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ID Fraud Prevention Firm Eyes Mortgage Industry
By Ted Cornwell
Verid, a Sunrise, Fla.-based provider of identify fraud prevention technology, is looking at opportunities to expand its business into the mortgage industry, a company executive told MSN Bulletin last week.
The firm was acquired last week by EMC Corp. and will be integrated into that company's RSA Security division. EMC had previously been selling Verid's identity authentication services through an arrangement between the firms.
Chris Rickborn, COO of Verid, said his company's services can benefit lenders seeking to prevent loan applicant fraud through the use of false identification, as occurs when a borrower claims a different identity in a purchase because the real buyer might not qualify for financing.
He said the company's knowledge-based authentication services are used by creditors and other businesses to weed out fraud from "the unknown consumer who is trying to establish a relationship with a business."
The integration into RSA Security will allow the company to offer a host of products designed to manage fraud risk and identity protection, he said.
The technology developed by Verid allows a creditor to authenticate the identity of a borrower with a few simple questions that can be asked over the phone, he said.
"What we do is typically target remote transactions," he said.
Mr. Rickborn said that the last time he got a mortgage, little more was required of him than his name, Social Security number, date of birth, and address. Increasingly, sophisticated identity thieves have been able to penetrate this information to apply for credit under false identities.
Verid's technology is designed to penetrate a little more deeply to make sure the person is who they say they are. This involves asking a few questions that only the real individual would know, which might include information about previous residences, property ownership and other basic facts that would only be known by the real person. Mr. Rickborn said his company obtains the data from public domain sources as well as from databases that are not widely available to the public.
"The ID thief won't be able to pass our test," he said. Already, the technology is widely used in the credit card, auto lending and financial services industries.
Unlike "shared secret" systems, in which a bank, for instance, might verify the identity of an existing customer by asking for a mother's maiden name or a pet's name, the Verid technology helps clients verify the identity of persons with whom they have no previous relationship, Mr. Rickborn noted.
And he said the system is designed to be as unobtrusive and non-cumbersome as possible for the consumer applying for credit.
"It's a way to really ratchet up security when you are talking to someone over the phone," Mr. Rickborn said.
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