Citi to Refund $330M to Credit Card Customers It Overcharged(nytimes.com)
nytimes.com
Citi to Refund $330M to Credit Card Customers It Overcharged
https://www.nytimes.com/2018/02/23/business/citigroup-credit-card-refunds.html
7 comments
I don't want to defend all regulation is evil strawman, and I don't know if this particular regulation is good or bad but your argument looks very weak.
A proper value comparison would be 'cost of all audits caused by this regulation' vs 'benefits gained from mistakes found by it'. You also need to assess risk reduction, what kind of risks it protects from and set a value on that. Then you could realistically say if it's net positive or not.
And when something is mandatory across industry it's easy to price in directly to consumers because nobody can compete on it, so this likely doesn't eat on a bottom line but increase price for consumers.
Again not trying to argue that this or all regulation is bad, just that your evaluation of what's working seems deeply flawed.
A proper value comparison would be 'cost of all audits caused by this regulation' vs 'benefits gained from mistakes found by it'. You also need to assess risk reduction, what kind of risks it protects from and set a value on that. Then you could realistically say if it's net positive or not.
And when something is mandatory across industry it's easy to price in directly to consumers because nobody can compete on it, so this likely doesn't eat on a bottom line but increase price for consumers.
Again not trying to argue that this or all regulation is bad, just that your evaluation of what's working seems deeply flawed.
> A proper value comparison would be 'cost of all audits caused by this regulation' vs 'benefits gained from mistakes found by it'
I don't think accurately captures it and is certainly not fair to the customers. The cost is not from the same source.
Let's say audit cost per year is $100, and savings per year is $100:
If they choose to forgo auditing:
Citi: $200
Customers: -$100
If they do auditing:
Citi: -$100
Customers: $100
It's apples and oranges. Regulation is about the customer and societal protections, not the protection of the company's profits. If a regulation is sound in terms of need but too expensive for a business, we shouldn't do away with the regulation altogether.
As with your post, this isn't defending all regulations or that specific parent argument, just pointing out that the cost on the company being regulated versus money saved is not a valid metric for deciding if a regulation is needed. The regulation accounts for many more intangibles such as fair customer protections, and again, is not aimed at the value of the regulation for the company being regulated, though a regulation that causes a needed private business to be unprofitable is likely not sound.
I don't think accurately captures it and is certainly not fair to the customers. The cost is not from the same source.
Let's say audit cost per year is $100, and savings per year is $100:
If they choose to forgo auditing:
Citi: $200
Customers: -$100
If they do auditing:
Citi: -$100
Customers: $100
It's apples and oranges. Regulation is about the customer and societal protections, not the protection of the company's profits. If a regulation is sound in terms of need but too expensive for a business, we shouldn't do away with the regulation altogether.
As with your post, this isn't defending all regulations or that specific parent argument, just pointing out that the cost on the company being regulated versus money saved is not a valid metric for deciding if a regulation is needed. The regulation accounts for many more intangibles such as fair customer protections, and again, is not aimed at the value of the regulation for the company being regulated, though a regulation that causes a needed private business to be unprofitable is likely not sound.
I think those numbers don't add up?
Starting situation(note there are only 100 bucks): Citi: $0 Customer: $100
Without audit: Citi: $100 Customer: $0
With audit(a): Citi: $0 Customer: $0 Government: $100
Alternate with audit(b): Citi: -$100 Customer: $100 Government: $100
But citi can't run negative as a whole. Its a business, if it didnt make money, it would shut down. So A is whats actually happening with the numbers provided.
Starting situation(note there are only 100 bucks): Citi: $0 Customer: $100
Without audit: Citi: $100 Customer: $0
With audit(a): Citi: $0 Customer: $0 Government: $100
Alternate with audit(b): Citi: -$100 Customer: $100 Government: $100
But citi can't run negative as a whole. Its a business, if it didnt make money, it would shut down. So A is whats actually happening with the numbers provided.
I think the math could be corrected slightly for clarity, but the general point still holds I think: the money is not apples and oranges here.
Where does the government get the $100 from? The audit isn't conducted by the government as far as I'm aware, just mandated by them. Correct me if I'm wrong there of course.
> note there are only 100 bucks
That's my whole point: there isn't. The money they accidentally stole from customers (and eventually are now giving back) is different from the money they spent to conduct the audit, regardless of if for any given audit they find money that was misplaced.
> But citi can't run negative as a whole. Its a business, if it didnt make money, it would shut down.
People are acting as if this audit's cost will run Citi out of business, which I would find very hard to believe to be the case. If you actually read my post carefully, I too believe a regulation that causes that is likely flawed.
My whole point is being missed here: some good regulations can cut into profits of businesses and still be worth it from the perspective of the society as a whole. Only once a regulation is so strong of a profit cut that a needed business cannot exist is a regulation likely flawed. Of course, there are many other ways for a regulation to be flawed as well.
Where does the government get the $100 from? The audit isn't conducted by the government as far as I'm aware, just mandated by them. Correct me if I'm wrong there of course.
> note there are only 100 bucks
That's my whole point: there isn't. The money they accidentally stole from customers (and eventually are now giving back) is different from the money they spent to conduct the audit, regardless of if for any given audit they find money that was misplaced.
> But citi can't run negative as a whole. Its a business, if it didnt make money, it would shut down.
People are acting as if this audit's cost will run Citi out of business, which I would find very hard to believe to be the case. If you actually read my post carefully, I too believe a regulation that causes that is likely flawed.
My whole point is being missed here: some good regulations can cut into profits of businesses and still be worth it from the perspective of the society as a whole. Only once a regulation is so strong of a profit cut that a needed business cannot exist is a regulation likely flawed. Of course, there are many other ways for a regulation to be flawed as well.
> Where does the government get the $100 from? The audit isn't conducted by the government as far as I'm aware, just mandated by them. Correct me if I'm wrong there of course.
Well the bank is not keeping it, and the consumer is not keeping it. So whoever got that money got it because government said they should. They could be independent accountants but for any purposes, the government gave the money to the auditors, being their own or someone elses.
> That's my whole point: there isn't. The money they accidentally stole from customers (and eventually are now giving back) is different from the money they spent to conduct the audit, regardless of if for any given audit they find money that was misplaced.
Thats what you want to believe, but the money they get to spend on the audit all came from customers, they didnt come from the pockets of management. So if you want to believe the money was not taken from customers in this instance, it was in another instance, and now the problem of analysis expands into other areas.
> My whole point is being missed here: some good regulations can cut into profits of businesses and still be worth it from the perspective of the society as a whole. Only once a regulation is so strong of a profit cut that a needed business cannot exist is a regulation likely flawed
Regulations affect company profits in a different variety of circumstances: it depends on the elasticity of the supply. If you put a regulation on ALL banks, then there is no chance in supply, meaning that the consumer bears the entire cost of regulation.
Regulation affects profits of companies, generally by increasing the margin and decreasing the amount, because small companies cannot compete on regulations, the supply decreases, giving big players an advantage.
Remember how they just made it costly to have an account with little money with the bank? That's because it costs money in regulatory compliance. And the bank quickly wants to get their money back or they don't provide the service.
