Comment by toomuchtodo | Hacker News Reader

Comment by toomuchtodo | Hacker News Reader

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Legally, yes. In practice, debt collectors (which originators of debt of all sorts will quickly dump unpaid debt onto, even medical providers who don't want to wait for patients to cough up the funds due) will take advantage of unsophisticated/financially illiterate citizens to coerce payment, even if there is no obligation to pay.

The fix is straightforward: require evidence of the debt upfront, and if you're attempting to collect on debt you can't verify was agreed to by the person you're pursuing, damages are substantial (say, $1M per occurance). Make reporting of violations via the CFPB frictionless.

You will see debt originators rapidly standing up robust identity proofing systems (having customers come into a branch with their IDs), and asking Congress to legislate their implementation (Login.gov and similar for private enterprise, with the end game being a usable national ID system such that Estonia has [1]).

Tangentially, current risk management in this space between identity and finance sucks. I worked with someone to get liens off their Lexis Nexis Risk Solutions report (which mortgage originators use for compliance purposes with conventional mortgage underwriting guidelines as it relates to foreclosures and real estate fraud) that were on their report for almost 8 years in error. It took a CFPB complaint for Lexis Nexis to remove them with citations from an attorney to state statute, and this data isn't classified as consumer reporting, so it's almost impossible to obtain financial recourse/damages for these occurrences.

[1] https://privacyinternational.org/case-study/4737/id-systems-...

[1] https://news.ycombinator.com/item?id=29980189 (HN thread of the above link)

> Make reporting of violations via the CFPB frictionless.

Totally agree.. but sending a debt validation letter is already pretty simple. In most cases you can send the scumbag collector a barely-modified form letter and that’s that. I’ve done this twice and it’s pretty painless, but in a perfect world, I wouldn’t be involved at all!

Banks need to be forced to stop considering

    struct {
        name,
        address,
        birthday,
        ss_number,
        other_public_info
    }

…to be equivalent to a person, for the purpose of issuing loans. It’s total madness, and honestly I’m shocked that this kind of fraud isn’t even more common.

That and

    struct { acct_no, routing_no }

…is enough to withdraw money from my bank account thru ACH! Also lunacy. How are banks allowed to be so crappy?

Legislation, plz.

Walk out onto a public street. Ask the first 3 people you come across if they know how to send a debt validation letter. Report back. One should not need to have knowledge with consumer credit laws and regulation to navigate exceptions; it's citizen hostile and a developed economy anti pattern imho. Fail citizen safe.

Agree about ACH. The Fed's FedNow instant payment system due out next year should deprecate all that is trash about the ACH rails (switching to a push from a pull model being one of said deficiencies).

> Walk out onto a public street. Ask the first 3 people you come across if they know how to send a debt validation letter. Report back. One should not need to have knowledge with consumer credit laws and regulation to navigate exceptions; it's citizen hostile and a developed economy anti pattern imho. Fail citizen safe.

By that logic, other things that are antipatterns:

* most laws (do you think "the first 3 people you come across" would know the difference between murder and manslaughter?)

* programming APIs (ie. the trope of programmers having to search up usages for basic library functions)

* most basic life tasks (this can be literally anything. even how to cook. if your parents didn't teach you, and you couldn't search on the internet, most people would be toast).

You're literally making their point. The anti-pattern is assuming people should know something domain specific to avoid harm.

Should the average person need to know the difference between murder and manslaughter to avoid getting scammed into a murder charge?

Should the average programmer have to memorize every API they use to avoid creating the next Heartbleed?

And basic life skills is the literal opposite of your other examples...

>Should the average person need to know the difference between murder and manslaughter to avoid getting scammed into a murder charge?

While I think "legal system that everyone understands" is a laudable goal, there are too many edge cases and "bad" behaviors for that to be possible.

>Should the average programmer have to memorize every API they use to avoid creating the next Heartbleed?

I'm not sure why you modified my original argument. Is having impossible-to-use-from-muscle memory APIs totally fine unless they lead to security vulnerabilities?

>And basic life skills is the literal opposite of your other examples...

in what way? because you assume most people know how to cook? that's because it's knowledge that parents pass down because you need it daily, not because society engineered it to fail safe or whatever.

> While I think "legal system that everyone understands" is a laudable goal, there are too many edge cases and "bad" behaviors for that to be possible.

This is not the issue here. The issue here is whether there is a better way to handle the problem of fraudulent loans facilitated by identity theft.

> Most laws (do you think "the first 3 people you come across" would know the difference between murder and manslaughter?)

Personally, I think the chances are much higher of getting a working definition, and toomuchtodo could probably have said 30 people without looking implausible.

