlinear rate. The internet has this problem too, which it mainly solves by letting a human put a finger on the scale in a centralized fashion. Lightning network cannot make this tradeoff. It's a simple mathematical problem that we've known about for centuries and it's baffling that anyone thought it would help in the first place.
Stop using facts, math, information theory, and other malarkey when discussing crypto. They are all clearly not important to the goal of pumping and dumping. Thanks.
I trust my ability to keep a small file (or more realistically: 24 random words that can be committed to memory with some effort) secure more than I trust any corporate entity that treats the penalties for screwing their customers as a mere cost of doing business.
Crypto has many failure cases but a generalized loss of all transfers for all wallets is simply not one of them.
Does this work for your average hospitality worker, or is it really only a solution for the techno elite?
In every institution I’ve worked at if you do something that accumulates fines you and your management get fired. Since it’s a small street, you also effectively get blacklisted. They’re also highly influenced by their credit rating and credit spreads for day to day operational financing, which negative reputational events directly impact. Boards are also really unhappy with these situations and C level folks are often fired. I think you understate the consequences, even if the bank itself can afford to pay the fines.
And yet gargantuan financial institutions keep getting fined for various kinds of misbehavior, on a what seems to be a regular basis. The one that sticks out in my mind aside from this kind of failure was the systematic fraud perpetuated by Wells Fargo. Are any execs in prison or was it just financial fines (i.e. cost of doing business) and job losses for the lower level peons who executed the (plausibly deniable) orders?
You will have to forgive me for being entirely unsatisfied with that level of accountability.
Re: ease of use, I think crypto skeptics tend to intentionally overstate the knowledge and skill required. We're not exactly at the "grandparent safe" level yet, but framing it as something only for the "techno-elite" isn't fair either.
This isn't a defense of the corporate banking structure.
The cognitive load necessary to grok crypto currencies doesn't displace that which is required to utilize existing financial solutions, it's just adds to it. It's also less forgiving and has fewer safe guards or regulations.
For most people, crypto is just an added layer of obfuscation and complexity with some speculative gambling sprinkled on top. It benefits few and only when utilized by many.
It's like cash, if cash were a bar of wet soap you had to hold onto while riding a roller coaster in the rain.
To grok something and to utilize something are two entirely different levels of understanding and it is not honest to conflate the two; most people don't grok the existing financial infrastructures either.
Grok was the wrong word then. I wasn't conflating the two but rather emphasizing that the amount of cognitive load needed to utilizing crypto in our society is far higher than what's needed to use a cash, bank card, or even credit.
I disagree. At least from the standpoint of the average end-user; sending or receiving a payment with a mainstream cryptocurrency is not meaningfully more difficult than doing that with something like PayPal or Cashapp. Different, but not more difficult.
And this is with a wallet where you control your own keys. If you use a centralized site like Coinbase then is basically indistinguishable from something like those other apps.
Crypto isn't terribly hard, depending on the exact context you have in mind when you say 'crypto'. It boils down to keeping your key safe and accessible, or in the custody of someone who can keep your keys safe and accessible.
You can literally stamp your keys into some steel plate, bolt them somewhere safe in your house, and forget about them for 30 years. You use a hardware wallet for your day-to-day and a separate hardware wallet for your savings account and transfer between as needed.
It's not for everyone, but it isn't hard - it's just new context.
After the Thanksgiving holiday over the course of 2 weeks, I fabricated and installed individually addressable permanent LED holiday lights on my three story house and built out a control box for less than $1000. It wasn't hard... for me.
You likely already posses a great deal of knowledge necessary to leverage crypto that a lot of people don't. It's not hard... for you.
That's not an argument that makes much sense to me, because we do things every day that require a great deal of context and training. At some point someone taught us how to operate a steel missile that burns hydrocarbons to propel us onto a road network where we need to be able to interpret symbols, colors, and complex pre-arranged maneuvers in order to allow us to negotiate this system and not die. That took maybe a few weeks to figure out.
Crypto is not hard, it's in fact quite simple. It's just a matter of training people on a couple of simple rules. You don't need any pre-existing skills, you don't need any expensive equipment, you just need to be motivated to spend a few hours learning a new thing.
Money loss of this kind does not happen because the interest of the custodian is misaligned. The bank does not make a profit if your money goes missing.
Technical errors can happen regardless of what the custodian wants
I have five people in my household. Only one of them, not myself, doesn’t regularly loose important stuff. We are super adept at key replacement, Drivers License replacement, passport replacement, debit card replacement, etc. I travel with two phones, two laptops, and two kindles.
At this point if I haven’t lost my debit card in six months, I will just report it lost to change the numbers.
I have worked at financial institutions; while they are not infallible, they are all better at this stuff than my family, and usually work in teams for important stuff.
Zelle transfers into an institutionally insured checking/savings account at a major financial institution are pretty safe and people will get their money back. Zelle transfers from non-BoA accounts will have the records at the other banks to prove the transfers existed and they can be recovered that way. If BoA really lost the records and don't have backups and people lost transfers from BoA to BoA accounts and neither BoA account has a record of the transaction, it will just be a hassle for customers probably having to fill out some forms and wait a while.
