Pricing Algorithms, Social Engineering Fraud Insurance, and Chat Bots

Looking for some weekend reading to catch up on developments? Here are three noteworthy developments and blog posts to consider.

  • Pricing Algorithms and Collusion. The Organisation for Economic Co-operation and Development (OECD) is concerned about the potential for pricing collusion when companies use sophisticated alogrithms to set prices and predict trends. The Secretariat for Financial and Enterprice Affairs Competition Committee updated its background note last month. The background note raises the question as to whether algorithms need to be regulated to prevent pricing collusion that could occur without any human intervention. Read the background note here.
  • Fraud and Crime Insurance Coverage Limitations. In a common social engineering scam, an employee working in accounts payable for company A will be told by someone impersonating vendor Company B that the vendor’s account has changed and to send all future payments to the new account.  If the employee instructs the bank to transfer funds to the new account, will company A be insured for its loss when company B comes looking for its payment? The law firm Blaney McMurtry tells us that a claim for recovery under an insurance policy under the “funds transfer fraud by a third party” coverage was rejected by the Alberta Court of Appeal on just these sort of facts. While the instructions to company A were fraudulent, the employee’s instructions to the bank were not. Read the Blaney McMurtry post here.
  • Chatbots and E-commerce. Chatbots are quickly becoming an important tool in e-commerce. A chatbot simulates a customer service representative so that e-commerce customers can ask questions and receive responses. Chatbots allow organizations to provide online customer service 24/7 without staffing a call centre or chat centre 24/7.   Read Venture Beat’s guest author Stella Saroyan’s article “How chatbots are helping ecommerce evolve.”