alt Hacker NewsThe optimal amount of fraud is non-zero.
This statement is obvious to anyone who has any experience dealing with fraud, but shocking if you haven’t thought much about it.
It’s actually impossible to completely prevent fraud on a platform because there are so many variations of fraud that can’t be prevented up front.
They could demand in-person DNA samples to open an account and there would still be some fraud.
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The simple fact is that you can't just open an app and then let it destroy the lives of people with absolutely no connection to it. The company itself must be responsible. Saying "the optimal amount of fraud is non-zero" is only acceptable if the cost of that "non-zero" amount is borne by the company itself; otherwise the result is plainly misaligned incentives.
The optimal amount is zero, but the realistic amount is non-zero.
You're the second person who doesn't seem to realize that fraud prevention requires proper actions before and after fraud is detected/suspected. Failing to react properly on fraud protects the fraudsters - like CashApp has done - and makes the platform a magnet for fraud.
CashApp failed to investigate and provide vital information to victim while she was being investigated - they did that too late only after they were compelled to do so by the court and lawyers, creating a very hard situation for the victim and allowing the fraudsters to cover their tracks.