I got scammed by a Zelle transfer when someone used my phone (without my authorization). I didn't even know I had Zelle but it's built into the BofA app. I lost $3,000. BofA refused to refund any of the transfer or reverse it. Total trash feature. I didn't sign up for it. I don't want it. BofA signed me up for it. I'm changing banks because of it.
My girlfriend also lost 3000. Somehow money was sent from her phone to someone in Texas. We contacted chase and they said "you did it" so no refunds. But we didn't! She works from home and there is no other IP other than her phone in her Chase account. So how did this happen? We filed a complaint with the Police and tried to figure out what we can do through other channels. Turns out nobody cares!
You let someone use your phone and they were able to open BoA app and transfer funds without your knowledge? I don't fault BoA for ignoring your claim, that's like handing someone a credit card and acting surprised when they use it and wanting the CC company to refund your money.
As a long term foreigner in your country. Yes. Y'all are incredibly honest.
You would NOT leave 20+ credit card under the supervision of an underpay bartender in France.
Stuff would happen.
If the toilet automatically signed me up for a service that would dispatch little robots to collect all my spare cash and deposit into a bank account when someone sat on it and asked it to I might have some pointed questions for the toilet company.
What 'toilet company' has an analogous service relationship like a bank does to their customer and would be in a position to resolve it?
In the other example they gave, you would expect the credit card company to work with you to resolve the fraud. Similarly, if a stolen vehicle gets tickets, you don't expect to have to pay them and then try to collect from the thief.
If a scammer gets your CC number (in meatspace or online) and makes fraudulent purchases you can dispute them and get the charges reversed, so maybe not the best example.
The banking consortium invested in Zelle to put pressure on Visa and Mastercard raising fees; but this is a perfect example of how the banks product isn' as time tested or consumer protecting as credit cards (with US financial regulation)
You're right about the debit cards. But "premium" accounts offered by banks often have insurance for these too (you get that for free if you make around 2x average wage).
Insurance for what? You don't get insurance for someone writing a check against your account or making a debit using your pin. Similarly, you don't get insurance for a Zelle transfer from your mobile because you gave it to someone else.
If you close the BofA app after you are done, you have to log in again with either password or biometrics. If you don't and just go to the home screen, it stays logged in.
It might leave you logged in for a short period of time (in case you are planning to back to the app), but it logs you out relatively quickly even if you do not “close” the app.
This seems like a remarkable oversite on BofA's part. I'm with a comparitively tiny US credit union, and even their app demands a pin code to return to it if I switch to another app mid-session.
take them to small claims court, $25 to file online. It costs them money to respond otherwise you get a summary judgment in your favor. Only way to get them to change is to flood them with costly procedures.
Banks see it as a source of revenue. I don't have sources, but I recall stories where debit transactions were processed out of chronological order and caused overdrafts which then kicked off hefty fees for overdrafts of something like a dollar.
Having a bank service break and causing your funds to be unavailable, or having negligent processing that can't keep up with modern banking, is much different than passing hot checks.
You generally can't pay rent in cash, and the last place I lived wanted $20(!!!!!) in service fees to pay online through _any_ means. They got a hand-delivered check each month.
So yeah, they're pretty common here still, mostly in businesses that haven't kept up with the times.
Yes, definitely! Not that common, but sometimes useful for big in-person purchases or down payments. I have needed to write one maybe once in the last five years. Banking apps let you deposit by taking a picture.
But I’ve received a few checks as gifts or payment.
Yeah, I just got paid with one the other week. It was the easiest way to take money when the person has no tech savvy (and can't figure out how to send an ACH)
Last year, my first month salary in the US came in the form of a check, since I didn't have my bank account ready at the time. So yeah checks are still common.
Same. It seemed ridiculous. The whole process of writing a check and having the cashier do special things because of that is so arcane at this point. Plus the lady missed out on a good dollar or two of cash back if she were to have used a credit card! She was old but not THAT old.
It is not exactly the same thing. The commenter you are responding to is looking to avoid overdraft, not having an insurance on overdraft.
I'd agree with the idea of avoiding overdraft entirely unless a customer signs up for it. I don't want transactions I can't afford to go through. I manage my accounts quite closely. For me such situation would be 99% an unintended transaction that I would like to cancel.
By letting such requests go through, banks put the burden on the customers to clean up after a wrong or, in many cases, illegal transaction.
I turned overdraft coverage off at my bank. You can turn it on and off on-demand through their website. If your bank won't let you do this, consider another bank.
Then they charge $30 to reject the transaction, another $30 when you go "odd and try to swipe again", then extra money because you didn't have the $30 to cover the fee in your account, then recursively until you're $1200 in the hole and they're refusing to cover it.
More than likely those weren't overdraft protection since i think are only opt-in now. There are fees for having a negative balance which is outside of overdraft protection. There is no way to prevent an account from going negative like with ACH reversal.
Does anyone have context of the content as the original post is gone from Reddit?
Also on my BoA App, I have the notification:
> Please Note: Zelle transactions made between and January 17 may be delayed in occurring and posting to accounts as requested. Transfers will be completed and will appear in your account activity and balances as soon as possible. We apologize for any delay or inconvenience.
Not to discount the stress that it induces, and our expectations as customers, but hopefully it's a blimp in their servers.
Correct text, copied from BoA web site: Please note: Zelle® transactions made between January 14 and January 17 may be delayed in occurring and posting to accounts as requested. Transfers will be completed and will appear in your account activity and balances as soon as possible. We apologize for any delay or inconvenience.
