Ruining Trust by Taxing Mistrust: the False Negatives Scam

I’ve had Mastercard problems for a few years now—on overseas trips they frequently reject transactions. I would call to reinstate. They would say they’d fixed the problem. They hadn’t.

6 months ago they said getting a business card would help. I did. It didn’t.

I’ll be brief; this is not meant to be a bitch session, but an exploration.

October 23, Netherlands: MC rejects a $15 charge for hotel internet access.

October 24, 8AM, I call: “it won’t happen again, Mr. Green.”

October 24, 10AM: I try to change an airline ticket; card rejected. I call: “well, there is a lot of fraud outside the US boundaries, Mr. Green." (Oh, the xenophobia). "It won’t happen again, Mr. Green.”

October 25, Kuala Lumpur: Buying ticket to Singapore; card rejected. I call: “It won’t happen again, Mr. Green.”

October 25, Singapore: checking into hotel. Card rejected. I call: “It won’t happen again, Mr. Green.”

An hour later, rejected again. Ditto a day later.

I finally wise up and insist on talking to a manager. Unbelievably, what I hear is this:

“Yes, I can see you’ve had this problem with unnecessary rejections for over a year now. And yes, we’ve been giving you the highest clearance each time, but that only lasts a day. The automatic limit rejection triggers kick back in the next day. But I can put in a request to the review committee to get you permanently approved at a higher level, even outside the national boundaries.”

This is a business card? And now you tell me I have to call mommy every time I want to fly or stay in a hotel? But never mind.

The issue is—why is this happening?

It is not a unique event. It is an example of a broader phenomenon, and it’s not a good one.

In medicine, we have to weigh the value of a false positive vs a false negative. What’s worse? To be told you have breast cancer when you don’t, or to be told you don’t have it, and find out later you did.

The medical industry in the US has responded resoundingly: we’ll take a ton of false positives so as not to incur a single false negative. And not just so we won’t get sued. It’s also because the patient pays the price of false negatives—economically and emotionally. It costs nothing to lay it all off on the consumer. The consumer is the insurer of first resort.

We all pay the price. We pay it in tons of unnecessary medical tests, because doctors are paranoid about being sued.

We have taken a social decision—how much to invest in health care for the ill—and subjected it to good old capitalist economics and to market-economy politics. When political correctness meets social policy, the businesses involved—medicine, insurance, credit cards—will massively opt for self-protection at the cost to—you guessed it, the consumer.

You are the one who pays for unnecessary medical tests. You are the one who pays for screening everyone at airports. You are the one who pays for statistically absurd radon protection when you buy a house.

And you (and I) are the ones who pay so that Mastercard doesn’t have to incur any losses. Because in fact, legally, they, not me, are liable for the bulk of fraudulent purchases. But we, not they, get to shoulder most of the costs. Fraud costs up? Just flag every transaction that’s online and outside the good ol’ USA, and lay it off on the customer.

Give the poor customer service reps training in empathy (which means tell them to say “I apologize” for things they had no part in). Retract your retraction the following day.

Oh yes—and tell the consumer it is all being done in their best interest. After all, you wouldn’t want someone to steal your credit card and use it for fraudulent purposes, would you?

Actually, right about now I would.

Ability to travel freely around the world with a credit card? Priceless. For everything else, there’s Mastercard.

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