Banks are a special case of market for many reasons, for their capacity to destroy, for their leverage, for their relationship to the government. They have better cases for regulation than most markets. But the original thread made a claim it cannot sustain and i called it out on it.
Well the bank is not keeping it, and the consumer is not keeping it. So whoever got that money got it because government said they should. They could be independent accountants but for any purposes, the government gave the money to the auditors, being their own or someone elses.
> That's my whole point: there isn't. The money they accidentally stole from customers (and eventually are now giving back) is different from the money they spent to conduct the audit, regardless of if for any given audit they find money that was misplaced.
Thats what you want to believe, but the money they get to spend on the audit all came from customers, they didnt come from the pockets of management. So if you want to believe the money was not taken from customers in this instance, it was in another instance, and now the problem of analysis expands into other areas.
> My whole point is being missed here: some good regulations can cut into profits of businesses and still be worth it from the perspective of the society as a whole. Only once a regulation is so strong of a profit cut that a needed business cannot exist is a regulation likely flawed
Regulations affect company profits in a different variety of circumstances: it depends on the elasticity of the supply. If you put a regulation on ALL banks, then there is no chance in supply, meaning that the consumer bears the entire cost of regulation.
Regulation affects profits of companies, generally by increasing the margin and decreasing the amount, because small companies cannot compete on regulations, the supply decreases, giving big players an advantage.
Remember how they just made it costly to have an account with little money with the bank? That's because it costs money in regulatory compliance. And the bank quickly wants to get their money back or they don't provide the service.
Banks are a special case of market for many reasons, for their capacity to destroy, for their leverage, for their relationship to the government. They have better cases for regulation than most markets. But the original thread made a claim it cannot sustain and i called it out on it.
> Thats what you want to believe, but the money they get to spend on the audit all came from customers, they didnt come from the pockets of management. So if you want to believe the money was not taken from customers in this instance, it was in another instance, and now the problem of analysis expands into other areas.
> Regulations affect company profits in a different variety of circumstances: it depends on the elasticity of the supply. If you put a regulation on ALL banks, then there is no chance in supply, meaning that the consumer bears the entire cost of regulation.
I think that's a fair expansion of scope, but something unmentioned here is that customers are not uniform in benefits received. Paying for the regulation ends up a bit like paying for insurance here - you may pay more this year, but it can save you against anything catastrophic.
> Remember how they just made it costly to have an account with little money with the bank?
Not at all banks by any means. Different banks offer different perks and spread around the cost differently, turning knobs like interest, fees, service quality, etc. There are still a good deal of options in the sector.
> But the original thread made a claim it cannot sustain and i called it out on it.
This has divulged a bit, though in interesting ways, so not without reason, but which claim is false specifically?
> Regulations affect company profits in a different variety of circumstances: it depends on the elasticity of the supply. If you put a regulation on ALL banks, then there is no chance in supply, meaning that the consumer bears the entire cost of regulation.
I think that's a fair expansion of scope, but something unmentioned here is that customers are not uniform in benefits received. Paying for the regulation ends up a bit like paying for insurance here - you may pay more this year, but it can save you against anything catastrophic.
> Remember how they just made it costly to have an account with little money with the bank?
Not at all banks by any means. Different banks offer different perks and spread around the cost differently, turning knobs like interest, fees, service quality, etc. There are still a good deal of options in the sector.
> But the original thread made a claim it cannot sustain and i called it out on it.
This has divulged a bit, though in interesting ways, so not without reason, but which claim is false specifically?
>I think that's a fair expansion of scope, but something unmentioned here is that customers are not uniform in benefits received. Paying for the regulation ends up a bit like paying for insurance here - you may pay more this year, but it can save you against anything catastrophic.
That was my point - you need to assess this and then add it to cost benefit analysis. Saying that it's worth it just because caught a random error that amounts to 300M$ is very bad reasoning that can be used to justify very bad legislation. And unfortunately people accept this kind of reasoning from politicians. I expect more from HN.
That was my point - you need to assess this and then add it to cost benefit analysis. Saying that it's worth it just because caught a random error that amounts to 300M$ is very bad reasoning that can be used to justify very bad legislation. And unfortunately people accept this kind of reasoning from politicians. I expect more from HN.
I never made that argument though. My original post was simply stating that there are regulations that can cost more to the companies than it saves consumers that are still good. A simple "is this profitable to the company" test is not a good measure for a regulation.
> As with your post, this isn't defending all regulations or that specific parent argument, just pointing out that the cost on the company being regulated versus money saved is not a valid metric for deciding if a regulation is needed. The regulation accounts for many more intangibles such as fair customer protections, and again, is not aimed at the value of the regulation for the company being regulated, though a regulation that causes a needed private business to be unprofitable is likely not sound.
> As with your post, this isn't defending all regulations or that specific parent argument, just pointing out that the cost on the company being regulated versus money saved is not a valid metric for deciding if a regulation is needed. The regulation accounts for many more intangibles such as fair customer protections, and again, is not aimed at the value of the regulation for the company being regulated, though a regulation that causes a needed private business to be unprofitable is likely not sound.
Is it profitable to company is irrelevant, is it profitable to the consumer is what matters (including value of risk mitigation)
Companies don't make money out of thin air. In general, if something costs the company money they will pass those costs onto the consumer (or cease to exist).
If your regulation costs more than it saves consumers, then it'll need extraordinary justification, i.e. all of the costs are carried by only few consumers.
If your regulation costs more than it saves consumers, then it'll need extraordinary justification, i.e. all of the costs are carried by only few consumers.
Nope there is competition so Citi can’t just increase interest rates across the board and add a bunch of new fees. The shareholders will take most of the loss.
If Citi tries to increase prices, Amex and Chase will laugh and scoop up their customers. Very few people are “stuck” with Citi
If Citi tries to increase prices, Amex and Chase will laugh and scoop up their customers. Very few people are “stuck” with Citi
If all the banks have the same regulation, then there is no elasticity. Taxes that affect every supplier the same typically fall on the consumer.
They are welcome to reduce cash back given on their credit cards or other means of increasing profits. Something tells me that the banks and credit card companies will do just fine here with the additional cost of the audit. It's a tiny fraction of their budget, and should absolutely be done, even if it costs double what it saves consumers, as that money is much more valuable to the consumers and the companies can still very much exist, pay employees, and even make a nice profit, despite losing money by auditing regularly to comply with a regulation.
> It's a tiny fraction of their budget, and should absolutely be done, even if it costs double what it saves consumers
This is mind boggling. Its the equivalent to arguing in favor of burning assets. Why would you make people work on things that reduce value?
This is mind boggling. Its the equivalent to arguing in favor of burning assets. Why would you make people work on things that reduce value?
To ensure people are charged what they should be? I'm mind boggled that people are so centered on the business that they can't fathom a reason for anything beyond profit or other purely economic factors.
To take this to ridiculousness, we wouldn't stop chasing murderers if we found out that it cost more to chase them than clean up the bodies after. It's because we care about murder beyond its net economic value. And no, I don't care about the specifics of "oh maybe people being more scared of getting murdered will decrease GDP". My point here is that this is a clear case where value is brought beyond economic value. Regulations are often too in this category, though obviously a bit less than law enforcement.