Phone support: "Due to extenuating circumstances, we are not able to take your call at this time."
Interesting. I don't agree with the concept of 'cashless' society. This is no paranoia, conspiracy theory. I don't know if this is the first time this happens but this is one to many times for most people.
The healthy thing is to have multiple options ranging from cash, credit/debit cards, up to apps with NFC payments, etc...
There has to be a limit on how much tech is too much. This goes for every human facet (medicine, law, etc).
HN likes to trash Bitcoin, but at least you can understand where the pro-Bitcoin folks are coming from. If a cashless society is inevitable, would you prefer that all such transactions be mediated by a small number of large corporations? Or would you prefer the option of at least some of your transactions happening through a peer-to-peer system that no corporation or government controls?
Bitcoin doesn't have an undo button. I know somebody who works cybercrime and they routinely get people their money back after being scammed. If they were scammed into using bitcoin that money is gone.
Some of us would much rather take a tiny chance at being "scammed" than the certainty of being at the mercy of the government, the banks and the payment processors. In an ideal world, both of these choices would be available to adults to manage their risks and their own finances as they saw fit, rather than being forced into the latter system "for their own good".
And when digital money is lost due to fraud or error it can be restored.
For example, in 30 years of banking I have lost $0.00 in digital money. Sure, there have been gas station skimmers, system outages, misplaced debit cards, but I haven't "lost" a single cent.
I have lost at least $20.00 in real physical money.
$0.00 < $20.00
Digitalization helps other things too, I've lost hundreds of dollars in misplaced transit cards. Back in the 90s when I was a broke punk some loser stole a transit card with ~$47 on it. That was (and is) a big deal. Others have been misplaced or damaged beyond hope.
Since digital transit cards became a thing I have lost $0.00 in transit funds.
When my older relatives wanted to send money to family/friends, I used to recommend Zelle, which was better than the never-heard-of-it apps they were considering. But with all the problems I keep hearing about Zelle, they're off the list. Most of them have iPhones and so I just tell them to send cash via Messages/Apple Cash. I don't know how reversible that sort of thing is, in the case of fraud, but as long as they can see the messaging history with the person before they send it, it seems like that's a pretty low risk.
I no longer recommend Cash App (formerly Square Cash) because they explicitly removed the ability to have inbound transactions be automatically deposited into your bank account.
They left it on for anyone who already had it on, but I specifically signed my dad up on the assumption that sending him money would be as frictionless as possible. Instead, Square/Block would love for that money to stay in the Cash App account, not actually available for him to spend in his own account.
I continue to use Cash App because I continue to have this feature; if they ever remove it, I'm gone.
I got burned by the Cash app as well, with bait-and-switch tactics around their merchant discounts. Their system had problems registering merchants correctly, so the discounts pretty much never went through for me. I tried to get support but they didn't care. I bounced.
I don't actually blame them for this, because they have to make money somehow. If they make money by having your money in your account for a few hours/days, idc.
So long as they make it frictionless to start a withdrawal - a tap or two, that's all I ask.
For my dad, Auto Cash Out was exactly the "frictionless" experience he needed, and he didn't need any of the BS Cash App wants to put in front of him.
I'm happy to help Square/Block make money with my engagement/interaction with Cash App, but they clearly can't figure it out without severely harming the UX in the process.
Brit here- I usually send money to friends and family using bank transfers with internet banking- it’s instant, there’s no fee (AFAIK) and all you need are someone’s account number, and sort code, which everyone has.
Is this just not an option in the states? It’s insane to me that y’all use (need??) third party apps for something as simple as sending money around.
Zelle is basically the US attempt at instant bank transfers. You can set it up and use it through your participating bank's app or through their online portal.
FedNow is no different from Zelle; it seems to me banks could still mess it up, and most of the complaints here (that you can't reverse a transaction you sent) would still apply to it, since that's kind of the point.
"FedNow Service features will help participating financial institutions conduct investigations and provide returned funds connected to fraud and errors. Beyond mitigating fraud through the design of the service, Stanescu noted that the Fed is exploring opportunities to collaborate with the industry on consumer education and outreach programs to help identify and prevent scams and promote strong enrollment and authentication processes. In the meantime, the value proposition inherent in irrevocability remains intact: receivers have protection and a guarantee that good funds have hit their account and can be used immediately."
My biggest complaint with Zelle is my bank helps me by including Zelle in my bank account with easy setup. Some banks it's just included. I'd like a hard lock out on it.
Wow this is the first I've seen of this, amazing it hasn't come across my radar. Seems like a major consolidation, tied closely to a government institution (or whatever the FRB technically is).
Can you explain what you mean by consolidation? It's essentially a standards-based collaborative approach not unlike other large payment networks like in the UK, Europe and India.
Apologies for the armchair commentary. "Consolidation" meaning commerce regulation and oversight more tightly consolidated than possible with technology (including paper notes) currently used.
> ...standards-based collaborative approach...
You have not said this explicitly, but for myself it is notable that this is not peer-to-peer, with both parties collaborating based on a standard. Instead it is clearinghouse. Unlike peer-to-peer standards, this would give the Fed Reserve at least a large dataset or at most a large control lever. From the linked article:
> Through financial institutions participating in the FedNow Service...
