A Web start-up hopes to give consumers an easier way to protect themselves from identity theft, but the company may get the cold shoulder from credit-reporting agencies.
Ahmad’s new business hopes to fight identity theft
By Brad Stone
Updated: 8:19 a.m. ET March 15, 2006
March 15, 2006 - Omar Ahmad never shies from a fight. He was a vice president at Napster back when the company was staging a bold frontal assault on the music industry. After the September 11 attacks, the Florida-born pilot, a Muslim, was questioned by the FBI, and he shares his anger and confusion over that experience.
But now the brazen, outspoken entrepreneur has a new target: the three credit-reporting agencies, TransUnion, Equifax and Experian. The giant financial firms maintain files on the credit health of more than 150 million Americans. Retailers go to them when customers open up new lines of credit, and consumers contact them to check on their own credit histories—and in case of ID theft, to put fraud alerts or freezes besides their names, to make it more difficult for criminals to open up new bogus accounts.
But if you ask anyone who has dealt with the credit-reporting agencies for an opinion on their sensitivity to consumer concerns, you likely won’t get a very polite answer. As an ID theft victim myself, I’m painfully familiar with the usual complaints. The companies are notoriously unresponsive, shuffling callers into voice-mail hell and corresponding with incomprehensibly bureaucratic letters. So it’s no surprise that Ahmad reserves some of his characteristic vitriol for the three agencies: “Tell me why execs at the credit-reporting agencies are not taken out like Enron execs in leg irons,” he said over lunch last month in Silicon Valley.
He’s not really serious, just making a point about his new mission—to mitigate the horrors faced by Americans trying to wrestle back control over their own credit. One of the toughest challenges for ID theft victims is trying to prevent the crime from happening all over again. But freezing your credit (a way of requiring that merchants and banks seek your verbal permission to open new credit in your name) is an arduous process involving sending registered mail to each of the three agencies. Currently 12 states have different credit freeze laws on the book, and each law is, naturally, a little bit different. Congress is considering a federal law that would impose a uniform right for all Americans to a credit freeze; a half dozen committees in the House and Senate are now considering multiple ID theft bills, and wrangling could continue into next year.
Ahmad's new Silicon Valley company, TrustedID, wants to act as a single "on-off switch" for consumers, allowing them to freeze their accounts with all three credit bureaus at once, from the Web. The company’s Web site, TrustedID.com, opened this week and will serve as that switch. After a 30-day free trial, customers will pay $8 a month and give power of attorney to the company, which will handle all the paperwork. That sounds expensive, but keep in mind that millions of Americans already sign up for costly credit-monitoring services that watch for suspicious activity. Placing a freeze on your account is more proactive, and probably more effective.
Over the long term, Ahmad and his partner, financial industry veteran Scott Mitic, hope to convince the three credit-reporting agencies to make the process electronic, which will drive down the cost. But for now, the business "is as ugly as you can possibly imagine," Ahmad says. TrustedID employees are shuttling back and forth to the post office, while the credit agencies are swamping the start-up with letters questioning its legal status. The company has raised $5 million in seed funding from venture capital firm Draper Fisher Jurvetson, which also backed Internet telephone start-up Skype.
Mitic and Ahmad say they are spending much of their time visiting the credit agencies and trying to solicit cooperation—with mixed results so far. “I would rather deal with Tony Soprano,” Ahmad says of the companies. “At least you would have a nice Italian meal and get something done.”
I got a sense of the challenge facing TrustedID after trying to elicit comment from the reporting agencies for this story. The companies themselves referred me to their industry organization, the Consumer Data Industry Association. Its spokesman, Norm Magnuson, left me a message saying the group was only now becoming familiar with TrustedID and to his knowledge, “We don’t have any problem with it.” Then he didn’t return several subsequent messages requesting further comment.
It’s not surprising that the credit-reporting agencies might be dragging their feet. They are not legally required to honor consumer credit freeze requests in 38 states. And the three companies have woken up to the opportunities of selling services to consumers, and probably want to offer their own credit freeze option directly to consumers—for a fee. Of course, it benefits consumers to be able to go to a single source like TrustedID, who can manage a credit freeze with all three bureaus.
