"False Positive" - Roll that around your brain and tell me what you think

Mention the phrase "false positive" to a bank fraud analyst or investigator, and you get range of reactions: from an angry gnashing of the teeth to tired submission. I think it is fair to say that none of these emotions on the continuum portend quick, decisive action!

The false positive is the bane of fraud analyst's existence. If you want to do a great job fighting bank fraud, you often have no choice but to weed through these nasties. On any given day, they test the mental fortitude of the most well-intentioned. Over the years, it is inevitable that a few legitimate cases of fraud slip through the cracks. Over a career, they can produce that most jaded of fraud fighters: the skeptic (cynic?) that disbelieves that the false positive problem will be reasonably controlled.

But what is a false positive anyway? Technically, only alerts that result a determination of fraud are true positives: all other alerts are false positives. But some alerts are so suspicious that you'd rather investigate than not, right? And how about an alert which does not directly point to a problem, but triggers an investigation that finds you something much different, and perhaps much bigger? The equivalent of the traffic cop stopping the guy that runs a red-light, only to find the loaded, unlicensed hand gun in the back seat.

And how quickly can you explain an alert away as a false positive? I am always amazed at how quickly fraud analysts work through their case load. I think there's an element of Blink (Malcolm Gladwell) in how fraud analysts do their job.

How can thinking that takes place so quickly be at all useful? Don't we make the best decisions when we take the time to carefully evaluate all available and relevant information?

Certainly that's what we've always been told. We live in a society dedicated to the idea that we're always better off gathering as much information and spending as much time as possible in deliberation. As children, this lesson is drummed into us again and again: haste makes waste, look before you leap, stop and think. But I don't think this is true. There are lots of situations--particularly at times of high pressure and stress--when haste does not make waste, when our snap judgments and first impressions offer a much better means of making sense of the world.

Do you recognize this feeling of "rapid cognition" that Malcolm Gladwell talks about in fraud prevention?

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