> Consistent with the Federal Reserve’s historical role of providing payment services...
There are a few bank-to-bank mechanisms (ACH, wire transfers) but they're slow (often multiple business days) and often have fees associated with them ($20+ for wires).
The lack of good transfer mechanisms is what has led to a proliferation of alternatives (e.g. Venmo, Cash App). Zelle has emerged as a bank-approved mechanism for "instant" funds transfer.
> had wires come in over the years and never participated in a conference call
Same. That said, if your transaction history is sketchy (e.g. large cash withdrawals following international wires) or the wire is coming from or going to a high-risk place, e.g. Russia or Turkey, your bank may opt to do this as an anti-fraud / anti-money laundering measure.
Sending an ACH is nearly free, banks just don't expose it because of the very poor experience when you get one of the numbers wrong. You can ACH people all day with Transferwise.
This is possible if both people use the same bank (Bank of America, Wells Fargo, Chase), but even with the relatively consolidated finance sector, the odds of this are not super high.
It wont be a popular answer here but Facebook Pay now Meta Pay is a great product. It is instant, as in, you can send someone standing in front of an ATM money, and they can pull the money out seconds later. Not pending, but completed deposits. For free.
It is the "it just works" way to move money between peoples debit cards in the US. It is rock solid, a large network of us use it all the time, and it is significantly more frictionless than Paypal/Venmo/Cashapp/Zelle when you already talk on Messenger. 4 clicks and the money appears.
Oh that's pretty cool. It looks like there are no fees for the service (at least for now), where Venmo has a 1.75% fee ($0.25 min $25 max) and Cash App has a 0.5%-1.75% fee ($0.25 min) for the same instant withdrawal service.
It also doesn't require the banks cooperation, and has pretty high limits at 10k per transaction, and per month. Basically facebook fronting money because it believes it can trust the profile.
I suspect the personal side of it will remain free. It's a gateway drug to having your card on file. Then there is less friction when you see something on marketplace you want. They can recover money on the marketplace side of things.
Does Meta Pay have a checking account as part of each account that you can withdraw from directly via an ATM? Or does Meta Pay need to transfer the money into a 3rd party checking account that you can then withdraw from? That second step may not be instantaneous, depending on which bank the account is at.
Good to know, that is pretty useful for immediate transfers. I've done transfers between accounts at the same bank before, using their own website, and it still takes like 24 hours to leave 'pending' state.
PayPal/Venmo/Apple Cash also support instant transfers through this method - basically it just charges a negative amount to your debit card. It's not always free though, and most people don't actually need "instant" unless they're standing in front of an ATM.
I've never recommended Zelle. Tales of their complete lack of customer service, consumer protection, and unwillingness to be held accountable are not new. ACH is archaic (and has its own dangers e.g. pull transactions) but it generally works.
I believe that one of the design considerations between the banks that developed Zelle was specifically to move more liability to the customer for fraudulent transactions.
False. Every time you transfer money from an account at one bank to another you're using ACH. Same with moving funds from banks to stock brokers or brokers to banks.
The real reason it doesn't compete is its slow, and many banks have terms of service that say something like "You can only set it up between accounts you own" so sending to other people is often technically a violation of your agreement with a bank.
I guess I'll be the lone voice in the wilderness. We've been perfectly happy with Zelle.
We use it a couple times a month to pay service providers, send money to family. Never had any issues with it, don't need an "app" for it, works with our normal bank stuff.
Similarly, at the same time, we got a check recently from a settlement. We plonked it into our account, and it bounced. It was a large settlement (i.e. lots of people), and the law firm in charge of writing the checks messed up, and thus canceled all of checks and re-issued them a couple weeks later. It was a big deal. Stuff happens.
Hopefully BofA owns up and refunds all of the overdraft problems, but they can't roll it all back. Bouncing checks have repercussions out of the banks control (landlords tend to frown on bounced checks, for example), which behooves them to be more diligent about things like this that can impact that.
The big problem is that people are out of the loop for things like this. Computer pulls the money back, computer bounces the check, computer notes the bounced check, computer tells the other computer you bounced a check, computer craters your credit rating. There are no "people" involved in this, it's all procedures and rules and such encoding is the "logic" of one of the most inscrutable creations man has ever created -- the computer. And people have to scurry about to compensate for the vast ripple effects these things can have that impact peoples lives.
So, hopefully BofA cleans up their end, but more importantly, hopefully everyone down stream is patient with those affected and helps them recover as well. And, finally, no doubt a legion of scammers will crawl out of the wood work leveraging this event to gain some advantage. Way of the world.
You are happy because you have not seen how much better things can be. Zelle is very poorly designed. It is possible to send money to numbers which do not exist. Even if the number does exist, you have no way of knowing whether the person you are sending to is correct or not, since you enter their name information yourself, instead of zelle fetching this and asking you to confirm it.
how does the recipient of a zelle transaction know if it’s tax worthy (aka needs to go on 1099) or just sending money to family? i don’t see a way to “tag”/“flag” transactions
> Zelle® does not impose taxes on transactions made on its network. If payments you receive on the Zelle Network® are taxable, it is your responsibility to report them to the IRS. If you have any questions about your tax obligations, please consult with a tax professional.