To take this to ridiculousness, we wouldn't stop chasing murderers if we found out that it cost more to chase them than clean up the bodies after. It's because we care about murder beyond its net economic value. And no, I don't care about the specifics of "oh maybe people being more scared of getting murdered will decrease GDP". My point here is that this is a clear case where value is brought beyond economic value. Regulations are often too in this category, though obviously a bit less than law enforcement.
> To ensure people are charged what they should be? I'm mind boggled that people are so centered on the business that they can't fathom a reason for anything beyond profit or other purely economic factors.
If you pay more than you would have, you wouldn't be paying what you have to, you are paying more. Its like putting an inspector on a bus to check tickets, but he gets the money from all the bus tickets collected.
Missing the forest for the righteousness.
> To take this to ridiculousness, we wouldn't stop chasing murderers if we found out that it cost more to chase them than clean up the bodies after. It's because we care about murder beyond its net economic value. And no, I don't care about the specifics of "oh maybe people being more scared of getting murdered will decrease GDP". My point here is that this is a clear case where value is brought beyond economic value. Regulations are often too in this category, though obviously a bit less than law enforcement.
The comparison to murder would be for the state to kill everyone suspected of a crime so crime murders go really down.
If you pay more than you would have, you wouldn't be paying what you have to, you are paying more. Its like putting an inspector on a bus to check tickets, but he gets the money from all the bus tickets collected.
Missing the forest for the righteousness.
> To take this to ridiculousness, we wouldn't stop chasing murderers if we found out that it cost more to chase them than clean up the bodies after. It's because we care about murder beyond its net economic value. And no, I don't care about the specifics of "oh maybe people being more scared of getting murdered will decrease GDP". My point here is that this is a clear case where value is brought beyond economic value. Regulations are often too in this category, though obviously a bit less than law enforcement.
The comparison to murder would be for the state to kill everyone suspected of a crime so crime murders go really down.
It is true that money doesn't come out of thin air, but it doesn't always get passed on. I worked at a place that had some billing issues. It wasn't cheap to correct, but it was the correct thing to do. Where did the money come from? Out of the next few months of profits. Things were tight, but customers were happy.
If there were regulations forcing an expensive audit, I'm sure we would have built that into the cost of business and passed it on - but not the results of our mistakes.
If there were regulations forcing an expensive audit, I'm sure we would have built that into the cost of business and passed it on - but not the results of our mistakes.
That's different, though. That's a one-time cost. One time costs don't necessarily get passed on, but ongoing costs do, otherwise the company will simply go out of business.
I guess a company shouldn't regularly defraud its customers beyond its ability to pay if it wants to stay in business.
Seems simple enough.
Seems simple enough.
Wouldn't the pressures of the market also dictate the price?
The market may dictate they reduce profit or other incentives over increasing the cost of their product.
The market may dictate they reduce profit or other incentives over increasing the cost of their product.
> ...if something costs the company money they will pass those costs onto the consumer...
They don’t have to do that, though.
They don’t have to do that, though.
Honestly if Citi stole $1000 from me but now everyone has to pay $0.01 towards an audit so everyone can get their stolen money back, it’s worth it. They stole the money and they should pay it back with interest. I don’t care if it’s expensive for them because they didn’t build in basic mathematical safeguards when their business is literally charging interest on numbers.
I’m not sure where this idea comes from that companies pass all costs on to customers. Citi does have profitable quarters and unprofitable quarters. If they have to take a $350 million charge off for overcharging people, then they will have a less profitable quarter and their shareholders will have to deal with it. If they try to jack prices way up to cover for it, then many people will just switch to Chase or Amex since they have better deals anyway. It’s like saying we shouldn’t charge Volkswagen for the emissions scandal because our cars will get too expensive. In reality, VWs will stay at basically the same price. If they got more expensive right after they got caught cheating everyone, then they simply won’t sell.
I’m not sure where this idea comes from that companies pass all costs on to customers. Citi does have profitable quarters and unprofitable quarters. If they have to take a $350 million charge off for overcharging people, then they will have a less profitable quarter and their shareholders will have to deal with it. If they try to jack prices way up to cover for it, then many people will just switch to Chase or Amex since they have better deals anyway. It’s like saying we shouldn’t charge Volkswagen for the emissions scandal because our cars will get too expensive. In reality, VWs will stay at basically the same price. If they got more expensive right after they got caught cheating everyone, then they simply won’t sell.
I just bought a Volkswagen, not only are they not more expensive, they’re substantially cheaper than they were a few years ago.
The whole value comparison thing is weird because rules are not always made to gain net positive value. Because if they did then stuff like Universal healthcare will never happen.
Secondly, businesses are a complex beast. It's not a simple debit/credit and there are tons of different schedules which run simultaneously. It is easy to get lost - whether it is customer's or the business' own money. So, every business run audits and reviews. Banks more so because they have other people's money. The only difference is whether they have legally mandated to share the findings and take corrective action.
Secondly, businesses are a complex beast. It's not a simple debit/credit and there are tons of different schedules which run simultaneously. It is easy to get lost - whether it is customer's or the business' own money. So, every business run audits and reviews. Banks more so because they have other people's money. The only difference is whether they have legally mandated to share the findings and take corrective action.
I don't disagree with you - I just wanted to point out that "see this caught 300m$ error therefore it's worth it, and it also validates other regulations" (which is how I read OP and a common line of reasoning I see in public debates) is dangerously wrong because it ignores costs completely.
How about we say: Some regulations are good, some are bad.
This seems like a really good one :)
This seems like a really good one :)
Every regulation was enacted with specific circumstances in mind. If you think a particular regulation is bad, try to look into the history and see why it was relevant in the first place.
I have to concur with parent in some circumstances. I was looking up what are some weird regulations. I didn't find much, perhaps I was not using the right terms. But this one strikes me: License to Close a Business [1].
When it comes to protecting consumers, for example, regulations are generally not bad. Some regulations have been removed because some people want "efficiency" - and again, we have to pick the circumstance. Too much regulations (getting permits from 10 different agencies is slow) can drive up the cost (more application fees, higher construction cost due to delay), but too little or too lax can do harm. We all face this at work as software engineers...
[1]: https://wislawjournal.com/2010/11/03/regulations-show-courts...
When it comes to protecting consumers, for example, regulations are generally not bad. Some regulations have been removed because some people want "efficiency" - and again, we have to pick the circumstance. Too much regulations (getting permits from 10 different agencies is slow) can drive up the cost (more application fees, higher construction cost due to delay), but too little or too lax can do harm. We all face this at work as software engineers...
[1]: https://wislawjournal.com/2010/11/03/regulations-show-courts...
I just googled "bad regulations" and this was the first result:
http://www.businessinsider.com/ridiculous-regulations-big-go...
Not saying I agree with all of the points in that article, but these strike me as a few harmful regulations:
> A U.S. District Court judge slapped a $500 fine on Massachusetts fisherman Robert J. Eldridge for untangling a giant whale from his nets and setting it free. So what was his crime? Well, according to the court, Eldridge was supposed to call state authorities and wait for them do it.