But to make that happen, Ahmad and TrustedID will have to convince TransUnion, Experian and Equifax to cooperate. TrustedID is already exploring alternative ways to force their hand. It has hired a lobbyist in Washington to push for a federal credit freeze bill and to press for legal protection for third-party players. The company can also consider litigation, and has talked to former FTC commissioner Christine Varney about representing it.
Sounds like David picking a fight with Goliath. For Omar Ahmad, that’s right up his alley.
© 2006 Newsweek, Inc.
You can post general comments and questions here. We also strongly encourage you to read the folder topics below and read the informational postings in each folder. You are also encouraged to post questions in the other folders as well. Do not be afraid to post questions or information. There are no "stupid" questions and topic-related information is always welcome. Do not spam our site as we will remove it and block your IP, email address and possibly pursue legal action against you.
Postby Guest » Thu Mar 16, 2006 4:32 am
- General Discussions, Forum Registration, and ID Theft and Credit-Related News Stories
- General Discussion
- News Stories on Identity Theft, Personal Data Thefts and Credit Reporting Abuses
- Current Cases
- Lawyer Jokes
- FCRA Statute and Defined Terms Under the FCRA
- FCRA Statute And Amendments: 15 U.S.C. 1681, et. seq.
- What is a Consumer [Credit] Reporting Agency?
- What is a Consumer [Credit] Report?
- Resellers: Who are They? What Do They Do? Are They Liable Under the FCRA?
- Investigative Consumer [Credit] Reports
- Who is a Furnisher?
- How to Get Your Credit Reports and How and Who to Write Your Dispute Letters to
- How To Get Your Credit Reports
- Dispute Letters
- Do You Have To Pay For Your Credit Report?
- FCRA Private Rights of Action and Duties Imposed by the FCRA
- Impermissible Access: 15 U.S.C. 1681b[f] and 1681q
- Front End Duties of the Credit Reporting Agencies: 15 U.S.C. 1681e(b)
- Back End Duties of the CRAs: 1681i[a]:
- Credit Bureau's Duty to Provide Consumer Documentation to Furnisher: 1681i[a][B]
- Duty to Add a Consumer's Dispute Statement in Association with a Specific Account and In Connection with the Credit File/Report: 15 U.S.C. 1681i[c]
- Furnisher FCRA Liability: 15 U.S.C. 1681s-2
- Failing to Mark Contested Accounts As Disputed: 15 U.S.C. 1681s-2[a]
- Obsolescence: When Must the Credit Reportings Come Off of the Credit Report: 15 U.S.C. 1681c
- Duty to Notate Disputed Accounts As Such: 15 U.S.C. 1681c[f]
- Adverse Action Notice Rules: 15 U.S.C. 1681m and ECOA
- Credit Solicitations Are Required to be Clear and Conspicuous: 1681m[d]
- Potential Exposure For Sanctions Due to Filing Bad Faith FCRA Cases: 15 U.S.C. 1681n[c], 28 U.S.C. 1927, and Fed.R.Civ.Proc. 11
- Credit Repair Organizations Act [CROA]
- 1681g: Credit Bureaus' Duties to Provide Reports/Disclosures and to Add 100 Word Statements of the Consumer
- Affiliate Sharing Problems and Violations, 15 U.S.C. 1681s-3
- Common Credit Report Errors and Agency Misconduct
- Credit Errors
- Theft of Identity
- Mixed File Cases
- Re-Aging: Debt Collector's Efforts to Revive Obsolete Reportings
- Reinsertion of Previously Deleted Data: How and When Can It Happen?
- VIP Databases and Offline Status
- Deceased Reporting Cases
- Causation: The Crucial Link Between Breach of a Duty and Damages
- Causation to Damage [Proving Your Damages Are Related to and Caused by the Defendants
- Types of Damages, Remedies, and Awards Under the FCRA and Related State Law Claims
- Damages Under FCRA
- Punitive Damages: 15 U.S.C. 1681n
- Injunctive Relief: FCRA and State Law
- Attorneys' Fees, Litigation Expenses and Costs:
- Declaratory Relief Under the FCRA
- What is Your Potential Case Worth? Other Case Verdicts, etc.
- FCRA Jury and Bench Trial Verdicts
- Other Federal Laws Related to Credit Reporting, Data Privacy, Billing Errors and ID Theft
- FDCPA Statute And Amendments: 15 U.S.C. 1692, et. seq.
