By Randy Smith,
Mobile Wallet Media
August 27, 2014
About Mobile Wallet Media
Mobile Wallet Media is a news media, analyst, marketing and consulting firm focused on the future of mobile: payments, marketing, loyalty commerce, security, prepaid, virtual currency, daily deals and the convergence of them all with social and local. The Chief Editor, Randy Smith, was the primary founder, inventor and former CEO of MobilePayUSA, a TechCrunch Disrupt Startup Alley Winner.
One of my favorite lines is from the movie National Treasure. Actor Nicolas Cage is closing in on his family's long sought after Mason's treasure. He reconfigures his 200-year old tobacco pipe as he realizes the key clue "The secret lies with Charlotte" may actually be an actual key to grant access to the treasure room. The pipe was obtained earlier in the movie from a 200-year old ship named "The Charlotte" which was lost at sea in the Antarctica and found covered under the ice and snow. At this moment he states "Can it really be this simple?" Well, truth be told and be bold it could be that simple to provide a much improved identity theft solution.

The credit bureaus and ID theft protection companies give every impression they provide the best possible services to stop identity theft. Their boasts and claims have annoyed me for more than a decade. Why? I've had this Credit File Lock' solution stuck in my head for the greater of 13-15 years, first via the web, then text and in recent years via a mobile app. The solution requires the credit bureaus to hand over control to consumers to enable this 'Credit File Lock' solution.

In the early and mid-2000's I did apply effort to see the solution become reality by meeting with Experian and California and federal legislators. In 2012 I applied some serious effort to draw attention with the launch of MyCreditVault at ETA. And this past couple months I paused in the writing of this article to try and engage directly with LifeLock. I figured maybe I could actually find a partner and someday earn some money by helping to bring it to market. But LifeLock would not engage in such a conversation. They told me to just send off the idea for them to review. I've come to realize the Credit File Lock may not be enacted unless the credit bureaus and service providers have NEED or a CATALYST to do so.

The credit bureaus for some time now have provided 1990's technology access to freeze and unfreeze your credit file. Credit freezes are difficult to set up and tedious to use. Come on now! With the advent of the mobile app we now pay bills, transfer funds and trade stocks in seconds. So what's the hold up? This app should and could have been one of the first hit apps out of the gate or at least by 2011-12? Building this solution appears to be a relative piece of cake for senior developers, so the only remaining answers as to why this solution has not been delivered to market are not good ones.

Could the credit bureaus actually be enabling ID theft to continue, even prosper? They may be suppressing the very innovation that can better prevent ID theft because it could disrupt revenues as credit monitoring and fraud alerts would become 2nd tier, even irrelevant services. But wouldn't this make them the biggest frauds of them all? This makes a corrupt commercial window glass company look like a saint. By not fixing the problem by means of providing a lock and key, real-time solution to prevent ID theft, they continue to enable fraud.

It seems to me that this is but one part of a potential myriad of consumer controlled fraud prevention services that could be sold by banks, credit bureaus and identity theft prevention service providers. Is it not better to prevent fraud from happening in the first place? Add turning on and off your credit or debit card, delaying funds transfers and perhaps the grand daddy of them all applying this model to healthcare fraudulent payments; which some estimate is a hundred billion dollar a year problem.

Could the credit bureaus be held liable for ID theft damages caused by not fixing the problem? They seem to have enabled the fraud to continue. They make it seem as though it’s not really possible to do better than they are already doing. Perhaps there is a legal route that can be the CATALYST for the credit bureaus, to embrace this real-time, mobile, credit freeze solution?

Case law attorneys could provide better cases, but how about the GM case where a 57-cent part being replaced through a recall could have prevented 13 deaths? In regards to ID theft and providing my proposed solution perhaps no deaths are directly attributable, but every year millions of lives are disrupted, sometimes ruined. It can take up to hundreds of hours to repair one’s credit and cost thousands of dollars.

Perhaps a better related case is the California "Kill Switch" Senate Bill 962 which just passed and will become law on January 1, 2015. This requires smart-phone companies to add this safety feature. If paired with the GM ignition switch case regarding civil liability, it may provide a case or foundation for the credit bureaus to be liable for past and future losses suffered by consumers and business' as a direct result of not providing a solution that could have been relatively easily provided.

OK, you say pairing those cases together is a stretch? Well let's hit a bit more on Target. Yes pun intended. MasterCard and Visa face a face Class-Action suit for the Target breach. Of course we know that breach extended to many other major retailers and don’t even get me started as to how EMV would not have prevented such fraud. Does there not seem to be ample proof MC/V could have provided a solution, as highlighted in my two previous articles, that enables consumers to lock and unlock their cards and verify location in relation to the merchant from their mobile phone? If a payments novice like me (10-15 years ago) can come up with like solutions to OnDot Systems, TSYS and recently announced Quisk, then how could Visa and MasterCard not have considered launching the Card Lock app to prevent card fraud? And in the same accord how could Experian, Equifax and Transunion not have considered the Credit File Lock service through web, text and app?

You can be sure I've got other next-gen solutions that may soon disrupt existing payments and consumer fraud prevention solutions or those yet to be launched. I offer my services to companies in the space. Delay and risk being disrupted. Hire me and you'll improve your chance at offering the best innovation, quicker.
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Real-Time, Consumer Controlled, Credit File Issuing is Long Overdue.