> The state of Texas now requires every new computer repair technician to obtain a private investigator's license. In order to receive a private investigator's license, an individual must either have a degree in criminal justice or must complete a three year apprenticeship with a licensed private investigator. If you are a computer repair technician that violates this law, or if you are a regular citizen that has a computer repaired by someone not in compliance with the law, you can be fined up to $4,000 and you can be put in jail for a year.
> The city of Philadelphia now requires all bloggers to purchase a $300 business privilege license. The city even went after one poor woman who had earned only $11 from her blog over the past two years.
http://www.businessinsider.com/ridiculous-regulations-big-go...
Not saying I agree with all of the points in that article, but these strike me as a few harmful regulations:
> A U.S. District Court judge slapped a $500 fine on Massachusetts fisherman Robert J. Eldridge for untangling a giant whale from his nets and setting it free. So what was his crime? Well, according to the court, Eldridge was supposed to call state authorities and wait for them do it.
> The state of Texas now requires every new computer repair technician to obtain a private investigator's license. In order to receive a private investigator's license, an individual must either have a degree in criminal justice or must complete a three year apprenticeship with a licensed private investigator. If you are a computer repair technician that violates this law, or if you are a regular citizen that has a computer repaired by someone not in compliance with the law, you can be fined up to $4,000 and you can be put in jail for a year.
> The city of Philadelphia now requires all bloggers to purchase a $300 business privilege license. The city even went after one poor woman who had earned only $11 from her blog over the past two years.
It's always worth digging into the source material:
1) http://www.capecodtimes.com/article/20091001/NEWS/910010317
> illegally untangling a humpback whale caught in his fishing gear.
> ... violating the federal Endangered Species Act and the Marine Mammal Protection Act.
Humpback whales were considered endangered species as the time. Certainly doesn't seem crazy to give extra care when handling endangered species
2) https://www.dps.texas.gov/RSD/PSB/Laws/psb_opin_sum.htm
> Computer repair or support services should be aware that if they offer to perform investigative services, such as assisting a customer with solving a computer-related crime, they must be licensed as investigators.
Sounds like the requirement applies to those who offer services that would be considered private investigation.
3) https://www.wired.com/2010/08/five-myths-about-philadelphias... provides a decent contemporaneous rebuttal.
1) http://www.capecodtimes.com/article/20091001/NEWS/910010317
> illegally untangling a humpback whale caught in his fishing gear.
> ... violating the federal Endangered Species Act and the Marine Mammal Protection Act.
Humpback whales were considered endangered species as the time. Certainly doesn't seem crazy to give extra care when handling endangered species
2) https://www.dps.texas.gov/RSD/PSB/Laws/psb_opin_sum.htm
> Computer repair or support services should be aware that if they offer to perform investigative services, such as assisting a customer with solving a computer-related crime, they must be licensed as investigators.
Sounds like the requirement applies to those who offer services that would be considered private investigation.
3) https://www.wired.com/2010/08/five-myths-about-philadelphias... provides a decent contemporaneous rebuttal.
Those may be illegitimate, but licensure for hair cutting is absurd and damaging. Many states require it, and it is a clear-as-day example of regulatory capture and rent-seeking.
A person can be permanently disfigured or disabled through improper hair treatments. Infectious disease can be spread through improperly cleaned, or uncleaned, scissors and razors. There was a time when people would die from infections they got at the barber.
Barbers and hairstylists are tested on proper hairstyling and sanitation technique.
This is one space where regulation to ensure people follow proper technique and sanitation protocols is needed.
Barbers and hairstylists are tested on proper hairstyling and sanitation technique.
This is one space where regulation to ensure people follow proper technique and sanitation protocols is needed.
[deleted]
> Eldridge
What actually happened is that he put nets near the whales, and then left one of them entangled in the cut off nets (so, probably killed this member of an endangered species due to his recklessness).
http://www.capecodtimes.com/article/20091001/NEWS/910010317
> Texas
Again, the regulation here is that IF YOU ARE INVESTIGATING COMPUTERS, you need a PI license. If you're swapping video cards or reflowing solder or whatever, you don't.
> Philadelphia
There isn't any blogging tax. https://www.wired.com/2010/08/five-myths-about-philadelphias...
I've found that libertarian blogs which have these stories about oppressive regulation are invariably - 100% - lying. I've never found a true story about oppressive regulation. The reality is, no one is sitting around rubbing their hands together and thinking about all the ways to oppress the public for no reason.
What actually happened is that he put nets near the whales, and then left one of them entangled in the cut off nets (so, probably killed this member of an endangered species due to his recklessness).
http://www.capecodtimes.com/article/20091001/NEWS/910010317
> Texas
Again, the regulation here is that IF YOU ARE INVESTIGATING COMPUTERS, you need a PI license. If you're swapping video cards or reflowing solder or whatever, you don't.
> Philadelphia
There isn't any blogging tax. https://www.wired.com/2010/08/five-myths-about-philadelphias...
I've found that libertarian blogs which have these stories about oppressive regulation are invariably - 100% - lying. I've never found a true story about oppressive regulation. The reality is, no one is sitting around rubbing their hands together and thinking about all the ways to oppress the public for no reason.
Similar situation happens with the examples of "ridiculous" regulations in the EU. I've checked a few of them out in the past, and each time they turned out to be some bullshit spun by UK's tabloids that later got republished as factual by the news portals on the continent.
While we’re opining on bad regs, my pet peeve for this week is Massachusetts law that requires any plumbing fixture installed in the state (that includes faucets, sinks, tubs, and toilets) be explicitly approved by the MA Board despite nationally accredited testing which would already have been performed.
Of course manufacturers need to apply for each product SKU individually and needs to resubmit every 3 years, and pay a fee of $150.00 per every 10 SKUs with a maximum of $1,500.00 with their application.
In response MA will cash their check and add a line item into a database (which they paid probably untold millions to build) and do absolutely no testing or certification of their own.
The typical solution is to simply stipulate that products must have gone through nationally accredited testing for XYZ and that the licensed plumber simply attests they have verified this is true for any fixtures they installed by checking a box on the permit form.
But you know, 100,000 product SKUs at $1.50 per SKU every 3 years is a pretty sweet money grab.
So much for ordering a $30 cold water fill from Amazon, I can pay Delta $100 for the same thing. Or, you know, install the Amazon version myself after the inspection is done.
Ditto for regs which technically make it illegal to install a light switch or new outlet with USB charging ports on in. Because, you know, screwing in 3 wires.
Ditto for regs on make-up air for over-range ventilation which doesn’t account for the actual tightness of the building envelope and type of vented gas fixtures which could conceivably backdraft. Wouldn’t want to make it too complex, let’s just cut big fucking baffled holes in the building envelope to “make-up” for every CFM over 400. I guess I can just disconnect the pressure switch after the inspector leaves.
Building codes are often quite sensible and important. But some states or even towns in particular turn it into a money grab.
Sigh, first world problems.
Of course manufacturers need to apply for each product SKU individually and needs to resubmit every 3 years, and pay a fee of $150.00 per every 10 SKUs with a maximum of $1,500.00 with their application.
In response MA will cash their check and add a line item into a database (which they paid probably untold millions to build) and do absolutely no testing or certification of their own.
The typical solution is to simply stipulate that products must have gone through nationally accredited testing for XYZ and that the licensed plumber simply attests they have verified this is true for any fixtures they installed by checking a box on the permit form.
