I recently conducted an interview with Scott Mitic, CEO and co-founder of TrustedID, a company promoting a new kind of service in proactive identity protection.
You can listen to the audio below. I had some real challenges with the audio code on this interview, so if it's hard to understand, I've posted the transcript below as well.
Identity Theft Secrets: This is Jonathan Kraft with Identity Theft Secrets and I am here today interviewing Scott Mitic, who is the CEO and co-founder of TrustedID. How are you doing today Scott?
TrustedID: I'm great thanks Jonathan, how are you?
Identity Theft Secrets: I'm doing great! Thank you very much for taking a few minutes with us today. Well, let's just get started right into this. Can you review for me, the background behind TrustedID? What started it, who started it and why was TrustedID started?
TrustedID: Well I started the company about three years ago with a co-founder and it jettisoned into a business in finding ways for consumers to be able to proactively prevent Identity Theft. I had a wife who was victimized twice in the course of about three years and while looking at the experience she had, I realized there was really no effective solution available to anyone in the U.S. to help stop identity theft before it starts. And that's what started TrustedID.
Identity Theft Secrets: And I know you've got a partner in the business as well.
TrustedID: I do; I co-founded the company with Omar Ahmad, who's also on our board now.
Identity Theft Secrets: Talk a little bit more about, you said your wife actually was a victim twice, can you explain kind of what happened with her identity theft and how that took place?
TrustedID: Well, the first time was someone in the state of Florida who assumed her identity; committed crimes in her name and also got credit in her name. Someone printed checks using my wife's name and her account number and passed bad checks. So as is the case very often with identity theft, the financial loss that we incurred, that she incurred, not nearly as significant as the time loss that was incurred. Everything from standing at the police station waiting for an officer to show up to take your report down to trying to track down what credit was opened in her name and then finding a way to convince the lender, or creditor, that that was actually not her debt, but that of a felon that she had never met.
Identity Theft Secrets: Which I imagine that process is very difficult. I know from having talked with a bunch of people; they've had some real challenges trying to prove that they're not themselves.
TrustedID: Exactly. And I think that's only going to intensify over the course of the coming months or years; as the credit crunch comes upon us, there are more and more people looking for perhaps easy ways to get out of their debt. You can understand a lender being somewhat skeptical when a customer calls and says, "you know what? That's really not me;" when you've got that card. So it's a natural reaction of that same lender to think twice and to require a little extra proof before they accept it's the work of an identity thief.
Identity Theft Secrets: And you said before that you didn't really see anything after looking for ways to help your wife. You didn't really see anything in the market that was there to proactively prevent identity theft and I think that's part of the reason you started TrustedID. What does proactive identity theft prevention mean and how do you do that?
TrustedID: The only way for a consumer to even think about understanding or protecting from identity theft up to a couple of years ago was credit monitoring. And that's still obviously a huge, huge part of this business; this industry is built around credit monitoring. By some estimates there are up to 3 million Americans who are subscribing to some form of credit monitoring service.
And that credit monitoring is good, but certainly not the best. And the reason it's not the best is that it simply alerts you after an identity thief has already started to manipulate your identity, or has already started to commit the crime or the fraud. So it's reactive rather than proactive; it's alerting you to something which has already happened.
And I don't know about you, but if I have the choice between locking my door and keeping the thief out versus having an alarm that rings when that thief is already in my house and maybe standing there in my front hallway with my television set in his arms? I'd much rather have a powerful way to lock the door. And so that's what we're trying to do with TrustedID, is build those kinds of solutions that let's you lock the door.
And in the case of the solution that we have today, it's called IDFreeze and it helps that "locking process" by letting you put a fraud flag on your credit report. And that fraud flag, as you may know, requires a lender to call you before they issue credit in your name. And in doing so, you can stop most of the cases of identity theft that are related to what's called New Account Origination. When a new account is originated in your name and you're not aware of it.
And we also have Consumer Freezes of Credit Reports and this is something which is the next level up in identity protection. A credit report freeze actually stops your credit report from being seen for any reason, from any inquiry, anything that can lead to identity theft. And so this is really the "Fort Knox," this is the ultimate. It really puts your identity in lockdown and you are virtually guaranteed of never having a thief get credit in your name.
Identity Theft Secrets: Is it possible for somebody else to do that on, let's say that somebody wanted to do that. I mean I've already got this kind of thing setup on my own personal credit, but let's say I didn't, and someone went and decided to lock it down in my name, is that possible for somebody else to lockdown my credit and they basically get the access to my credit by locking down my credit in their name?