At this point, you might be thinking that few don't know the precise definitions of manslaughter vs. murder, but consider this: most people (I suspect) at least have an understanding of the difference between manslaughter and murder, while not having the slightest idea of what sort of responses are available to them in the fraudulent loan scenario. Furthermore, while both probabilities are low, I doubt that the likelihood that your average person needs to know the difference between manslaughter and murder is close to the likelihood for being in the sort of situation being discussed here.

> Most basic life tasks (this can be literally anything. even how to cook. if your parents didn't teach you, and you couldn't search on the internet, most people would be toast).

It never occurred to me, until now, that the human race is perpetually at risk of extinction in one generation for this reason... but has there been one documented fatality, anywhere, at any time, from this cause?

>I doubt that the likelihood that your average person needs to know the difference between manslaughter and murder is close to the likelihood for being in the sort of situation being discussed here.

Okay, what about if you want to renovate your house? Is the bureaucracy utterly out of control because you can't legally make modifications to your house without getting a permit from the city? Most people know they have to get a permit, and maybe that they need to go to city hall to get it, but good luck getting a permit without asking someone working there or looking it up the internet.

> Most people know they have to get a permit...

Indeed.

That’s moving the goalposts, not knowing it’s possible to do something is quite different than needing to look up how to do something.

I suspect the vast majority of people aren’t going to add a major addition to their house without having someone to do the work who knows about permits, or actually knowing about it themselves. It’s like complaining about how few people know seamanship rules when most people don’t own or operate a boat.

> That’s moving the goalposts, not knowing it’s possible to do something is quite different than needing to look up how to do something.

In this day and age, is there a meaningful difference between those two? If someone got a call from a debt collector for a debt they weren't responsible for, don't you think they'd know to "look up how to do something"?

Yes, many people don’t even read the manual when they can’t get something to work. Expecting everyone to look up how to solve problems they can seemingly ignore is simply not how many people are wired.

By now, your claims have become so weakened that they no longer have any relevance to the original issue, which is whether there is a better way than the current method for handling the problem of loans fraudulently acquired through identity theft.

Yes absolutely, the concept you are missing is "culture" - the majority of knowledge a "citizen" or "consumer" is taught is either picked up through cultural context (parents, TV, books, online articles), or through a common cultural ritual (often school, maybe some game).

You won't even know what to search for if you don't know its something you can do - heck, given certain cultural contexts, you won't even know you can search for "what to do when" X happens.

And that goes back to the earlier point - unless your problem is something low-hanging on WikiHow, commercial/legal construct is such that you probably won't find the answer to your problem, and end up having to "hire an expert", assuming you have the money to do so. So, anti-patterns, yes, absolutely.

>Agree about ACH. The Fed's FedNow instant payment system due out next year should deprecate all that is trash about the ACH rails (switching to a push from a pull model being one of said deficiencies).

Are they actually going to get rid of ACH though? It's all pointless if they still have ACH for legacy reasons. Take our EMV implementation. Not only do we have "chip and signature" if the chip fails to read three times most readers just fall back to mag stripe.

The complaint system isn’t too terrible to use - at least when I last tried it out for a credit reporting dispute. You’ll likely get a reply from the institution in a week or so, and if they don’t reply in a timely manner it’s a red flag:

https://www.consumerfinance.gov/complaint/getting-started/

> if you're attempting to collect on debt you can't verify was agreed to by the person you're pursuing, damages are substantial (say, $1M per occurance)

Congratulations, you just outlawed uncollateralised lending to everyone but the super rich.

The core idea is sound. But link the payout to actual costs and damages.

Propose a penalty that is sufficient to deter unscrupulous behavior but not so excessive as to cause lenders to flee the market entirely. If the penalty can be considered the cost of doing business, it is ineffective for its purpose. This is no different than applying KYC and a customer identification program to lending operations.

> Propose a penalty that is sufficient to deter unscrupulous behavior but not so excessive as to cause lenders to flee the market entirely

Treat it as you suggest: a KYC/AML failure. Public reporting requirements. Liability to the injured (for actual damages). And, if a pattern emerges, license restriction and eventually revocation.

A $1mm mandatory penalty will force lenders to settle. (Nobody will spend $100k proving they properly made a $25k loan with a $1mm penalty if they’re wrong or unconvincing.) When customers know that, you get adverse selection. That would shut down the market.

I concede that this is an excellent start to resolving the overarching issue, and prefer the revocation of licensing for repeat offenders versus potentially unreasonable (depending on size of the org) monetary penalties. Appreciate you pointing out my suboptimal initial proposal to solve the problem. I had the usual suspects on my mind when writing that comment (too big to fail finance who buys their way out of every single attempt at accountability). Thank you.

