Civic's $1 Million Identity Fraud Protection
A new blockchain-based identity platform called Civic wants to be a second-factor authentication for people who want to be insured for digital ID theft protection. The app, which just launched, notifies its users when their social security is used by a Civic affiliate allowing people to make sure the use of this information is legitimate.
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Vinny Lingham’s Civic Creates 2FA Against Social Security Fraud
Civic is a new project created by Vinny Lingham, a South African entrepreneur and the founder of Gyft. In 2014, Gyft was sold for over $50 million and Lingham has since moved on to his new digital identity protection service. Civic insures its customers from identity fraud for up to $1 million per user, free for life. The platform is still in beta but will charge banks and traditional finance institutions a small fee to take part in the second-factor layer of identification.
Lingham told Forbes this week:
The Social Security number system was not built for identifying people uniquely, but as an account for retirement savings. It has now become the de facto means of identity, but the system was never built for what it is used for today.
The startup has backers as well with the Palo Alto company raising $2.75 million back in January. This includes capital from Social Leverage, Block Chain Space, Digital Currency Group, Blockchain Capital, Pantera Capital, Sound Ventures, and more.
Venture capital firms are interested in this company’s system because it lets users know when personal information is used. Civic believes it gives users more control over their identity while at the same time saving financial services significant costs from fraud, which these businesses typically eat. Most banks, credit card services, and financial institutions take on the cost of fraud protection which is passed on to the customers in the end.
According to Javelin Strategy & Research, $16 billion was stolen from 12.7 million identity fraud victims in 2014 and in 2015 the costs have continued to increase. A lot of this is due to the rise of data breaches and social security fraud along with personal information that can be sold on the black market. With Civic’s app, if someone attempts to make a purchase with your credentials and you don’t authorize the transaction, your bank will then block the purchase.
Additionally, Civic has collaborated with TransUnion giving its customers real-time alerts when their credit report is accessed. If any fraudulent activity occurs with the identity of Civic, users will be sent an email or a text to their smartphone.
Civic has also partnered with GoodHire and Onfido, which handles background check verification.The company plans on making more partnerships as the platform scales.Civic’s co-founder Jonathan Smith also adds security to the mix with a background within financial security in the banking industry.
It is a desktop application at the moment but the company says in a month or so, iOS and Android apps will follow.
What do you think about the Civic concept? Let us know in the comments below.
Images courtesy of Pixabay, and Civic’s Website