TrustedID: You know, first of all, the power of the human mind is amazing and I think it's virtually impossible to stop a determined thief from accomplishing just about anything in this world. It is possible that someone could lockdown your credit and then have the power to unlock your credit when they wanted to get access to it. But to the best of my knowledge, I've never heard of any case of that happening. Obviously an identity thief is going to go after the low-hanging fruit first and unfortunately, fortunately for them, there is a lot of low-hanging fruit to be picked first.
Identity Theft Secrets: That's definitely true. We hear about that all the time on Identity Theft Secrets. Just with people reporting their stories of what they've gone through and they didn't realize that they were the low-hanging fruit before someone got a hold of them.
TrustedID: Unfortunately, you rarely realize that you are the low-hanging fruit until you've been picked! Yeah, why didn't I do what people told me to do, what the common sense thing was to do? These things are common sense, not putting your social security number in your wallet with your card to having a little bit of anti-spyware protection on your PC and things that just seem like it's so simple that every one would be doing it and unfortunately they're not. And we're at the point now in America where, if you read Gartner's study from last year, for example, 15 million people in the U.S., you're kind of going to have to start assuming that it's going to happen to you over the course of the next few years -- and the odds are close to that. So I think we're at the stage now where everyone needs to be thinking about this consciously. The same way they think about protecting themselves against an auto collision, or protecting themselves against a kind of medical calamity; you have to be thinking about what to do to protect yourself and your identity.
Identity Theft Secrets: Well you mentioned a couple of things there; obviously not carrying your social security number in your wallet is a good idea and having some sort of anti-spyware or some sort of protection on your computer. Would you also go into some of the other things if people don't have TrustedID service? Obviously you're partial to TrustedID, but if people don't have TrustedID service, what other things would you recommend that they do?
TrustedID: Sure, well you know, the first thing I should say is the tools I mentioned earlier, both a fraud flag and a credit freeze, are things that individuals can do themselves. You can write letters or call the credit bureaus and you can put those fraud flags and even freeze your credit report on your own. So even if you don't want to use a service like ours, I would encourage a consumer to try to do that themselves. Now, it's painful, cumbersome and can truly try one's patience and that's why many, many people who have tried it themselves come back and say, "ok, I'm ready for someone to help me now that I know how miserable that made me." But for the right kind of people, those that are do-it-yourself-ers, it's certainly something I would recommend.
Other things just to keep in mind; vishing. A kind of derivative of the word "fishing" but starting with "v" it's something we're hearing more and more about. It's when people call you and try to get information out of you by telephone by claiming to be your bank, or claiming to be your doctor, claiming to be your neighbor; when in fact, they're not. And this is the same as those emails you get every day, you need to log into your bank account that you don't really have just transposed through the phone. The rule here is never give personal information to anyone who calls you by telephone. You need to call that company back at the telephone number that you have for them, not one that they give you, and provide them answers to their questions through that method. Keep in mind you can't even trust your caller id these days, that can be easily spoofed. So that's why we recommend calling back anyone who calls you on personal information.
Shredders, great idea! I would use one for any personal information that's coming into the house. And increasingly we're seeing cases of medical identity theft which are not easy to prevent. You can get a good read on whether or not you're currently a victim of identity theft by writing to your insurance company at least once a year and asking them to provide you with a statement of all the claims that have been paid in your name for the previous year. That will give you a sense if someone might be using your insurance information to get benefits for themselves. So those are a few of the highlights.
Identity Theft Secrets: That's a really good tip actually, we haven't ever had anybody tell us that somebody should do that, but to write to their medical insurance company and say, what have you paid out in my name in the last year? I think that's a really great suggestion.
TrustedID: Right, the smart thieves of course, will get your insurance information but then change your mailing address. And if you're like me, every time you go to the doctor, you get a statement of the claims that talks about what service was provided and what percentage of that the insurance company is going to pay, but if a thief redirects your mail, changes your address on you, and then continues to use your insurance, you just won't see any of those claims until it's too late. And the real danger here is twofold: one, you'll never be paying the bills and at some point you're going to go into collections and your credit score is going to be hurt and secondly, perhaps even more dangerous, is that at some point you may end up in a situation where you need emergency healthcare and when a provider goes to get your medical history, your history is going to be combined with another person's and there's certainly a scenario where that can be a life or death matter when a doctor is making a decision based on flawed information.