Zelle is the choice of scammers. Incidentally, Zelle offers no guarantees or refunds. I don't know why anyone would use Zelle under those circumstances. Some banks will automagically sign their customers up for Zelle accounts, exposing them to scam risks for which there is no resolution. Money gone.
IMO, the risk is pretty minimal. Zelle isn’t a 3rd party payment platform — it’s a feature/standard a bank implements to give you instant peer-to-peer bank transfers. Zelle the company is owned by the banks, including Bank of America.
So this is just BoA adding a feature they partly created to their banking suite. That in itself isn’t a red flag.
Zelle itself is also secure. You have to be fully logged into your bank account to use it! So it’s as secure as any banking service.
The reason someone would use Zelle is p2p bank transfers between people you know. Like if your friend wrote you a check to cover their half of a hotel on a vacation. Just replace that with Zelle. It’s better than, say, Venmo because it goes directly between bank accounts immediately, without the intermediate third party and waiting 3 days for Venmo to give you your money.
The only risk you’re exposed to is if you blindly send money to someone you don’t know, which you shouldn’t be doing on most platforms. (For example, you only really get buyer protection using goods and services type transfers on other payment apps, which have extra transaction fees.)
I think the end line is that banks should have better fraud protection for bank accounts. Including debit cards, ACH, checks, and Zelle. I supposed my summary is that Zelle isn’t really unique. It’s just faster bank transfers
Zelle has been subject to tens of thousands of scams. If it's so secure, why doesn't Zelle have any guarantees? If money ever goes out, it will never come back, unlike competitors such as PayPal which have a successful refund process.
The argument is that Zelle helps you hand your friend a $20 and is secure in that context. If you use it out of that context you are using it “incorrectly”.
Yup, this happened to me. I didn't sign up for Zelle. Didn't know I even had it. I lost $3,000 and BofA refused to reverse or refund any of the charges. Total BS.
"Zelle transactions made between Jan 14 and Jan 17 may be delayed in occurring and posting to accounts as requested. Transfers will be completed and will appear in your account activity and balances as soon as possible. We apologize for any delay and inconvenience"
That's what Bank of America says on the mobile app. I sent a couple of Zelle payments on Jan 15 and Jan 17. They payment I sent on Jan 15 is missing on my side.
EDIT: an hour later, BofA fixed my Zelle Jan 15 transaction.
All bank transfers and reversible. Some easier then other, but none are no-recurse, regardless what a low tier customer service agent insists. It may require more effort, and maybe someone above their pay grade, but it is possible.
And Zelle itself, like all electronic bank transfers in the US, is subject to regulation E, which puts the responsibility for unauthorized transfers on the banks (minus $50, a sum that most banks would waive). Zelle themselves mention regulation E on their website: https://www.zellepay.com/financial-education/pay-it-safe/und...
Some institutions erroneously claim that regulation E only protects from hacks: that is, if the scam was offline: someone convinced you to send them money, and you did, and got scammed, then it doesn't fall under regulation E. However, it seems the regulators disagree, and banks and Zelle do fall in line once you sternly write to their compliance department and the regulator reminding them of that.
Sending money to a scammer tends to be an authorized transfer; you made it yourself, intentionally. The Zelle page you said itself states "Because you authorized the payment, you may not be able to get your money back."
I would not hang my hat on a Regulation E complaint in this scenario.
I think you are both sort of correct. The pertinent bit of regulation E[1] appears to hinge on how the fraudulent transfer was done.
It looks like if you as the authorized person transfer money to somebody because you were scammed into doing so, then the regulation does not apply. However, if you were scammed into giving up your, say, debit card number or password, and this was used to to initiate transfers, the regulation does apply. The magic words here are "access device" and "unauthorized".
That being said once you start throwing around laws that the average consumer doesn't know about, on certified letters directed at important people, the bank very well might make you whole rather than fight it even if you have no case.
The intent (which is how law and regulation are interpreted), as expressed in the regulator comments on the regulation (e.g. 2(m)-4 at the link above), was to make sure the cost, to consumer, of using electronic services, is the same as having a human do the task.
Just imagine calling, or going to the bank to make a similar transfer to a scammy zelle one. I assure you the person you'd be speaking to would have to ask you some very pointed questions about that transfer, and not out of the goodness of their hearts.
banks try to replace humans with software to reduce their costs; reg E basically is "you're only allowed to harm your own workforce doing so, not your customers"
Zelle can write that water are dry, it will not make it so. The customer intended to authorize a non-scammy transfer, but was scammed into authorizing himself into a fraud. As such, regulation E holds.
And if there's something bank fears is someone reminding their regulator the bank may not be following regulation to the letter.
It has been made very clear that regulation E is meant to held banks responsible for misuse of electronic services. For example, if you are coerced to draw money out of an ATM, regulation E holds, even as you authorized the withdrawal with your card and PIN code (it also makes perfect sense: there's assumption the same wouldn't be as easy had you had to use a teller for that withdrawal).
Nothing in Regulation E indicates an intent to cover intentional transfers by the account holder to scammers. Quote something specific if you disagree.
> also see official interpretation 2(m)-4 there
None of those scenarios match "I willingly sent money to something that turned out to be a scam". At all.
Each example in that interpretation is that of an unintentional transfer - bank employees doing it, stolen devices, being under duress.
