Tomorrow is the deadline that Visa and MasterCard have set for banks and retailers across the US to roll out a new system for more secure bank cards with microchips embedded in them.
Over the last few years, card issuers have spent between $200 million and $800 million to distribute new debit and credit cards to accountholders, while large retailers like Target, Home Depot and Walmart have spent more than $8 billion to install new card readers capable of reading the chips.
Despite this effort, retailers say the new system is highly flawed because instead of issuing the so-called chip ‘n’ PIN cards that offer two-factor authentication, banks and other card issuers are distributing chip ‘n’ signature cards, which thieves can easily undermine.
“Chip and PIN has been proven to combat fraud dramatically,” says Brian Dodge, executive vice president of the Retail Industry Leaders Association. “But that’s not what American consumers are getting, and thus far banks have gone to great lengths to blur the lines between the two distinctly different transactions.”
Even with PINs, however, the new technology will not eliminate fraud, but will simply shift the type of fraud that occurs.
The Hope of a More Secure System
The new technology—called EMV for Europay, MasterCard and Visa—consists of cards with a microchip that contains data traditionally stored in the card’s magnetic strip. These work with new point-of-sale readers that scan the chip and process payment transactions in a secure manner using encryption.
The chip reduces fraud because it contains a cryptographic key that authenticates the card as a legitimate bank card and also generates a one-time code with each transaction. This means thieves can’t simply take account numbers stolen in a breach and emboss them onto the magnetic strip of a random card, or program them onto the chip of a random chip card, to make fraudulent purchases at stores or unauthorized withdrawals at ATMs.
If the world thinks a work is authentic, then it is authentic—and here are the many ways art hoaxes can work
Can you tell if someone’s lying? There are scientifically proven traits that most people exhibit when they’re cooking up a lie. Sweaty palms. Dry throat. Tight collar. Fidgety movements. Right-handed people tend to look up and to the left when thinking up a lie, and up and to the right when trying to recall a truth—the opposite for lefties. But can you tell if an object is lying? If it is not what it appears?
You sure can. Studying how forgers have successfully pulled the wool over our eyes offers some revealing clues as to how to avoid being fooled in the future.
There are some surprising characters in the pantheon of art forgers. Before he was a household name, Michelangelo began his career forging ancient Roman sculpture. He created a new sculpture out of marble, then intentionally broke it, buried it in a garden, and dug it up, declaring it to be a lost Roman antique. The cardinal who bought it grew suspicious after a few years, and demanded his money back from the dealer who had sold it to him. But the dealer was happy to accept because, by then, Michelangelo had made his famous Pieta and was the hottest new artist in Rome—the sculpture was sold on for a fortune, now as a Michelangelo original.
Many of the most famous forgers are more prankster than gangster: part illusionist, part admirable artist, part charming rogue, and all ingenious, often depicted by the media as harmless Robin Hood types, duping only wealthy and elitist individuals and institutions. They are often failed artists who turn to forgery to show up the art world that rejected their original creations and that they feel deserves to be shown up. Those who are caught, sometimes after decades of success, are found out through some accidentally inserted error or anachronism. Shaun Greenhalgh had a 17-year career as the most diverse forger in history, passing off everything from ancient Egyptian sculpture to 19th century watercolors. He was entirely self-taught, buying books from which he copied works and styles, and simply ordering materials off the Internet, while he turned his garden shed into his forgery studio. He was caught when, on what was supposed to be a 7th century BC Assyrian relief sculpture, he accidentally misspelled a word in cuneiform.
But not all anachronisms were accidental. Lothar Malskat forged medieval frescoes that he supposedly found during a church restoration. They were so admired that the German government ordered the printing of 4 million postage stamps featuring a detail from them. Such a success is a private one—only the forger himself knows the truth, and sometimes that’s not enough. Malskat wanted notoriety for having pulled off this fraud, but no one believed him, so he took the unusual step of suing himself, in order to have the public, official platform to explain that he really was the forger. He was disbelieved until he pointed out two “time bombs,” anachronisms in his work that he had intentionally inserted, just in case he was not believed. He had painted a turkey into the fresco—indigenous to North America, there were no turkeys clucking around medieval Germany. And he’d also inserted a portrait of Marlene Dietrich—who was definitely not clucking around medieval Germany.
Without question, attempting to pass off a counterfeit Rembrandt was an incredibly brazen move on Ely Sakhai’s part. But brazen he was, and he did have a certain advantage in his scheme: the legitimate ownership of the authentic painting that he had his artists copy. The authenticity of his Rembrandt, The Apostle James, was not questioned. Nor was the fact that it was purchased by Ely Sakhai from a reputable source. So when he would offer what he purported to be the painting for sale, it didn’t raise questions about authenticity, if only because those interested in the painting perhaps failed to imagine the nefarious scheme of the seller. Thanks in large measure to his travels in the Far East with his wife, Sakhai made it his mission to establish a steady clientele in Tokyo and Taiwan too. and in June 1997, he sold his Rembrandt to the Japanese businessman and art collector Yoichi Takeuchi.