Identity Theft Secrets: And on the other side of that, there's all these data breaches. People do everything to protect their information, but then like a medical insurance company actually loses their information through a data breach. Obviously TrustedID as a company is collecting a lot of people's personal information. And I think one concern that people have is that they hear about these data breaches every day and they're wondering, "how can I be sure that the information I'm sharing with a company that I've hired, like TrustedID, to protect my identity or protect my information, how can I be sure that their employees and their people that they work with aren't going to lose my information through a data breach or steal my information through some kind of employee that maybe isn't completely above-the-board. So how does TrustedID deal with that question from people?
TrustedID: Yeah, it's a great question by the way. And a rightful answer for any customer or any partner or any potential customer that asks us. Here's what I think is different about TrustedID versus some of those companies that you do read about in the headlines every day who have lost customer data. In many cases, those companies are older companies, they have legacy technology systems, they have multiple systems, they're having to move data back and forth between systems. They were built in an era where security and privacy were not the focus. And TrustedID is the antithesis of that, we, from the very first day, have built every system we have with an unwavering eye to "best-in-breed" or "best-in-class" security. So absolutely everything that happens in this office from background checks on employees to strictly controlling who has access to what information to super-secure encryption and data security; it's all been built to ensure that to the best of our abilities, we are not going to make the headline that you're reading about in the newspaper.
Identity Theft Secrets: Awesome! Well I'd think that would be the end-all/be-all of a company that does some sort of identity protection is to lose their own customer's or their own employee's information through some employee or through some data breach or hacking I think that would be the end of it for a company, so good to hear that TrustedID is doing a lot of things in that arena.
Kind of switching gears, I know we're being recorded here and are going to rebroadcast this recording around the world. But what is your personal opinion of the credit bureaus and the job that they do, the work that they do?
TrustedID: So the credit bureaus are at the center of our credit-eco system in the U.S. And it's hard to think about a set of companies that are more instrumental in the life that we live, in the U.S. at least. I mean, because of the credit bureaus and because of the aggregation of data that they all hold, they provide an incredibly valuable service and that is that they enable you to get cheap credit. Because of that data, they know that I am a good customer, that I pay my bills on time and as a result, I qualify for a good loan. And I don't qualify for that loan based on who I know at the bank, or what the color of my skin is or who my father is. It's all about me as a person and my performance paying my bills.
It's a great system from that perspective and something which is truly unique. You have to go to countries like Korea or Brazil or South Africa or the U.K. to start to see systems that are even half as developed as we have in the U.S. So generally speaking, I think we owe a lot to the credit bureaus for the lifestyles we are allowed to live in the U.S., assuming you think that a credit-based lifestyle is a good one to lead.
As with any company, there are the downsides. In the case of the credit bureaus, it's the fact that they process billions of pieces of information every day and there are certainly challenges with that. So you've probably read some of the same studies that I have that talk about percentages of errors in credit reports being somewhere between 25 and 50% of people have erroneous information in their credit reports. Probably true, but when we look at it in a whole and you look at how much of that bad data is actually effecting your credit rating and it's probably a much less impactive or less put number.
Identity Theft Secrets: I guess personally, I've had different experience with that where the credit bureau, I have inaccurate information on my credit report right now actually that I'm trying to get removed and it's effecting my ability to refinance a mortgage. And so it's interesting because I think there are some challenges there on the credit reporting side. But I agree with that perspective, I hadn't heard that very much before where somebody actually says, "look at the abundance it's allowed us to have in the United States, because we're able to live a credit lifestyle." Most of the time you hear about people going you know, "credit bureaus are awful!" And so it's interesting to hear that perspective, I think that's definitely a good perspective on it and something people should consider when it comes to the credit bureaus.
TrustedID: I think some of that negativity that you get from the credit bureaus is because they have been for many years closed, secretive organizations that are difficult for consumers to do business with but very easy for businesses to do business with. Right? If you're Citibank, believe me, you get great service. If you're poor Scott or Jonathan, your service might not be quite as good. That's changing over time as well and certainly in just the last five years there has been a pretty significant shift. But that doesn't make you feel any better when you're trying to refi a loan and you've got something on your credit report that shouldn't be there. And keep in mind by the way; it may not be the credit bureaus fault that it's there. Typically credit bureaus are just reporting the information that is being given to them by lenders. So, I'm not sure about your case in particular, but very often the root of the issue is with the lender, not with the credit bureau.
Identity Theft Secrets: And that is the case with mine. But it deals more with the companies that I've, on some level, chosen to do business with that they are the ones who are reporting that information inaccurate.
Well, I imagine you're familiar with a lot of the competition in your space, obviously there's LifeLock, it's doing huge media blitz and big marketing campaign and then you've got Pre-paid Legal Services has an Identity Theft Shield and Kroll Background America has kind of partnered with them on that. And Tom, I don't know how to say his last name, I was to say Fragler or Fragala, has his Truston service and there's a whole bunch of others in the space, but those are the three biggest names I think of when I think of identity theft services.