But you know, 100,000 product SKUs at $1.50 per SKU every 3 years is a pretty sweet money grab.
So much for ordering a $30 cold water fill from Amazon, I can pay Delta $100 for the same thing. Or, you know, install the Amazon version myself after the inspection is done.
Ditto for regs which technically make it illegal to install a light switch or new outlet with USB charging ports on in. Because, you know, screwing in 3 wires.
Ditto for regs on make-up air for over-range ventilation which doesn’t account for the actual tightness of the building envelope and type of vented gas fixtures which could conceivably backdraft. Wouldn’t want to make it too complex, let’s just cut big fucking baffled holes in the building envelope to “make-up” for every CFM over 400. I guess I can just disconnect the pressure switch after the inspector leaves.
Building codes are often quite sensible and important. But some states or even towns in particular turn it into a money grab.
Sigh, first world problems.
Honestly, I kind of like that second one. Even if computer repair techs shouldn't need licensing/training per se, I'd be happy to see them having to obey the strictures of some sort of Private Investigator's Guild, and be made to be unable to get a job in computer repair if they commit investigative malfeasance according to said guild. (Like, say, if they take someone's data and use it to blackmail them!)
Blackmail is already a crime, why would we need an extra rent-seeking organization to ban it?
Putting someone in jail for a crime stops them from committing the same crime for exactly the length of time they spend in jail.
Barring someone from working in a given industry, meanwhile, stops them from ever having the opportunity to commit the same crime again.
If a lawyer goes to jail for fraud, you don't want them to still be a lawyer when they get out, do you? This isn't like regular crimes (e.g. crimes of passion); fraud, blackmail, etc. are extremely deliberate and intellectual acts, and the type of person who decides to do them doesn't tend to suddenly happen upon any more scruples later on in life.
Of course, you could just say that we can make it part of the legal punishment of the criminal that they can never work in a given industry again (like we do for e.g. hackers). But is the government setting the terms of what is or isn't "work in that industry" better than actual industry-members setting those terms? Right now, people convicted of "hacking" aren't even allowed to own computers, for the most part. Doesn't seem like the government really knows what it's doing there.
Plus, allowing industries to self-regulate using guild licensing allows for enforcement of things besides strict legal criminal penalties. For example, the Society of Engineers can kick you out if you intentionally sign off on something as safe when you know it's not. That's not illegal—you'll go to jail if the building/bridge/etc. falls down; but if it doesn't, you're "safe" from criminal prosecution. But if the Society of Engineers finds out, then you're not a capital-E Engineer any more, and now all your signed-off-on documents will have to be rechecked.
Barring someone from working in a given industry, meanwhile, stops them from ever having the opportunity to commit the same crime again.
If a lawyer goes to jail for fraud, you don't want them to still be a lawyer when they get out, do you? This isn't like regular crimes (e.g. crimes of passion); fraud, blackmail, etc. are extremely deliberate and intellectual acts, and the type of person who decides to do them doesn't tend to suddenly happen upon any more scruples later on in life.
Of course, you could just say that we can make it part of the legal punishment of the criminal that they can never work in a given industry again (like we do for e.g. hackers). But is the government setting the terms of what is or isn't "work in that industry" better than actual industry-members setting those terms? Right now, people convicted of "hacking" aren't even allowed to own computers, for the most part. Doesn't seem like the government really knows what it's doing there.
Plus, allowing industries to self-regulate using guild licensing allows for enforcement of things besides strict legal criminal penalties. For example, the Society of Engineers can kick you out if you intentionally sign off on something as safe when you know it's not. That's not illegal—you'll go to jail if the building/bridge/etc. falls down; but if it doesn't, you're "safe" from criminal prosecution. But if the Society of Engineers finds out, then you're not a capital-E Engineer any more, and now all your signed-off-on documents will have to be rechecked.
1. It’s hard to imagine a lawyer going to jail.
2. Why wouldn’t I want them to still be a lawyer? I do not believe that everyone who commits a crime (and is caught, and convicted) is morally corrupt for the rest of her life.
2. Why wouldn’t I want them to still be a lawyer? I do not believe that everyone who commits a crime (and is caught, and convicted) is morally corrupt for the rest of her life.
Do you think police officers fired for misconduct should be hired in another precinct?
This is a very good question.
My issue with police misconduct is that it is institutionalized and practically protected and normalized.
Is this the case with malpractice?
I’d think that the army-like bonding of police officers is a part of the reason for letting a lot of issues slide. Is there a similar phenomenon with lawyers?
My issue with police misconduct is that it is institutionalized and practically protected and normalized.
Is this the case with malpractice?
I’d think that the army-like bonding of police officers is a part of the reason for letting a lot of issues slide. Is there a similar phenomenon with lawyers?
Occupational licencing has grown into one of my pet peeves. I at this point cannot come up with a single example that would've get regulated by the market itself. For example nobody would go to a "surgeon" who never received actual training, no hospital would employ them and no insurance cover them. At this point I believe it's mainly a vehicle for incumbents to keep competitors out.
Great discussion as always on econtalk: http://www.econtalk.org/archives/2018/01/dick_carpenter.html
Great discussion as always on econtalk: http://www.econtalk.org/archives/2018/01/dick_carpenter.html
That is incredibly naive. How would someone know with any certainty that the "surgeon" had any actual training if not for the regulation of the industry. Would there even be insurance? Your argument is based on a system that has benefited greatly from regulation. Without the regulation the system would fall apart.
Turns out the doctor has a university degree. Also turns out that you already can practice as a surgeon if you have any medical license. Your kids pediatrician is allowed to perform heart surgery. Yet none of that happens.
That regulation sounded outlandish, so I read the article. The article is obviously anti-regulation, but even in context it's obvious that a) this is possible not a license to close a business but instead b) is quite possibly a regulation intended to prevent stores from having fake "GOING OUT OF BUSINESS" sales every couple of quarters, misleading consumers into making suboptimal decisions.
Based solely on what's in the article, it wouldn't apply to businesses that don't carry inventory, notably services businesses.
Based solely on what's in the article, it wouldn't apply to businesses that don't carry inventory, notably services businesses.
Hehe, I haven't looked, so it may be apocryphal, but I believe there is a WAC (Washington (state) Administrative Code), that mandates that a business (possibly limited to furniture stores) may only have a "Going Out Of Business" sale once per calendar year.
Closest ordinance i could find from a cursory search: https://library.municode.com/wi/wauwatosa/codes/code_of_ordi...
> Every person shall obtain a closing-out license before conducting a closing-out sale
> Every person shall obtain a closing-out license before conducting a closing-out sale
Here is the full text: http://city.milwaukee.gov/ImageLibrary/Groups/ccClerk/Ordina...
Well, it is a regulation to ensure the business is intended to close. Instead of "going out of business" sign, what happen "big sale" sign every quarters? FWIW, I am not sure if that big sale is really a big sale with discounts. In fact, I have seen mattress stores claiming a price drop on the flyer for $850 but the regular price never stays - basically I am calling out certain stores lying about the regular price and promotional price.
[deleted]
I agree with you. I think it's also worth reviewing regulations periodically to see if they still make sense.