- Fair Credit Billing Act, 15 U.S.C. 1666, et. seq.
- Identity Theft and Assumption Deterrence Act of 1998, 18 U.S.C. §1028
- Home Affordable Modification Program (“HAMP”) and Home Affordable Foreclosure Alternatives Program (“HAFA”)
- State Law Claims Related to Credit Reporting, Billing Errors, Privacy Breaches and ID Theft
- Invasion of Privacy: State Law
- Defamation: State Law
- Interference With Prospective Credit: State Law
- Interference With Marital/Family Relations: State Law
- Infliction of Emotional Distress/Mental Anguish: State Law
- Data Breach Claims and Issues
- Unfair and Deceptive Trade Practices Claims: State Law
- Jurisdiction, Venue, Removal to Federal Court, Remand to State Court, and Other Pre-Trial Jurisdicti
- Removal of FCRA Cases From State Court To Federal Court
- Personal Jurisdiction and Venue in Credit Reporting Cases
- FCRA Litigation Strategies and Procedural Issues and Law
- Settlements, Releases, Prevailing Party Status, and Other Things You Need to Know If You Resolve Your Case Before Judgment
- Offers of Judgment In FCRA Litigation
- Secret Documents, Product Information and Testimony
- Choicepoint Secret Documents:
- Equifax/CSC and Affiliates Secret Documents:
- Experian Secret Documents
- Innovis Secret Documents:
- Trans Union Secret Documents
- Furnisher and Public Records Suppliers Secret Documents
- Respondeat Superior, Vicarious Liability, and Whether Others Are Liable
- Liability For Employee's FCRA Violations? Liability For FCRA Violations by Third Parties?
- FCRA Preemption, Immunity, and Qualified Immunity
- FCRA Preemption: 15 U.S.C. 1681t[b][F] and Related Discussions
- FCRA Qualified Immunity: 15 U.S.C. 1681h[e] and Related Discussions
- States/Govermental Immunity From FCRA Claims?
- Jury Voir Dire, Instructions, Verdict Forms, etc.
- Jury Instructions and Jury Verdict Forms
- Jury Questionnaires, Voir Dire, Jury Selection and Jury Bias
- Credit Card Issues
- Credit Card Liabilities
- Do You Have a Right to Bring Claims and How Long Do You Have?
- Statute Of Limitation: 15 U.S.C. 1681p
- Standing to Sue
- Credit Scores, Adverse Action Codes, and Other Report Codes
- Credit Scores, Adverse Action Codes, Risk Factors, Denial Codes and Other Scores and Codes Supplied by the Credit Reporting Agencies
- The Mechanics of Credit Reporting
- Public Records Reportings [Non-Bankruptcy]
- Bankruptcy Reporting
- Student Loan Credit Reporting
- Metro Tape [I and II]: Standardized Credit Reporting Formats Used by the Credit Industry
- Defenses Asserted by Credit Reporting Defendants
- What Law Applies? Problems Barring Use of the Court and Law
- Arbitration, Forum Selection, Choice of Law, Choice of Venue and Other Adhesionary Clauses
- Conflicts of Laws Issues in FCRA and Related State Law Issues
- Standing and Statutes of Limitations
- Statute Of Limitation: 15 U.S.C. 1681p
- FCRA Legal Forms [Suits, Discovery, etc.]
- Discovery: Interrogatories, Requests For Production of Documents, Requests to Inspect, Requests For Admissions, Deposition Notices, Subpoenas, Deposit
- FCRA Sample Pleadings: Complaints, Motions, Oppositions and Other Standard Lawsuit Filings
- Defenses Frequently Asserted by Defendants to Consumer's Actions
- FCRA Class Actions and Class Issues
- FCRA Class Actions
- Special Evidentiary Issues: What is Evidence?
- Evidentiary Issues in FCRA Cases
- Expert Witnesses, Special Issues and Daubert and Related Challenges
- Appellate Issues, Rules, Law, Etc.
- Defenses Asserted by Industry and Abuse Stories
- Defense Counsel Abuses and War Stories
- Law Outlines: Various Topics
Who is online
Users browsing this forum: No registered users and 7 guests