Uhm, I don't think that outcome is a bad thing at all. There should be very few and ideally no reasons you have to go into debt, except for high-value long-term purchases. And these are typically things that can sever as collateral (think houses, cars). Heck even computers and phones nowadays have significant resell value.

Come to think of it, except for medical bills, I really don't know what an uncollateralized loan would be for and which I'd consider a net-positive. And before you come back to me with medical bills: Fix your health insurance system and that problem goes away...

There are a lot of people in the USA without proper identity documentation, or who live under the identity of someone else.

I know brothers who share a passport and driving license, and do just one lot of taxes between them.

Tightening up identify verification laws will further exclude these people, and may be a net loss for the nation.

What is the realistic solution then? Its time for Americans do the European and developed world thing and use IDs with proper identification methods.

And why would you live under someone else's identity? Isn't it identity theft?

Maybe because you were never given an identity at birth? Or you are in the country illegally? Or you are trying to escape debt or the law or someone wanting you dead? Maybe you lost all your id documents in a fire and don't have anything left for the government to reissue you an ID. Maybe you've just forgotten who you are due to illness.

Plenty of reasons, some more legit than others, but there are a large number of people in this position.

Somehow the rest of the world can deal with these issues. You can skip any contract the society creates with the same reasons from paying taxes to getting a vaccine.

I always get a kick out of how the same people asking why the US can’t do things every other country does, like single payer healthcare or the metric system will have no end of excuses why the US can’t do that other thing ~every other country does: national ID cards that are used for, among other things, verifying one’s identity when voting.

You might want to see what people are actually saying. The problem with ID checks is that there are barriers to entry which are conspicuously not evenly distributed. If you live in a big city, sure, it's easy but there are a lot of people around the country who have real challenges getting to the closest DMV (which can be hours away after closures and poorly connected to transit), coming up with the various paperwork establishing their identity (e.g. think about a newly-widowed 80 year old whose husband's name was on the mortgage, all of the bills, etc.), and non-trivial amounts of money.

I really wish that someone would seriously propose a voting reform act which would basically be the national equivalent of “motor voter registration” except for anyone, at no cost, and either with widespread offices or free transportation (to cover the poor, old, blind, etc.). Get rid of every possible excuse for not having ID and then we can clean up so many screwy processes which rely on a patchwork of paperwork to handle different situations, no two agencies with identical requirements.

> If you live in a big city, sure, it's easy but there are a lot of people around the country who have real challenges getting to the closest DMV (which can be hours away after closures and poorly connected to transit)

That’s fairly deep in “the administration doesn’t want to.” territory. Granted, Germany isn’t as sparsely populated as the US in some regions, but for example we have pop-up admin posts. Effectively a bus that comes visit every few weeks, clerks pop up an admin office where you can do all the tasks, including getting an ID card. That’s not unfeasible, even in comparatively sparsely populated regions.

> That’s fairly deep in “the administration doesn’t want to.” territory

No, it's describing real things which have happened in the U.S. — for example, in 2015 the state of Alabama closed a number of DMV offices in predominantly black counties. They reversed that in 2017 after outcry and some investigations, but it's not like that's a one-time concern which will never go away. Here's a story from last year with similar concerns (note that this doesn't need to be intended maliciously to have an uneven impact):

https://www.pewtrusts.org/en/research-and-analysis/blogs/sta...

That's why I'd like to avoid the issue entirely by having strong legal protections and guaranteed funding. The kind of pop-up you mentioned would be a great solution in rural cases, as would other possibilities like some kind of shared infrastructure with the post office or other government agencies where you could have a trusted third-party take an official picture and seal all of the provided material, etc. The idea would be to pair a voter ID requirement with a guarantee that ID would be free and easily available to categorically remove this class of concern.

I think you’re misreading my post. I’m not saying that this isn’t happening, often with nefarious reasons. I’m saying that this is a man made decision and it can be changed by another man made decision. It’s not a natural law, but people often treat it as auch.

A national ID could be issued not through the DMV (Department of Motor Vehicles) or other similar bureaucracies in whichever state you live in, but through the Post office. Every citizen has access to a nearby Post Office, and many times more frequently than a DMV.

Strengthening identification is a non-starter until the US has something similar to the GDPR, and the surveillance industry has been massively reigned in. Right now it's a feature that the average person balks when asked for personal identifiers like social security number, otherwise things like grocery store discount cards would insist on positive identification. If we had a universal smartcard for ID, imagine having to swipe it for every single fucking transaction.

