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.
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 Yahoo.com 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 Intelius.com to run a "background check" on Jain for $49.95.
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.
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 is firstname.lastname@example.org.