[hyperplane]

Brilliant advice, but I would (optimistically) assume that Coinbase is doing some or most of these things? Fraud is a pretty well-solved problem for most payment processors.

It's a "user-friendly" feature that sacrifices some of Coinbase's own bottom line (and security) for the sake of those that want convenience over security. I wouldn't be scared unless this is enabled on your account. (In fact, from the usability end, it should require some serious hurdles to be enabled in the first place for that reason, to protect against unauthorized enabling.)

The sacrifice for Coinbase seems to be that the people that would enable this feature are accustomed to calling up Visa/MC, reporting a fraudulent transaction, and getting their money back + an affidavit in the mail, so Coinbase will have to be able to cover a fraudulent bottom line either out of their own finances or a good insurance policy.