he payment card industry has numerous data security standards and compliance requirements. There's MasterCard International's Site Data Protection (SDP) program, Visa U.S.A.'s Cardholder Information Security Program (CISP), Visa Canada's Account Information Security (AIS) program, American Express Co.'s Data Security Standard (DSS), and Discover Financial Services' Information Security and Compliance (DISC) program.

Each program is unique, but they all have the same purpose: protecting merchants and their customers. The goal of these programs is to ensure that customer data and the procedures merchants and processors use are as secure as possible to limit security breaches and compromised cardholder data.

While such programs are vital to our industry and making great strides in protecting consumers, merchants and ISOs, there is more to combating fraud. As we know all too well, security breaches have occurred. Unfortunately, as soon as a new protection or security measure is put in place, hackers work feverishly to defeat it.

Therefore, we don't only need to keep data secure, we also need to stop thieves from using the credit card data they do get their hands on. How do we do that? How do we spot a fraudulent purchase and stop it before the transaction is completed? Who can verify a cardholder's identity in an e-commerce environment? Furthermore, who can we trust to use identify verification information responsibly?

Here's the Answer

One answer is IDology Group LLC. The company provides fraud prevention through knowledge-based identity verification. Its mission is to provide age and identity verification services that promote accuracy while also advocating for secure, responsible handling of data.

Data aggregation has become a powerful tool for detecting and preventing questionable or unlawful activity. However, the more data a company uses to verify a consumer's identity, the more responsible it must be. That's why IDology believes it is important to use only what is necessary to verify identity, thus limiting the amount of data at risk.

"Responsible use of information is a key deliverable in reducing the identity theft and fraud crisis," said Raye Croghan, IDology Vice President.

IDology's solutions protect consumer privacy and promote legitimate sales of age-restricted merchandise and services while reducing overhead and expense.

Merchants have put the company's solutions to use within age-restricted industries, such as with wine sales on wine.com. Law enforcement agencies and children's advocates have also endorsed IDology.

Partners with 20 years in law enforcement, data aggregation, information security and financial services founded IDology in 2003. Today the company employs more than 20 at its headquarters in Tallahassee, Fla. It also operates regional offices in New York, Texas, California, New Jersey and North Carolina.

Since IDology's founding members came from credit card issuers and acquirers, they have long-established relationships with information management and technology companies. These relationships provide them with access to a broad cross section of information to verify age and identity.

"Most of our competitors are software developers or the data aggregators themselves," Croghan said. "We bring something from each space that others don't.

"Through our proprietary methodology and technology, IDology serves business and government more securely, efficiently and cost effectively than any other alternative. And unlike other solutions, consumer privacy and responsible use of data is our only business," she said.

Identity Verification With Privacy Protection

IDology's flagship product is the patent-pending IDlive solution. It is an age and identity verification platform that bypasses disclosure of sensitive information. "IDlive helps companies implement solutions to increase legitimate revenue opportunities and control costs associated with loss prevention," Croghan said.

IDlive is different from other solutions in that it was designed to insulate consumer data while protecting businesses in consumer-not-present environments. It protects both the merchant and consumer. These days, the value of protecting private information from abuse or misuse cannot be overstated.

"This program has been specifically engineered to protect the privacy of consumer information, a critical issue in this day and age," said IDology Assistant Vice President Sheila Darrow. IDology uses its privately held database tools and its relationship with data aggregators and federal, state and local law enforcement agencies to verify age and identity.

"The resource records we safeguard include information such as driver's license, state issued identification cards, military identification, immigration records, vehicle registrations and professional licenses," Croghan said. When someone enters card information into the IDology Web site, the system performs a massive database search of all records.

Using information from the search, the system creates three questions about that person that only he or she could answer. The questions are personal, but not invasive. They include such queries as "What color was your last car?" or "What was your address before your current address?" If the consumer can't answer the three questions, it is three strikes, you're out. He or she is denied the purchase.

Can I See Some ID Please?

An added benefit of IDology's IDlive product is the ability to verify age and location. This is particularly useful for vendors of age-restricted products and services, such as alcohol or age-restricted merchandise and services.

Verifying age and location helps merchants protect children and themselves. By ensuring that minors are not sold restricted items they protect those minors, but they also protect themselves from any liability that might arise from selling such items to a minor.

WineAmerica, the National Association of American Wineries, recently selected IDlive to develop an age and identity verification affinity program for its members. The program enables the association's 800 members to verify the customer's age via the Web or phone. The wineries simply pay a transaction fee. They are not charged any setup or application fees.

The location verification is also important in the wine industry. Many states have different regulations on consumers ordering wine from an out of state Web site. Verifying consumers' location helps wineries operate within the law while still serving customers.

Try Before You Buy

One thing that makes IDology unique is that its solution is specific and customized while still being turnkey. "The customizations and features are so unique in the industry, they have patents pending," Croghan said. "We are so confident in IDlive, we allow merchants to try it free before committing."

One fan of IDlive is jewelry retailer www.ice.com . "We wanted a solution that is not only consumer friendly but let us know more about a verification and was also cost effective," said Ezzie Scaff, Vice President of ice.com .

Scaff said the company had given up until IDlive launched last year, offering a more comprehensive and flexible product than it had ever encountered and at half the cost of other services.

"Savings start at price points 50% less than competitors," Croghan said. With a transaction fee as low as $0.25, it's hard for many merchants to say no.

A Pre-Made Revenue Opportunity

IDology sells its products and services through ISOs and merchant level salespeople (MLSs). While the recent security breaches and compromised databases are certainly not good news for anyone, ISOs and MLSs can use these situations to demonstrate to merchants the importance of data security.

"With all the media attention to data breaches, it's an ideal time for independent reps to add identity and fraud prevention services to their features and benefits," Croghan said.

More good news: IDology offers life of contract compensation. ISOs and MLSs receive commissions and residuals via the automated clearing house for the life of the account. "It's a pre-made revenue opportunity," she said. "Revenue sharing and residual programs have been designed so ISOs/MLSs can capitalize on the media attention to the identity theft crisis with attractive offerings for every level of participation."

IDology provides ISOs and MLSs product training and support and real time reporting and account management. Nearly any merchant who sells items in a non-face-to-face environment is an ideal IDlive merchant. If an ISO or MLS works with merchants who have an e-commerce base or who sell age-restricted commodities, they would benefit from IDology. Any business interested in fraud prevention will find IDology's products helpful.

Data aggregation is a powerful tool for detecting fraud. But, the data must be used responsibly to reduce the possibility of abuse. IDology understands that risk and its responsibility. "We look at how to use data differently," Croghan said. "IDlive leverages the power of data resources, bypassing over exposure, to verify age and identity responsibly and securely."

ISOs now have an opportunity to turn a negative, the recent security breaches, into a positive: revenue. "ISOs ... will find IDlive is a significant revenue opportunity that increases their value to their merchant portfolio while reducing exposure for the processor," she said.