For example, a few years ago when Uber moved into Sarasota, the taxi companies complained. The city did something remarkable - they eliminated the regulations that Uber wasn't complying with. AFAIK, there really haven't been any negative consequences.
For example, a few years ago when Uber moved into Sarasota, the taxi companies complained. The city did something remarkable - they eliminated the regulations that Uber wasn't complying with. AFAIK, there really haven't been any negative consequences.
You mean other than the externalities of running the business that Uber places on its drivers through them being contractors, using their own cars (no benefits, drivers pay for wear & tear and gas).
I don't believe the regulations that were repealed addressed any of that.
> AFAIK, there really haven't been any negative consequences.
None at all? Not a single one? Did Uber pinky swear this?
None at all? Not a single one? Did Uber pinky swear this?
Being enacted doesn't mean it was ever relevant.
What?! Don't you just blindly trust bureaucrats and politicians?! Say it ain't so dexterdog!
More seriously, there are loads of bad regulations that were never good to begin with. Of course there would be. Motivations vary from do-gooding to incompetence to corruption, and if you believe this is impossible then I've got a bridge to sell you. And there are loads of bad regulations that are bad just because they are no longer necessary or relevant. Of course there would be.
More seriously, there are loads of bad regulations that were never good to begin with. Of course there would be. Motivations vary from do-gooding to incompetence to corruption, and if you believe this is impossible then I've got a bridge to sell you. And there are loads of bad regulations that are bad just because they are no longer necessary or relevant. Of course there would be.
So many problems are caused by the paradox of the human predator. Tools to protect against the human predator are always eventually used as a tool OF the human predator.
Day 1: you create a regulation to stop some company from forcing employees to put their hands in a running wood chipper. Hurray, one predatory person has been stopped.
Day 2: A predator by hook and crook lobbies for a regulation to give them a competitive advantage.
Day 50: We've got 50 sincerely conceived regulations and 50 predatory regulations. Regulatory work has accelerated as the state has gotten better at it. Quite a few of the sincerely created regulations are meant to mitigate problems caused by the predatory ones! A call is sounded for deregulation.
Day 51: 35 regulations are thrown out based on lobbyist pressure and "grass root" campaigns.
Day 52: A company sends out a memo: "Due to the extra maintenance costs of hard stopping our wood chipper, we ask you now always leave it running. If it stalls on something the policy remains unchanged otherwise: pull it out."
It's an eternal arms race and I think the predators win almost always. We can't recognize or disarm them as faster than they can use our own methods and tools against us. As far as I can tell, oppose consolidation of power and work to never surrender leverage over yourself.
Day 1: you create a regulation to stop some company from forcing employees to put their hands in a running wood chipper. Hurray, one predatory person has been stopped.
Day 2: A predator by hook and crook lobbies for a regulation to give them a competitive advantage.
Day 50: We've got 50 sincerely conceived regulations and 50 predatory regulations. Regulatory work has accelerated as the state has gotten better at it. Quite a few of the sincerely created regulations are meant to mitigate problems caused by the predatory ones! A call is sounded for deregulation.
Day 51: 35 regulations are thrown out based on lobbyist pressure and "grass root" campaigns.
Day 52: A company sends out a memo: "Due to the extra maintenance costs of hard stopping our wood chipper, we ask you now always leave it running. If it stalls on something the policy remains unchanged otherwise: pull it out."
It's an eternal arms race and I think the predators win almost always. We can't recognize or disarm them as faster than they can use our own methods and tools against us. As far as I can tell, oppose consolidation of power and work to never surrender leverage over yourself.
You continue to assume that the regulators only ever write good regulations (good for the time when they produce them).
I disagree. Read day 2.
Are you a lobbyist? You realize regulations are created all the time because a company pushed for it to benefit the most, right? Some are good. Some are bad. Like everything in this world.
> Every regulation was enacted with specific circumstances in mind.
It's better said, that every regulation was enacted with good intentions... whether or not the result is good or bad is something entirely different.
It's better said, that every regulation was enacted with good intentions... whether or not the result is good or bad is something entirely different.
I'm the incumbent business in some area, I lobby for regulations that I can afford to pay, but makes it too expensive for potential competitors to get into the business.
http://braidingfreedom.com/braiding-initiative/standing-up-f...
https://en.wikipedia.org/wiki/Regulatory_capture
http://braidingfreedom.com/braiding-initiative/standing-up-f...
https://en.wikipedia.org/wiki/Regulatory_capture
I doubt you vocalize your goal of driving competitors out of business when lobbying for some new regulation.
You don't personally enact regulations... those who do are the ones with the good intentions. To them, the regulations seem sensible and net-good... no matter how misguided it might happen to be.
You don't personally enact regulations... those who do are the ones with the good intentions. To them, the regulations seem sensible and net-good... no matter how misguided it might happen to be.
So has every enacted crime.
I can also imagine that the same regulations enacted under a different administration, region, historical or technological context can have different consequences.
It's natural to imagine that for such large systems, it's controlled by a little more than a few simple variable. But unfortunately, the levers and knobs that the population sees is something along the lines of low / high government and taxes.
It's natural to imagine that for such large systems, it's controlled by a little more than a few simple variable. But unfortunately, the levers and knobs that the population sees is something along the lines of low / high government and taxes.
Good term for this: https://en.wikipedia.org/wiki/Wikipedia:Chesterton%27s_fence
> The next time some politician tells you regulations are always bad
I hear this line more, now, from people selling Bitcoin.
I hear this line more, now, from people selling Bitcoin.
The next time some politician tells you regulations are always bad
Regulations timed to not start until after the Executive leaves office shouldn't be allowed in the first place.
The thing is that you can't just enact regulations that take place immediately. You can't just have the government stop doing its job because they are going to be leaving soon and if the next president wants to stop the regulations they can
you can't just enact regulations that take place immediately
What has been the cost of this regulation as a whole on the entire banking industry?
Lets get that number and compare.
Lets get that number and compare.
The cost to who? The banks who have to follow them? Or to consumers of the services they impact?
It's not a fair comparison. The purpose of regulation in this case is to protect consumers of bank services - including other banks. Those costs are only calculable if you know the full scope of the bad behavior, which, without appropriate regulation ensuring reporting and review, you can't.
Of course, if you don't believe banks ought to be regulated in order to protect their customers, it doesn't matter. But that's a different conversation.
It's not a fair comparison. The purpose of regulation in this case is to protect consumers of bank services - including other banks. Those costs are only calculable if you know the full scope of the bad behavior, which, without appropriate regulation ensuring reporting and review, you can't.
Of course, if you don't believe banks ought to be regulated in order to protect their customers, it doesn't matter. But that's a different conversation.
If you cant know, then you can never make the claim that the regulation is good, which is what OP said.
That isn't what I said. I said you can know. But only if you provide some amount of regulation to mandate reporting of reliable information.
The claim is actually the opposite: You can never make the claim that no regulation is good, because you don't know what you don't know.
(But you absolutely can still make that claim, in fairness; you just can't base it on a cost-benefit analysis from the customer's perspective.)
The claim is actually the opposite: You can never make the claim that no regulation is good, because you don't know what you don't know.
