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.