Takeuchi had been a customer of Sakhai’s since 1992, when he started buying art from him in a complicated deal involving a third party who would later allegedly renege on their part in the purchase of the artwork, leaving Takeuchi with paintings he didn’t want. When Takeuchi accused Sakhai of a “fraudulent plot” against him, Sakhai replied that he, too, was the victim and had filed suit against the third party. Of course, he had not. The summons he showed Takeuchi was bogus. With a loan balance still due to Takeuchi, Sakhai made him an offer: he’d sell him The Apostle James for forgiveness of the loan plus $350,000. Takeuchi believed that the painting was authentic, and he would go on to say that he was influenced in his decision to purchase the painting at a dinner in New York with a person who claimed to be a branch manager for Citibank. The Citibank representative, said Takeuchi, certified that the Rembrandt was exhibited in the Metropolitan Museum. So the businessman accepted Sakhai’s offer and made the deal for the Rembrandt.
Economics can help explain all sorts of things in life, from what we eat to our choice of romantic partners to where we live. To encourage my Cornell students to consider how economics applies to their everyday lives, I challenge them to “pose an interesting question based on something you’ve seen or experienced personally, and then use basic economic principles to craft a plausible answer to it.” I call it the Economic Naturalist writing assignment.
In my first installment in this series, I described some of my students’ most interesting responses to this assignment. For this installment, I’ll share one more from a 2007 collection of my all-time favorites and two new ones submitted this year. In future pieces, I’ll describe more examples from the past and also respond to questions that you submit. You can send me questions via Twitter (@econnaturalist) or email (firstname.lastname@example.org).
Why are child safety seats required in cars but not in airplanes?
Greg began with the observation that government regulations require strapping your toddler into a safety seat for even a two-block drive to the grocery store, yet permit your child to sit on your lap untethered when you fly from Miami to Seattle. Why this difference?
The cost of using a safety seat is much lower in cars than on a full flight. (Mick Stevens)
Many people are quick to respond that if a plane crashes, all passengers usually perish, whether they’re strapped in or not. It’s true, but then why were seat belts required in airplanes long before they were required in cars? The answer is that being tethered is actually far more important in airplanes than in cars, because severe air turbulence happens far more frequently than serious auto accidents. But then why do regulators permit toddlers to fly untethered?
Using standard cost-benefit reasoning, Greg argued that the real reason for the difference in regulations is rooted in the cost side of the equation rather than the benefit side. Once you have a safety seat set up in your car, there is no additional charge for strapping your child into it. Since the marginal cost is zero and the marginal benefit is improved safety for your child, strapping your child in while traveling in your car makes perfect economic sense.
But if you’re flying across the country on a full flight, you must buy an extra ticket in order to put your child in a safety seat. And that might cost you $1,000 or more.
Some people object that taking monetary costs into account is improper when dealing with issues of life and safety. By that logic, however, people should get the brakes checked on their cars each time they go anywhere. Like it or not, costs matter, even for decisions involving safety.
Why do Nigerian email scammers still use the same tired cover stories?
The man who calls himself “America’s doctor” has recently found himself at the center of a considerable controversy over his scientific credibility. Dr. Mehmet Oz, best known for his very popular television show and his enthusiastic endorsements from Oprah Winfrey, recorded a special episode of his show this week to speak directly to his critics. Oz wants his detractors to know that he “will not be silenced.”
The forthcoming episode, which is set to air on Thursday, is a direct responseto a group of doctors who have raised concerns about Oz’s affiliation with Columbia University. Last week, ten physicians from around the country wrote a letter to the university saying that they’re “surprised and dismayed” that Oz retains a faculty position, accusing him of an “egregious lack of integrity by promoting quack treatments and cures in the interest of personal financial gain.”
Oz has become infamous for promoting unproven natural remedies and weight loss products that aren’t necessarily grounded in scientific evidence. Observers are increasingly raising questions about whether Dr. Oz, who is one of the most recognizable celebrity doctors in the country, is doing more harm than good.
Last year, Oz was hauled before Congress to testify about potential weight loss fraud, in a tense hearing during which Sen. Claire McCaskill (D-MO) slammed him for giving scam artists a platform for “false and deceptive ads to sell questionable products.” Soon after, a study published in the British Medical Journal found that half of the medical advice on his TV show is either baseless or incorrect. More recently, WikiLeaks released a series of emails that suggest Oz makes decisions about which products to promote based on business considerations — and the financial backers who support his show — rather than on the best medical evidence.