How does TrustedID view the competition in the arena and how is what you're doing with TrustedID different from what these other companies are doing in the same space?
TrustedID: Well, I think we're still in the very early days of the industry around identity protection. I think that this industry really didn't exist five years ago, but this is an area that I would predict that one hundred years from now we'll still be talking about because the dangers and the risks and the vulnerabilities that exist now are only going to intensify and increase.
So my perspective, the more companies in this space, the better; because it's helping drive innovation, it's driving new ways of protecting and the chances are that the problems are going to shift from one area to another I mean. As we help consumers lockdown their credit identity, the danger is going to move into the medical identity and then on to another form of your identity and I think this is just going to continue. So the more companies, the better from my perspective.
In terms of what makes TrustedID unique, as I mentioned earlier, we have a focus on this area of proactive identity protection. We are the only company in the U.S. right now that is helping consumers freeze their credit reports at all three credit bureaus. We are the only company in the U.S. right now that's helping consumers protect themselves against other forms of identity theft, such as medical identity theft that we were talking about a little bit earlier.
The product that we have today is the broadest, most innovative product being offered at the most reasonable price and that will continue, that leadership position into the future.
Identity Theft Secrets: So what happens if I have TrustedID's service and I become a victim of medical identity theft character or criminal identity theft, what kinds of things does TrustedID do to help me restore my information?
TrustedID: So we have a team of trained identity theft restoration experts that are here at TrustedID. We don't outsource to any other third party. We basically will wrap you in a warm blanket, as the head of customer services likes to say, and take care of you from that point forward. And that includes not only helping you figure out what needs to be done but also actually helping you do it. And furthermore, covering any costs that are associated with it that are covered under our limited warranty. So the goal is that if it happens to you, while it can never be a pleasant experience, we reduce the pain and discomfort as much as possible.
Identity Theft Secrets: Awesome! So you have two major services that you offer. Do you have other services now and planned for in the future that you're going to be working with to help people?
TrustedID: We have some derivatives. For example, we just launched a really great product with Suze Orman a few weeks back, it's called Suze Orman's Identity Theft Kit. And right now it's available on QVC, but shortly it will be available through a broad set of retail channels. It's actually a boxed product, it's software CD and provides a really extraordinary set of benefits for a very reasonable price, it's under $50 right now. So I think you'll continue to see those kinds of innovative products coming from us that combine great protection with endorsement or with experts that know a lot about this, because there's no better way to protect your identity.
Identity Theft Secrets: Well then partnering with some of those people who already have a group of people that trust them and know them to be ... like Suze Orman, I mean, has been hugely influential and helpful for a bunch of people in their credit and their finances. So I think that's been a very strong move for TrustedID I would imagine.
TrustedID: Well, it gets to that question you asked a few minutes ago about how can a consumer tell these solutions apart when there are three or four or five companies in this space. And you know, we're all busy; we don't have a lot of time to sit down and do the kind of research that Suze did. Suze spent three years looking at this space and trying to find a company that matched her philosophy that she would trust her audience to. So yes, I think these kinds of endorsements really unclutter the field and make it real easy for a consumer to be where the winner is.
Identity Theft Secrets: How long has TrustedID been really doing business?
TrustedID: About the last year.
Identity Theft Secrets: Ok. Awesome and obviously experiencing some explosive growth. What kind of customer base do you serve?
TrustedID: You know, we don't talk about the numbers directly, other than to say we've now helped hundreds of thousands of customers to protect their identities.
Identity Theft Secrets: Anything...we'll keep this kind of short. I know you probably have a bunch of things to run to and different projects to work on. I really appreciate you taking a few minutes with us today. Do you have anything that you'd kind of like to close out with or have people know about TrustedID?
TrustedID: My final word of wisdom to anyone who is listening is that identity protection is something you just need to start thinking about doing. Just the same way that you insure your car, your home or your health, you need to start thinking about protecting and insuring your identity as well. And as you look in the marketplace, as you look for solutions that either you going to do yourself or you're going to trust the company to help you with just think about proactivity. Think about what we were discussing earlier around finding ways to "lock" that door rather than simply finding out about it once it's already happened.
Identity Theft Secrets: Awesome. Well Scott, thank you very much for taking a few minutes. Obviously if people have questions, we can have you back in the future. I'm sure that they will have questions about TrustedID and what you're doing.
So thank you very much for taking a few minutes today.
TrustedID: My pleasure Jonathan.
