Do Banks Profit From Fraud?

“Like most consumers, I had always assumed that banks and customers are united in wanting to curtail bank fraud.”

So begins an August 23rd article in the Huffington Post. I’ve been saying for years that banks have a revenue stream in fraud. I made the statement very publicly as Merchant911′s Director on the CBS Evening News several years ago in reference to chargeback fees to merchants. Naturally, an American Banker’s Association spokesperson denied it – instead saying the fees were “to encourage the merchant to be more careful.” I’m not sure I understand the difference there but that’s what they said.

At any rate, if you think the bank is your friend and wants to stop fraud, I suggest that you read the Huffington Post article above. You should probably put aside any preconceived ideas first. It might keep you from being quite so shocked.