TrustedID launched their first product, IDFreeze yesterday (and announced funding by Draper Fisher Jurveston) to help protect consumers from identity theft. I met with co-founder Scott Mitic today about his company.
Identity theft is a really big and really expensive problem. In the U.S. alone, ten million people per year fall victim to identity thieves – and sometimes it takes years to track down what’s happened, shut down fake credit accounts in victims’ names and restore their credit and name to good standing. Shredding mail and other personal documents is not enough to protect yourself, either. Last year, over 50 million consumer data records were lost by corporations. The FTC estimates that identity theft costs our economy about $50 billion per year. For more information on identity theft, see here.
And things aren’t getting better. Twelve states have enacted legislation that allows consumers to lock down credit – meaning no third party can request to view your credit information unless and until you unblock your credit report for them. A whole group of companies, including credit bureaus, auto dealers and retailers, are opposed to this kind of legislation because it makes their job – selling your credit information and/or opening new credit accounts for you – harder. To fight this state-level legislation, they are fighting hard at the federal level to enact new legislation forbidding states to regulate this area…and it looks like they might suceed.
This is where TrustedID comes in. First, they are fighting the federal legislation and trying to expand state level consumer protection laws. And second their new product, IDFreeze, will help consumers protect their credit.
The product works in different way depending on where you live. If you are in one of the twelve states that allows consumers to freeze their credit report, they will handle this for you (there are lots of fees and paperwork involved in getting this done – more hurdles that the credit bureaus have put in place to discourage consumers from doing this). If you are in another state, they will put a flag on your credit report that requires companies issuing you credit to contact you separately and verify that you intend to open a credit account. Either way, your level of protection will increase dramatically.
And if there is a problem with your account in the future, TrustedID will work to get your credit score cleaned up on your behalf.
The costs is $8 per month. I recommend everyone in the U.S. strongly consider using this service.
UPDATE: 3/14/06 – The harshness of the comments below rivals what I saw on a post about Tello that I wrote in January. I took a stab at refining and explaining my position (link is here), and I hope that this helps explain why I like this company so much. I apologize to anyone who thinks that me showing this level of enthusiam for a company means that I am being paid off somehow – that isn’t true for this post or any other that I’ve written or will write in the future. I also note that, as usual, the worst comments are anonymous. I continue to strongly recomment that people take a look at this service. I will certainly be using it to protect my identity.