(But you absolutely can still make that claim, in fairness; you just can't base it on a cost-benefit analysis from the customer's perspective.)
The burden of proof is on the creation of regulation, because it requires active effort to implement and maintain.
The OP said that this shows why regulation gets good results, and I challenge the evaluation by saying we have seen the benefit of this particular regulation, but not the cost.
You argue that is hard to know both the cost and the benefit of regulations. I argue that if you cant gauge it, then you can never conclude if its good or bad.
I rather put the responsibility of proving itself to the guys with the battons.
The OP said that this shows why regulation gets good results, and I challenge the evaluation by saying we have seen the benefit of this particular regulation, but not the cost.
You argue that is hard to know both the cost and the benefit of regulations. I argue that if you cant gauge it, then you can never conclude if its good or bad.
I rather put the responsibility of proving itself to the guys with the battons.
> You argue that is hard to know both the cost and the benefit of regulations. I argue that if you cant gauge it, then you can never conclude if its good or bad.
Here's where the trick is. I'm not saying "you can't gauge it"; you even acknowledged in the previous sentence that that's not what I'm saying. I'm saying it's complex, because in order to gauge it, you must have some of it, otherwise there is no way to produce reliable metrics.
Yes, that requires incurring some cost. But the risk of much higher costs comes down dramatically once the initial cost is paid, because the information it provides makes us able to avoid greater costs down the road.
What you're saying is that if we can't build a tower all in one go, we can't build it at all. I'm saying we can do it in reasonable stages, but we have to lay a strong foundation first.
Here's where the trick is. I'm not saying "you can't gauge it"; you even acknowledged in the previous sentence that that's not what I'm saying. I'm saying it's complex, because in order to gauge it, you must have some of it, otherwise there is no way to produce reliable metrics.
Yes, that requires incurring some cost. But the risk of much higher costs comes down dramatically once the initial cost is paid, because the information it provides makes us able to avoid greater costs down the road.
What you're saying is that if we can't build a tower all in one go, we can't build it at all. I'm saying we can do it in reasonable stages, but we have to lay a strong foundation first.
Okay. What was the cost of this already implemented regulation?
Wrong. This error was caught, and otherwise likely would not have been. That's good.
I know that on HN it often can not be left unsaid that the financial industry has a net benefit on the economy and on society, but I don't think it can be easily assumed that the cost of complying with such regulation makes the banking system less efficient, even if the cost of compliance is many times the fines that end up being paid out.
Banks ultimately compete with each other, and there is inevitably an information asymmetry between banks and their clients. A good faith bank will lose out to banks that "accidentally" employ dark patterns against their customers, if the customers are unaware that they are being cheated, or if the costs of remedies are more expensive than the damages.
People often talk about the value of assuming positive intent on Hacker News. I agree with this in principle, but I also think it is important to create an environment where people acting in good faith are rewarded with not having to waste their time thinking up schemes to compete with dishonest competitors. The bias toward assuming incompetence and honest mistakes over ill intent unfortunately gives cover to people who employ plausible deniability to cover intentional fraud. Cell phone companies, cable companies and utilities make billing errors far too often to plausibly credit honest mistakes alone. At least in their case they don't already have direct access to your assets in the way that banks do.
Banks ultimately compete with each other, and there is inevitably an information asymmetry between banks and their clients. A good faith bank will lose out to banks that "accidentally" employ dark patterns against their customers, if the customers are unaware that they are being cheated, or if the costs of remedies are more expensive than the damages.
People often talk about the value of assuming positive intent on Hacker News. I agree with this in principle, but I also think it is important to create an environment where people acting in good faith are rewarded with not having to waste their time thinking up schemes to compete with dishonest competitors. The bias toward assuming incompetence and honest mistakes over ill intent unfortunately gives cover to people who employ plausible deniability to cover intentional fraud. Cell phone companies, cable companies and utilities make billing errors far too often to plausibly credit honest mistakes alone. At least in their case they don't already have direct access to your assets in the way that banks do.
Regulation tends to enforce responsible behavior, which is actually a long term benefit to an organization.
In other words, it tends to put a brake on the most egregious of the self-serving greed that turns into scandals and damages that destroy businesses. When it is effectively written and enforced.
People talk about costs -- often like every cost is bad.
Having worked in accounting for a while, I can say that it was sometimes an uphill battle to get people to do things right. Having rules -- internal and external -- helped in that regard.
A resulting benefit? Management actually knew the real state of the books, and could operate accordingly on that basis.
And, those precious banks were less likely to get ripped off by mis-representations.
Regulation's not bad. Crap regulation -- laws and rules and enforcement -- is.
In other words, it tends to put a brake on the most egregious of the self-serving greed that turns into scandals and damages that destroy businesses. When it is effectively written and enforced.
People talk about costs -- often like every cost is bad.
Having worked in accounting for a while, I can say that it was sometimes an uphill battle to get people to do things right. Having rules -- internal and external -- helped in that regard.
A resulting benefit? Management actually knew the real state of the books, and could operate accordingly on that basis.
And, those precious banks were less likely to get ripped off by mis-representations.
Regulation's not bad. Crap regulation -- laws and rules and enforcement -- is.
wait, so suppose regulation costs financial firms too much, you'd rather have no recourse to getting reimbursed as an individual?
I'm guessing the argument is that if the cost that the customer bears for such regulated audits is greater than the refund they get from it then the customer actually lost money.
That sounds kind of like me complaining about the cost of my car insurance because for 10 years I didn't have any accidents.
Seems difficult to know the benefit of such regulation without hindsight.
Secondly, businesses face market pressures to provide low cost to customers (isn't that the whole argument for the free market?) therefore passing the cost to the customer should be weighed against other potential inefficiencies -- they might even have to take a smaller cut of profit!
Funny how so many people can never justify the cost of doing business when it comes to protecting consumers.
Seems difficult to know the benefit of such regulation without hindsight.
Secondly, businesses face market pressures to provide low cost to customers (isn't that the whole argument for the free market?) therefore passing the cost to the customer should be weighed against other potential inefficiencies -- they might even have to take a smaller cut of profit!
Funny how so many people can never justify the cost of doing business when it comes to protecting consumers.
Whats your recourse to getting reimbursed for a regulation that is too expensive?
Superior to getting reimbursed when there is no regulation whatsoever.
See: Equifax data breach costs shouldered by the American public who have no resource provided by regulation
See: Equifax data breach costs shouldered by the American public who have no resource provided by regulation
Superior? Which recognized bad regulations did you get your money back from?
That's the point. Regulation > No regulation. We're just arguing the amount of said regulation.
I don't think you are reading my comments.
You say that without regulation you wouldn't have a recourse to get your money back on bad behavior from private companies, but if a regulation harms you economically, you will never get your money back anyway. Regulation does not give you a recourse to get your money back. In fact, even worse. The state can never make amends on its mistakes.
You say that without regulation you wouldn't have a recourse to get your money back on bad behavior from private companies, but if a regulation harms you economically, you will never get your money back anyway. Regulation does not give you a recourse to get your money back. In fact, even worse. The state can never make amends on its mistakes.
Let me twist an analogy.
I don't care if law enforcement is more expensive than just absorbing the cost of crimes. I want the rule of law enforced, even if it's more expensive.
