Battling Identity Theft
Innovative solutions have Northfield's ID Insight at the top of the industry
NORTHFIELD, MN (December 1, 2008) — Since 2002, Adam Elliott's Northfield company has been a pioneer in putting an end to identity fraud by employing one simple tactic: red flag address changes sent to financial institutions and creditors.
"We realized the reason why identity theft was growing 30 percent a year was because banks were not screening address changes," said Elliott, a 1988 graduate of St. Olaf College. "Nor were they screening address mismatches."
With that knowledge, Elliott and his staff at ID Insight have grown to become one of the top companies in battling identity fraud. With plenty of room to expand, their story is a work in progress.
"Identify fraud is a continuous cycle," said Elliott from his office overlooking downtown Northfield. "When you shut down one fraud, they don't go out and get day jobs. They come up with another way. We are always developing better solutions because of that."
The beginning
While stories of identity theft were not front-page news in 2002, the 30 percent rise year after year has given the crime more weight in 2007. An alarming 8.4 million victims felt the sting of this crime last year, at a cost of nearly $50 billion. The year before, 66 percent of all account theft takeover involved change of address.
"Now there is a big focus on identity theft,” Elliott said.
Legislation drafted in 2003 called the Fair and Accurate Credit Transactions Act of 2003 (FACT Act) has helped slow the double-digit rise. While the government gave financial institutions and creditors all around the U.S. five years to be in compliance, the industry has been slow to move.
On November 1, the date when all financial institutions were to be compliant, only a third met the criteria.
"There definitely has been a delay in compliance," said Lee Runzheimer, ID Insight's Chief Financial Officer. "The government has indicated that there will be no leniency. It's something these financial institutions must do."
Right place, right time
As banks were starting to talk about account takeover fraud, Elliott and his crew realized there was no commercial application to identify it. Analytics played a big role in developing solutions.
"Suddenly you are asking 'how do we get at this?'" Elliott said. "It was our belief that the way you get at this is you look at those address changes and discrepancies in a new account environment, and in doing so you analyze everything you know about the two addresses in question."
Elliott knew that nobody else in the industry was talking about this, so his first step in 2003 was to apply for a hold patent on software that would later be called "Safe2Change."
"We were way ahead of the market," Elliott said. "When we would go talk to Citibank, Wells Fargo, Chase and others, it was like they got it and understood it, but to get integrated into these banks was like pulling teeth."
Elliott and his team knew that the FACT Act was always lurking out there and that when the legislation was pushed forward, ID Insight would be there to offer solutions. What it boiled down to was that ID Insight had built a solution for identity theft, pioneered it, patented it, and now every bank, auto lender, finance company and creditor has to adhere to it.
"We didn't know this would happen," Elliott said. "We saw a gap and we created a solution. In 2003, we didn't know what the FACT Act was. After looking at the legislation, I almost fell off of my chair."
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Media Contacts:
- Brian Bellmont for ID Insight, (952) 233-0428,
