[xanados]

If you think there is no victim I think you may not have a very firm grasp of economics. In particular, small negative consequences borne by many economic actors adds up to legitimate negative economic consequences, even if there is a collective action problem in addressing them. In order to make the argument that there is no victim, you will have to describe how this fraud is wealth creating, without appealing to any broken window fallacies. I guarantee this is impossible.

In reality, the costs of fraud are shared widely, and there are definitely victims in aggregate. First, the merchants are clearly victims. In a counterfactual universe that contains no credit card fraud, merchants pay lower fees to accept credit cards, and make more money for selling the same amount of goods at the same prices. Second, consumers are definitely victims. In the same counterfactual universe, consumers pay less for goods by a tiny margin, and thus are able to consume more and achieve higher levels of utility. Additionally, in this counterfactual universe, nobody has to deal with credit card fraud, which is an inconvenience which has both a direct dollar cost, in cases where people aren't satisfied with their legal protection or incur legal costs in exercising their protection, and in non-dollar costs like having to call their bank, stress, broken relationships etc. Note that these are real costs and lower standards of living and utility even if they aren't dollar costs.

From a macro perspective, it's obvious that fraud has a negative impact on the economy. All of the effort that is spent by every fraud researcher, fraud company, credit card company fraud agent etc. is fundamentally unproductive effort which is nonetheless included in GDP. If these people didn't have to deal with credit card fraud, because it simply didn't exist, they could be gainfully employed in other productive fields that work to meet the hedonic goals of other humans.

I just want you to be aware of the tough row you have to hoe if you are really planning on going down this path, and if you ignore the above arguments, well, you aren't making a very compelling case.

[davidu]

Collective action problems imply a lack of consequences. QED.

To your point that all the effort to combat fraud implies there is a problem, you've created a fallacious point.

To your point on unproductive exercise, I believe it is wasted effort and loss. Perhaps the real victims of fraud are fraud fighters!

To inconvenience as a form of consequence, you clearly already understand the difference there.