Apropos of nothing, but I really wish grocery store discount cards were illegal, even though taking a usually anti-government / authority stance I find it really hard to justify as a law. It's completely ridiculous how every major grocery chain cranks their prices up 20-30% unless you opt into their surveillance.

I totally agree on the annoyance and also where you're coming from. Although I'd probably focus more on requiring sale and other product prices to be published online in a semantic format. Ultimately this sale game is an attempt to frustrate the market and create inefficiency.

The wider surveillance issue should be addressed with a GDPR equivalent. What bona fide use do they have for knowing my identity and analyzing my individual purchases? None!

FWIW you can usually get the sale prices by asking the cashier to swipe the "store card" or periodically getting a new nym.

> European and developed world thing and use IDs with proper identification methods

You obviously have no idea what you are talking about. Perhaps "Europe" to you only refers to some rich Scandinavian countries?

In Eastern Europe ID cards are frequently issued solely on the basis of witness statements, fraud is very common.

There are probably hundreds of thousands of "fraudulently" issued European passports in circulation. If you go walk near embassies in Chisinau, you'll be approached a plenty of people offering to help you procure one.

Even the UK has struggled with this https://www.bbc.com/news/uk-58876645

>And why would you live under someone else's identity? Isn't it identity theft?

Because you don't have your own, there are a plenty of Europeans who have never even had a birth certificate (or lost theirs).

Because yours comes with the wrong nationality, a semipermanent black mark that prevents you from seeking normal employment.

I live in the poor Eastern Europe and its most certainly not true. Where do you live in the east that you're so confident making this outrageous claim?

It's not an outrageous claim. The huge scale of passport fraud in Romania and Hungary is widely known, literally to the point where half the rich Russians living in central London hold fraudulently acquired Romanian passports.

Of course it's not only Eastern Europe, of course Greece and Italy have struggled with this too.

Rich Russians get their passports by investing in countries, you might dislike the way its possible to acquire passport but it's drop of the ocean. Your claim like its s massive problem on the grand scale of things in Europe is propaganda.

> Rich Russians get their passports by investing in countries

You have no idea what you are talking about. I am not talking about Cyprus here.

Here's an article describing a small slice of it https://www.vice.com/en/article/akwe34/romania-has-allegedly...

> you might dislike the way its possible to acquire passport

I don't, I firmly believe that this is a good thing.

>Your claim like its s massive problem on the grand scale of things in Europe is propaganda.

I don't claim that it is a problem at all. I'm just saying that you were being ridiculous when you said

> Its time for Americans do the European and developed world thing and use IDs with proper identification methods

Europe is far from having this figured out.

I don't think Moldova is representative of Eastern Europe. Hundreds of thousands of illegals among a population of 400 million doesn't sound like such a huge problem.

The Moldovans are getting EU passports, usually Romanian or Hungarian. They certainly aren't looking for Moldovan passports.

I don't think this is a problem at all, the whole concept of borders and citizenships is poisonous.

Legislation to broaden access for the unbanked and legal docs for non-citizens is the way to solve that use case, not enabling illegal credential sharing to obtain money as a use case (in my opinion)

How is excluding tax frauds a "net loss for the nation"?

If you want to say that ID documents should be something that's much less painful for individuals to acquire (and should be free!), completely agreed.

But the idea that a modern society can function without a safe identification system is somewhat far fetched to me.

> How is excluding tax frauds a "net loss for the nation"?

Calling this tax fraud is... I guess true, but kind of odd and silly.

Two people making $X/2 will in almost all cases pay more taxes while receiving fewer benefits than one person making $X. If you wanted to pay fewer taxes, you wouldn't use this scheme except in a few strange edge cases. I don't think the brothers are sharing a passport, a driver's license, and tax filings in order to reduce their tax bill...

(Reading between the lines, since you didn't seem to pick up on it: one of the brothers is an undocumented immigrant. The goal is not tax minimization... the two brothers are paying more taxes while receiving fewer benefits in order to avoid deportation of the undocumented brother.)

Actually I think one of the brothers never got a birth certificate because their mother didn't want to do the paperwork.

Truly strange case. Why hasn't he resolved this issue?

Sorry, are you saying that criminal impersonation should be legal, because making it illegal excludes people and may be a net loss to the nation? If they want to be included, surely they can just be honest about who they are.

> living under the identity of someone else

Quite sure most people, the vast majority of people would rather this be tightened up just for the fact that they don't want to have others living under their identity.

As for brothers sharing a passport, I doubt that these laws would affect them the same way, especially if they're twins and pass for each other. But then, just because they can do so, doesn't mean that they should.

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