Little Assurance From ID-Theft Insurance

I was suspicious, because when I ran another search on a friend whose number is in the phone book, the same Intelius ad turned up with that person's name in place of Jain's. I soon realized that Intelius had bought an automated ad on Yahoo's People Search that appears to blindly plug in whatever name you type and claim it has found that person's unlisted number. That became clear when I typed in "garbage" for a first name and "can" for the last name. An ad for another Intelius background search appeared stating, "Garbage Can Unlisted Phone Number & Address Found."

Next I visited Intelius.com and signed up for ID Watch, which the site said would provide me with a personal "identity report" and e-mail alerts if anyone sought credit in my name or it detected other suspicious information about me. For $30, I bought a three-month trial.

The report I got back seemed sketchy and confusing. It correctly listed my current and two prior addresses but not my home phone. Most annoying, it listed a "J. Walker" as a name "associated with your personal identity." To find out who J. Walker was -- or how that person was linked to me -- would cost $50 more for a separate background check. Was this a come-on to get me to pay extra?

To be safe, I clicked on the "background check" link and bought a report on the mysterious J. Walker. What it produced scared me at first because I recognized his address as a state prison I had visited as a cub reporter. But I soon realized the lengthy report I was reading actually profiled many J. Walkers. Surely not all had stolen my identity.

Next I decided to test the company's background service using Naveen Jain as my subject. After all, it promised rich details about anyone, including a 30-year address history, relatives and associates who lived with them, current and former employers and any lawsuits filed against them. But the report it produced was skimpy at best. It showed Jain's current address and phone number along with 10 other addresses. The only relative or associate listed was a woman I assumed to be his wife, and no employers were named. No civil suits were reported, either.

As it turned out, I learned more about Jain by entering his name into Google's search box, which produced an in-depth series published by the Seattle Times this year detailing the legal actions filed against Jain and InfoSpace.

This week, I asked Jain about the mysterious "J. Walker" in my report. He said Intelius has found that about 10 percent of Social Security numbers have more than one name associated with them. Reasons vary and can include data-entry mistakes as well as fraud. He also noted that in the month since the service has been active, no customers have filed claims against the insurance.

I also asked about the misleading Yahoo ad. Jain said Yahoo's privacy policy prevents Intelius from presenting real Intelius search results in the ad.

Since Intelius had piqued my curiosity about identity-theft insurance, I called around to other companies offering similar services and industry analysts to see which products, if any, they recommend.

Opinions varied, but those I consulted recommended people buy some form of premium credit monitoring from an established company rather than a start-up such as Intelius. Several also said it was best not to rely on the free annual credit reports Congress mandated be made available to all consumers by Sept. 1 this year.

While the free reports do provide some value, buying a premium weekly monitoring service from a credit bureau can reduce detection times and lessen the impact of any fraud, said James Van Dyke, founder of Javelin Strategy & Research, a consulting firm that studies identity fraud.

Services he recommended included those from MyFico.com and Equifax, in part because he considers their advertising more truthful than most. He noted that the Federal Trade Commission this month settled a complaint against Experian Consumer Direct that it had fooled consumers into signing up for a paid monitoring service with an ad that said "Get your FREE credit report online in seconds."

Pam Dixon, executive director of the World Privacy Forum, agreed that consumers should buy a monitoring service if they can afford one -- or take advantage of identity-fraud riders that some insurance companies offer as an inexpensive add-on to homeowner policies. But Dixon considers most ID insurance products unnecessary because financial losses are usually covered by the credit card company or bank after the incident takes place.

Ironically, many of the companies selling fraud protection are the same ones whose loose data-handling policies helped fuel identity theft in the first place, several analysts said. And most contended that Congress should require that credit bureaus notify consumers for free of any bogus information that appears in their records.

"It is an abomination that people have to pay for credit-monitoring services and ID-theft products," said Beth Givens, director of the nonprofit group Privacy Rights Clearinghouse. "It should be stuff they get for free."

Leslie Walker's e-mail address iswalkerl@washpost.com.