Little Assurance From ID-Theft Insurance

Naveen Jain is chief executive of Intelius Inc., which offers an identity-theft-protection service.
Naveen Jain is chief executive of Intelius Inc., which offers an identity-theft-protection service. (By Patrick Hagerty For The Washington Post)
By Leslie Walker
Thursday, August 25, 2005

Identity thieves are the serial kidnappers of white-collar crime, and I'm convinced they will commit many more electronic snatchings before anyone figures out how to thwart them.

So I was all ears when a Seattle-based data broker called Intelius Inc. dropped by my office touting its new identity-theft-protection service, which it claims does more than similar offerings from major credit bureaus. Like many people, I had received a confusing array of offers for identity-theft protection over the past year. Since I had no clue what might prove useful, I listened intently to Naveen Jain, chief executive of Intelius.

"Identity thieves leave fingerprints, tons of trigger points, such as when your Social Security number is attached to a different person, or you get a change of address but no disconnect on a phone," he explained.

Jain claimed his staff had devised fancy formulas that analyze data in new ways to catch ID rip-off artists in the act -- often faster than a standard credit-monitoring service, which typically alerts you only if someone signs up for unauthorized credit in your name. His company's $8-a-month "ID Watch" service went live last month, promising it "detects, prevents and insures against identity theft."

It sounded so good I was ready to sign up on the spot. That should have been my first tip-off that Intelius might be promising more than it could deliver. The second was my recollection of Jain from his days as founder of InfoSpace Inc., a high-flying Internet data company that crashed but managed to survive after its board pushed Jain out. He and the company were then slammed with shareholder lawsuits.

Now here was a slightly humbled man ("I can't believe some of the things I said to you back then," he chuckled), saying his new company had spent the past two years acquiring data about individual Americans so it could sell background checks over the Internet at $50 a pop. It expects to generate $60 million this year from those digital dossiers, he said, many bought by folks checking out prospective dates or people applying to work in their homes.

"People think of it as snooping, but in reality it's about personal safety," he declared.

Intelius's latest software, according to Jain, tries to make additional use of the billions of factoids it scoops up from public and private records -- property transactions, court records, magazine subscriptions, catalogue purchases, business licenses and the like. It even scans the Internet for information on compromised Social Security numbers and credit cards, then flags any clues left by identity thieves.

I asked for examples, but he didn't want to give away details of what he called his "patent-pending, early-warning system." The main example he provided was that Intelius buys information from phone companies nationwide on some 200,000 telephone connections and disconnections made daily, then compares it with change-of-address forms filed with the U.S. Postal Service. ID thieves often file change-of-address forms, he explained, and the lack of an accompanying phone order could signal something is wrong.

Identity Fraud at a Glance
By the time he finished pitching his service, I was thinking what a bargain it would be if it did half what he claimed -- not only detecting crime in its early stages, but also providing an advocate to help straighten out any fraudulent activity and throwing in $25,000 worth of insurance to cover lost wages and related costs.

After he left, I went online to check out Jain and his firm. First I ran a "People Search" at on the name "Naveen Jain" in Washington.

Yahoo couldn't find him but displayed a big ad from Intelius claiming it had found Jain's unlisted phone number, along with his age, address history and family members. Clicking on the ad led to an offer at to run a "background check" on Jain for $49.95.

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