Wire transfers aren't reversible if you're not quick enough to do it before the money transfers out of the country. Home purchases and business wires have both seen over a billion dollars in wire fraud annually, just in the US.
Wire transfers are also reversible. It may not be easy or cheap to do so, but it is possible (the Citigroup $500mm mispayment is a great example: the error was done August 2020, and Citigroup are still working to undo it, at an expense to them. I'm certain it'll take them a few more months, and God only knows how many more billable hours at the very least).
This is reversible in the sense that every transaction is reversible in some form. Somebody stole your wallet? Chase them down in the parking lot and reverse the transaction.
In practice for more common fraud cases, we're seeing billions of dollars actually lost. Maybe the expense of retrieval would be higher than the value. Or it could be that the perps simply convert the money to cash, at which point it's gone. That's basically what happened to the $81 million fraudulently transferred from Bangladesh's account with the NY Fed:
Is it still reversible when the money is sent to Turkey or Kazakhstan and tracing and investigating the ultimate destination of where it went (likely to a bunch of bank accounts set up by nominees or stolen identities and ultimately to Binance or the local equivalent) would require almost as much money as the loss?
Yes, if the funds are not taken away from the destination account and if the Turkish/Kazakh bank is cooperative, but not when funds are cleared out of Kazakh/Turkish banks.
It's not reversible by Zelle, but it is reversible by the bank. Zelle is just an intermediary between banks. Some banks make it easier to get a fraudulent transaction fixed than others.
I like Zelle, as it is not considered a payment network for tax purposes. Second, it enables money transfers between trustworthy parties. Instead of sending a check for $x (less than, say $3k), I can transfer $x right away to a friend/acquaintance.
This is true for most payment apps, to be honest. Buyer protections are limited without using something with transaction fees, like a credit card or PayPal goods and services.
The only time you’re using these apps for payments to unknown 3rd parties is buying on the used market. For local buying, you meet in person, in which case Zelle is fine since you can see the goods. For remote buying (like r/hardwareswap), you’re supposed to use something with protections like PayPal Goods and Services, or /also rely on the platform.
There are phishing scams associated with PayPal too, for example.
Is it true that if I had $50K in a bank, for the sake of example let's use Bank of America, and the bank just straight up loses my account and loses track of the fact that I had that money with them, FDIC does not ensure I get my money back? Would I just be reliant on the bank having good will towards me and giving me my money voluntarily? Is there any consumer protection that actually protects the consumer against business malpractice like this if FDIC doesn't?
Also, plenty of runs end in the FDIC resolving in a way that the parent bank no longer exists.
Managed buyouts are preferred partially so that the government does not have to deal with the logistics of running a retail bank, but mostly because if a bank with sufficient funds takes over then there is no interruption to depositors’ access to funds.
The FDIC is required by law to use the plan for handling a failed bank that will cost the least to its fund.
Buyouts offers that cover all insured funds are typically cheaper than directly paying out. Indeed, most commonly the buying bank will offer to take all the full balance of any insurable account, not just up to the insurance limit. The logic here seems to be that the extra from taking on those balances is usually pretty small, and it does save work on the FDIC's side as there would be fewer creditors. Thus it makes bids with that include full balances more attractive than those that don't, increasing the chance that the buyer's bid will be selected for final resolution.
Of course, occasionally the winning bid is limited to just insured balances, and very occasionally, the cheapest option is for the FDIC to directly cut checks to handle the insurance side, and proceed as receiver in selling off any saleable assets and paying of creditors.
Amateur moderation is awful and often exploitative.
I moderated a sub for about a year. At the time I felt like I was furthering a worthy cause. In retrospect I now feel like a schmuck who basically gave free labor to a company, making the platform more attractive to advertisers. I don't expect the hours I spent combing through troll posts had any measurable impact on the "cause" that sub was nominally furthering.
In general I no longer contribute content to platforms that directly leverage my contributions to more effectively pull in advertising or subscription fees. After seeing first-hand how moderators I "worked" with operate, I also assume any moderated social media content is corrupted by the moderators' biases.
In order for moderations to be sustainable and high quality, you need a large number of people who are: (a) intelligent, (b) unbiased, (c) willing to volunteer their time without compensation, (d) happy if someone else makes a profit off their work, & (e) willing to do the job forever.
There aren't many people like that.
More typically, they don't understand (c) or (d) in the context of moderation, or (a) and/or (b) are lacking. And once they do understand (c) and (d), (e) evaporates.
Twitter and Facebook repeatedly show how very wrong "professional" moderators get it. Almost like caring about a topic makes you better suited to maintain a community around it.
The other side of the coin is that many communities wouldn't exist without Reddit, and many wouldn't be tolerated by Reddit without moderators. Many subs have been closed for inadequate moderation. So you see it as free work, I say you get what you give. You want a nice place to chat? Pony up. Cash or effort.
> Almost like caring about a topic makes you better suited to maintain a community around it.
I think not caring about the topic makes you better suited to moderate it. It's way easier to dispassionately and evenly enforce rules when there's no possibility of a bone to pick.
Having skin in the game, wanting your community to blossom makes for much better moderators and community governance. They're far more likely to get involved in big tasks to fix long-standing issues. If rules need to change knowing the moderator calling for change helps a lot with acceptance.
