Saturday, 23 June 2012

Scams: Type I and Type II error

Sometime after the September 2010 earthquake, I got a call from somebody claiming to be "The Earthquake Recovery" promising that, because I'd had chimney damage, I could get a free heat pump. All they needed were a few of my details. I laughed and hung up on them - everybody has chimney damage, the offer sounded too good to be true, and "The Earthquake Recovery" sounds about as plausible as "The Commonwealth Lottery" or "I'm calling from the Windows Operating System".

After I figured out it wasn't a scam, I sent them an email saying that if they wanted to give me a free heat pump, I'd be happy to take one, but noting that the damaged chimney leads to an open fireplace that hasn't been used in at least a decade. I never heard back. I suppose if I am eligible for an extra free heat pump, my opt-out contractor will let me know about it tomorrow morning.

I made a Type I error, rejecting the true null hypothesis that the caller was genuine.

David Farrar reports a more costly error on the Type II side. I suppose if 419 scams didn't work with low probability, nobody would bother trying.

I'll stick with my current heuristics.


  1. There's more method in the scammers arsenal than maybe we thought:

    It appears the Nigerian scammers deliberately make spelling mistakes and shonky English to weed out the more intelligent/wide awake and thus leaving a much smaller grouping of the susceptible. A likely better return for effort.


    1. Had seen that, but I'm not going to revise my heuristic; would just encourage them to run mid-level plausibility to snag my type.

  2. sweet Jesus the only bloke in Christchurch that would not take the pay out. Christchurch people were disgracefully dishonest during this whole thing Eric. Ask me for proof. They Christchurch were utterly and disgracefully dishonest. They found broken glasses underneath dropped off tv sets which bounced off walls and wrecked the walls on the way down and smashed chimney and don't give me the bullshit that I have bad friends. Christchurch people suck, they are weakling and dishonest and I am glad to be away from them poor idiot people.

    1. Oh, I've heard the stories too. But I'm dumb enough to point to the one leadlight and say "That one was cracked before, but this one is a new crack; that window had minor cracking before but now is worse."

  3. Because of all the opportunistic claims ACC started refusing practically anything and everything from early 2012. Quite serious deficiencies now have to wait months if not years for the arrival of Fletchers. Legitmate repairs which the landowner would previously be allowed to make good before are ignored now .
    ACC way of telling you that you are refused is a no reply.
    As above it was a culture of dishonesty in Christchurch which brought this on us. And as well the utter overwhelming incompetence of EQC.

  4. I think that I give the impression above that the nurtured and contrived claims were from poor people. This isn’t so, The claims I heard about were from the relatively well off.
    Once we heard of our brothers and friends banking good sums from
    chattels claims it became hard to resist, and this is how Christchurch started to become dishonest with regard to claims.
    There was a feeling in the air, well we have taken a hiding, and it is not as though we are taking money from people we know its only Insurance, and so it is ok.
    It quickly became apparent in the early days after the first September earthquake, that you could get ratification over the phone and send invoices in for all sorts of things that needed upgrading.

    Favourites were bench top articles that could have fallen and this is the TV, video recorder, amplifier and bench top computer group.

    But as well in those early heady days you could give EQC an estimate for wall and ceiling damage, and repair yourself. A close relative of mine put in a quote for $5500, for repair of cracks in walls, received the OK and the work he told me, took ‘several hours’

    The game became more sophisticated , it was a useful to be able to apportion long delayed home repairs and maintenance across to earthquake damage.
    Now after two earthquakes, especially the trauma of february assessors were instructed to be sympathetic and generous. And they were.
    People would follow an assessor outside of the property and eyes widen as they heard him say this pathway and this driveway have cracks and damage and we will have to repair.
    Well the property owner knew that the cracks and deficiency had been the work of years of wear and tear, since 1967 maybe.
    But soon doors and windows that had not shut properly for ages were also in the list of earthquake damage. Some of these decisions may change.
    Fletcher Challenge are re-assessing the assessors generosity as they arrive at your property
    But the culture was now well set. This is an opportunity for massive upgrading of the house , repairs and maintenance neglected soon to be put right.
    And those chattels that flew around the house and garage were destroying other things in their flight.
    There are successful stories of claims for washing machines and dryers, which fell over in spite of a solid wide base.
    Thousands of pairs of reading glasses got trapped under other things falling.
    Towards the end of the claim feast, a person I know well, claimed for a new front door. She didn’t like its peeling paint. She rang EQC in front of me, and said her door had damage from quake and it leaked.
    Four weeks later they paid a $900 for a nice new solid core door.
    They required no photo and no report from the tradesman.

    Now the fire places were interesting, EQC would replace fireplaces where chimneys had fallen over. But they also decided to upgrade many logburners.
    What you had to say is that the earthquake twisted the flu pipes and smoke comes in to the room OK new logburner.

    We became dishonest because we were encouraged to be so by our friends and neighbours and EQC itself. Most of us who made opportunistic claims are proud of it, and we tell these tales.

    Not all of us. Eric the writer clearly has not become dishonest.
    I could try to teach him how to be so but I bet I would fail

    1. This is the mess we get with EQC instead of private insurers. Private insurers KNOW this stuff. That's why they void your whole claim if they find you lied on a small part of it. And so everybody's honest.

      I do plan on doing some upgrading when the work's being done at our place. But as a separate bill on top of the work that'll be covered by insurance.

      The one that bothered me: middle class folks who encouraged us to take up the Red Cross emergency payment because we were out of our house for a month. We had insurance that covered it. I can't imagine anybody donating to Red Cross would have had in mind providing a transfer to some relatively well off people for costs we were already having covered. I don't know other folks' financial situations, so can't comment, but others seemed to think we were nuts for not filing for the $500 grant or whatever it was.

      After the September quake, it felt like EQC was running a regional development programme rather than insurance. Things seemed a lot tighter after February. Or maybe that was just random variation in the assessors we had in Dec 2010 compared to July 2011.