I don't care if law enforcement is more expensive than just absorbing the cost of crimes. I want the rule of law enforced, even if it's more expensive.
Thats fine. You go your way and let other people go their way and everyone gets what they want.
That's not at all true and you know it.
I can only answer what is said to me. He said he cared more about the law than the economic results, and I provide a solution for his desires and for the people that don't share them.
I, maybe like you, suspect that he wants others to follow the laws he wants, which is an entirely different proposition.
I, maybe like you, suspect that he wants others to follow the laws he wants, which is an entirely different proposition.
This is the exact attitude that has resulted in the war on drugs.
Political apathy and racially motivated legislation resulted in the war on drugs.
Don’t want the law enforced? Change the law.
Don’t want the law enforced? Change the law.
> Don’t want the law enforced? Change the law.
Yes, the law should be changed, but not because drugs aren't bad. But because the high costs of enforcement (direct and indirect) have been worse than the lower costs of people being free to get high.
By your logic, we should continue to ignore all those costs because drugs are still a negative to society and the moral law must be enforced no matter the enforcement cost.
Yes, the law should be changed, but not because drugs aren't bad. But because the high costs of enforcement (direct and indirect) have been worse than the lower costs of people being free to get high.
By your logic, we should continue to ignore all those costs because drugs are still a negative to society and the moral law must be enforced no matter the enforcement cost.
[deleted]
This can lead to a fundamentally misconstructed comparison. Cost savings recovered can be estimated but you can't really estimate what customer costs it headed off. If it cost $1M of compliance, but successfully caused banks to avoid behavior that would have cost $100M to customers, that would be great. But, you only get visibility on recovery from violations. So you have at least a three term cost balance, for which only two terms are even visible.
Apples and Oranges. This eats on their profits not on your pocket. Also remember, if we let them get away with it, it'll get worse. Like really much worse.
Really, the regulators salary is paid by the bank's profits and not taxes? And the decreased supply due to regulation is also paid by the banks, not by the consumers?
I would've liked it more if the refund was accompanied by a fine of 3X the amount.
Do they ever mistake to give people free money (at such scale?) I bet the stealing happens a lot more often.
Do they ever mistake to give people free money (at such scale?) I bet the stealing happens a lot more often.
Banks absolutely make mistakes in the favor of the client all the time.
In general, banks want to get it right. If they want to make more money, they can always change the terms. Not saying that all banks are snow white lilies, but they generally want to have everything accurate to the rules. The way they win is by helping to write the rules.
In general, banks want to get it right. If they want to make more money, they can always change the terms. Not saying that all banks are snow white lilies, but they generally want to have everything accurate to the rules. The way they win is by helping to write the rules.
The little town banks maybe. Frankly, the national one I think try to get away with as much as they can. And their bonus system is probably to blame: "by the time this is discovered, I'll be gone with my bonus."
>The next time some politician tells you regulations are always bad, only lead to more expenses for customers, remember this.
The inverse opinion that regulation is always good is equally terrible.
The inverse opinion that regulation is always good is equally terrible.
The other side might argue that the $330MM ultimately came from customers. If Citi didn't have to do such audits and no one complained, why should Citi be forced to "wealth re-distribute" these funds from one set of customers to another set?
Ah yes, the well-known "if they don't notice you took it, it's not a crime" loophole.
And no, the money wouldn't come from customers, why would it? Citi is a for-profit entity, this came out of their profits.
And no, the money wouldn't come from customers, why would it? Citi is a for-profit entity, this came out of their profits.
Profits come from customers.
Presumably a bunch of that money ultimately came from the very same customers who are receiving this payout. The fact that it’s called a “refund” might help tip the other side off on this.
> why should Citi be forced to "wealth re-distribute" these funds from one set of customers to another set?
Nothing leads me to believe that the second set is different from the first. In fact, the word “refund” suggests they’re the same.
Nothing leads me to believe that the second set is different from the first. In fact, the word “refund” suggests they’re the same.
How is this "wealth re-distribution"? Citi wasn't supposed to have that money in the first place.
I find it interesting how this show up the day after I had to call the customer service to clarify an interest fee on my account that din't make sense. So here is what happened, I got hit with a $12.xx monthly interest on a $2000ish purchase which I made less than 30 days ago and hasn't shown up on my previous statement. For clarification, my current APR on the card is 5.99%.
It took me two reps and two accounts managers to learn how these things are calculated:
1) Interests are daily compounded.
2) Interests are not calculated on actual balance but on the average daily balance.
3) If you don't pay your statement balance in full by the end of the month, you lose your grace period for future purchases and interest would start accruing as soon as the transactions goes through. To reset this it would require you to make two full statement payments in a row.
4) If you purchase something and return it and the return takes a few days to process, you would still pay interest on for those days.
The rep and the first account manager that spoke to weirdly dint have the basic understanding of interest rates. She argued that the $12 interest was on the $2000 for 4 days at the rate of 5.99%. Funny enough, she still din't find anything odd when I pointed out that it would mean, by the end of the year, I would pay $1095 ie. > 50% of the principal in interest!
Anyways the second rep was knowledgeable enough to explain it.
It took me two reps and two accounts managers to learn how these things are calculated:
1) Interests are daily compounded.
2) Interests are not calculated on actual balance but on the average daily balance.
3) If you don't pay your statement balance in full by the end of the month, you lose your grace period for future purchases and interest would start accruing as soon as the transactions goes through. To reset this it would require you to make two full statement payments in a row.
4) If you purchase something and return it and the return takes a few days to process, you would still pay interest on for those days.
The rep and the first account manager that spoke to weirdly dint have the basic understanding of interest rates. She argued that the $12 interest was on the $2000 for 4 days at the rate of 5.99%. Funny enough, she still din't find anything odd when I pointed out that it would mean, by the end of the year, I would pay $1095 ie. > 50% of the principal in interest!
Anyways the second rep was knowledgeable enough to explain it.
Is this for a US based credits card? I have never heard of needing pay off for two full months. Or for the average daily balance used in calculation and I'm pretty sure neither is the case for any of my cards. But I will need to check.
I suppose one good thing in this is that Citi caught this error on its own and not as a result of a class action suit. So customers will receive the full value of their overpayment, rather than a puny voucher dictated by a court where a large chunk goes to the lawyers bringing suit.
So say that a customer was overcharged $100 in interest in Jan 2017 and they carried a balance all year. By Dec 2017 they carried an extra $100 on their credit card balance needlessly so they paid >$20 in additional interest (APR 20%) due to this overcharge.
The article only mentions returning the original amount AFAIK so it looks like Citi might still be profiting from this error.
The article only mentions returning the original amount AFAIK so it looks like Citi might still be profiting from this error.
servers right. well said mabbo
>The next time some politician tells you regulations are always bad, only lead to more expenses for customers, remember this.
I always suspected their credit card bills. It was very confusing and very hard to verify. May be they did it intentionally? who knows?
Ladies and gentlemen, this is what regulations are all about. If not for a federal law forcing Citi to audit for this sort of thing they would either never have caught that they stole hundreds of millions of dollars, or more likely just never have reported it to anyone.
The next time some politician tells you regulations are always bad, only lead to more expenses for customers, remember this.