My experience with paid moderators is they work in systems where they are vastly overworked so their willingness to actually engage with issues is low. Poor decisions get made. I've reported child porn and drug sales on Facebook and had a mod say they're okay. I have a few dozen examples like that. A lack of passion isn't good.
reddit mods are paid by outside companies and interest groups to specifically get access to places so they can control narratives
non-associated mods get offers from companies and interest groups for them to be in their favor
other, more nefarious mods have their own botfarms that they use to control narratives in their own massively popular subreddit because the police don't arrest themselves
media corporations, companies with specific interests, and intelligence agencies have all learned to play this game, reddit should have put the spots up for auction
> In retrospect I now feel like a schmuck who basically gave free labor to a company
You mean, like you're doing right now? Comments on HN can't be deleted after an hour because they add value to HN forever. And by being here you're adding value to them. Basically free labor.
The problem is that most of the time, threads like that quickly devolve. They go from intelligent, thoughtful conversation about an issue to people ranting, throwing insults, personal attacks, etc. Or just armchair financial experts giving terrible advice. (Par for the course with that particular subreddit)
Money can quickly become a heated discussion. I'd assume behind that thread is a wall of much worse comments that had to be removed. Removing them all gets exhausting, and sometimes it's better to just lock the thread and move on.
I really don't think they care one way or the other about BoA.
I will bet the do for the people who wade through customer support, but the vast majority of folks likely will just improve their profits by paying fees they shouldn’t have accumulated.
ACH never "completes", there's no confirmation in the system. The bank merely decided 3 days is enough time to assume there isn't a reversal coming, but some reversal reasons can be expected to take up to 60 days.
Some banks have been offering "two days early payroll"; that just means they see enough transactions for your paycheck that they've decided to just trust it.
I hate how hard it is to do bank transfers in the US.
When I was in Sydney, you just added someone's BSB and account numbers, and you could add their phone number and most apps would know how to translate that... and you could Vemno / Zelle without the app.
Dirt simple.
No clue why it has to be complicated in the US. Just seems moronic.
The stickied mod comment reproduces the post's contents.
> If you bank with BoA check your balance this morning. Our account is negative due to thousands of dollars in Zelle transfers suddenly vanishing overnight. Calling customer service goes nowhere, just dead air.
Always have checking\financial accounts at two different institutions. One of them can close your accounts or have delay accessing your money at any time and never have to give you a reason.
Instant, no-fee, irreversible transfer between participating US bank accounts.
(Like most of the rest of the world has had for a decade or more, but it's new, and because it's new and there's very little education to consumers from the banks it's heavily used in scams. It also has a pretty confusing UX that lends itself to scams.)
Or remind the banks that regulation E puts the responsibility of fraud (minus $50) on them.
US banks got scared by money transfer apps, and decided they want to provide a similar service, at no cost to customers, and minimal cost to them. Of course, they can't have it all, and now they try to put some costs they are not allowed to, onto their customers.
See the Zelle "getting started" page at https://www.zellepay.com/get-started - there's no solid set of instructions because there's almost two thousand different implementations of it. Your bank's procedure may be entirely different than mine's; if your bank doesn't support it it's a different procedure alltogether.
As a result, scammers can fairly easily convince someone who's never or infrequently used it that their process (usually with a phished website posing as Zelle) is legit. The "it's a banking technology, but it's also a website and an app, maybe, it depends" thing doesn't help.
It was pretty wild when I logged into one of my other bank accounts and it said I could not use Zelle with that account because I already had Zelle linked to a different bank account. So I had to unlink it from the other account first. Isn't it common for people to have more than one bank account, and wasn't this the case when Zelle was developed, relatively recently? Why did this use case not cross their mind when they developed it?
> Why did this use case not cross their mind when they developed it?
I don't know the answer, but seeing as Zelle was developed by a consortium of big banks, it's at least possible they simply don't want to support this use case, because making it harder to have multiple accounts benefits incumbents.
I believe a single Zelle identity can only be linked to a single bank account, and a Zelle identity consists of an email address, phone number or both. Typically it's the "both" option, but I think that in theory you could create multiple identities with multiple email addresses, and link each to a separate bank account
They can not disallow doing that (as you wrote, they are required to), but they do make it very hard, because they are unwilling to put up the cost. However, the regulator mandates they should: what needs to be done is make sure they are always taken to task, and that the task is extremely easy to perform.
You can never really prevent scams, it is what it is. However, they need to keep a paper trail and reverse bad transactions.
If someone impersonates me or steals my debit card, they can do a bad ATM withdrawal and get cash. That can be reversed, but for some reason once Zelle is in the picture everything is written in stone.
Just to be clear, Zelle's irrevocability doesn't legitimize criminal acts or fraud. It just means your bank won't help you untangle the mess.
It's rare that a lawsuit against a fraudster or thief goes anywhere, but depending on the amount lost, it can be worth it to obtain a default judgment, which can typically be collected for 10 years. If you can identify the person or entity that took your money, they might eventually have enough assets for you to collect.
Even before instant transfers, standard SEPA was quick and easy. The big step forward was when they let us add beneficiaries from a phone app or a website rather than by sending verification codes over snail mail, but that was a while ago now.
> most of the rest of the world has had for a decade or more
What specific system are you implying?
In Slovenia, I can't make a bank transfer online when my bank is closed (at night). Money transfer between banks costs me 40 cents per transaction and international transfer in the EU costs me around 7 €.
Maestro card is instant and free and works even when the bank is closed, but it is only used for spending money.
I don't pay any fees for my bank account, since I'm younger than 27.
EU countries (and a few others) are part of SEPA, where we have SEPA Instant Payments, which offer instant payments between bank accounts, 24/7.
Price depends on the bank (and the type of bank account you have), but it's about
1 EUR or less.
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Many countries also have local payment systems, that are usually limited to a single country. For example, in Slovenia, we have Flik Pay, which allows sending money between individuals via mobile app, without any fees, and it also works 24/7.
I see - probably the Nujno (urgent) checkbox on a SEPA form activates this SEPA instant payment.
I know about Flik and I like the appeal of it, but I do not use it because it requires a proprietary client (NLB Pay in my case). Do you know of any public or reverse engineered specification or unofficial FOSS client?
> international transfer in the EU costs me around 7 €
Are you sure about that? I thought with SEPA all Euro transfers within the EU have to be the same fee as national transfers, which is free for almost all consumer bank accounts in Austria.
My bank charges for instant transfers on my business account (around 8€), but other than that all transfers are free.
Lots of banks (at least in the EU) give free accounts to young people (usually until 25 or 27), in the hope that they'll stay a customer for life, because changing your bank account number is a hassle.
Reversibility means risk incurred on the transfer system which means not free. Reversibility to the people you pay also means you pay a premium as the vendor has to self or externally insure the risk the funds will be recalled.
"Instant" is wrong. I've had successful Zelle transfers take upwards of 60 minutes to clear without any sort of confirmation of progress. It's a real pain.
From everything I heard, the system in Germany/Europe is better than ACH, but instant interbank transfers are only a few years old, and usually are not feeless.
> The bank data reviewed by Warren’s office suggest even the bulk of unauthorized cases are going unpaid. For example: PNC Bank indicated that its customers reported 10,683 cases of unauthorized payments totaling over $10.6 million. It refunded only 1,495 cases, totaling $1.46 million.
Zelle isn't a bank, it's just a mechanism to communicate a transfer between two banks. The bank at either end of the transaction is regulated and must reverse fraudulent transactions. The fact that PNC is not reversing all of them means they just need to be subjected to additional legal process to enforce existing law.
It doesn't matter what banks accept; they are required to by the regulator. That they try to weasel out of it just means they need to be regulated harder and at more cost to the executive suit.
> It doesn't matter what banks accept; they are required to by the regulator.
Regulation E (https://www.consumerfinance.gov/rules-policy/regulations/100...): "'Unauthorized electronic fund transfer' means an electronic fund transfer from a consumer's account initiated by a person other than the consumer without actual authority to initiate the transfer and from which the consumer receives no benefit."
How is "I willingly initiated a transfer to someone who turned out to be a scammer" within this definition?
Competent (non-software) professionals would read the initiation as the intent, also see comment 4 there, suggesting the mindset of the regulator. As a reminder, regulations are always subject to the interpereation of the regulator, which, as history shows in the case of regulation E, tends to side with the consumers.
There's a deeper story here though:
* Banks are given a monopoly to almost literally print money. We ceded control of a very important facet of daily lives to them.
* The cost for that is tight regulation, meant to make sure they keep the trust invested in them.
* In the case of Zelle, and some other new products, banks, rushing to market, try to ignore their side of the deal.
* Suggesting we should give up and accept that is morally, regulatory, and legally wrong.
* Regulators and policy makers seem to agree with the above.
The expandable "Official interpretation of 2(m) Unauthorized Electronic Fund Transfer" section makes it pretty clear what sort of things they consider to be covered under the regulation. If they thought it covered scams, it's highly likely they'd say so there.
Elizabeth Warren's recent investigation brought this up as an issue, as well. I think regulation should cover the scam use case, but it's pretty clear to me it currently doesn't.
Whenever people pushed the banks, they were made whole. The problem with any such issue is that it requires some knowledge and patience on how to get the bank to comply, and most people lack those (through no fault of their own: this isn't trivial).
> Whenever people pushed the banks, they were made whole.
That's a good strategy to keep the heat off and avoid new regulation actually being made to cover the scenario, especially when it's a rare step taken by consumers. I tend to do the same if someone chargebacks us at work; it's not worth fighting, even if we're legally in the right.
My bank varies the limit for me each day. Sometimes I can’t transfer $1000. Sometimes I can. Once I tried to transfer $3000 over many different days. No way. Can’t do it. Customer service says the limited cannot be raised past a certain point. And they won’t tell me what the limit is.
Have some physical cash, a couple of bank accounts, stocks and bonds, cryptocurrencies, valuable items if chaos ensues (guns, ammo, fuel, etc) and so on.
Well does Bitcoin have anyone with $50 billion dollars on hand and an additional $500 billion dollar line of credit with the US government to cover things like the FTX collapse?
Today it's Zelle, but what happens when you and everyone you know wake up and check your bank account and get an error. Suddenly can't buy food? So on. Sure, they keep backups. You hope. Do they test restoration? What would have to go wrong deep in the depths of a financial system creaking along on 1970s technology in order to really throw a wrench in things?