As part of the industry-wide effort to make e-commerce more secure, credit reporting giant Equifax, Inc. has announced plans to positively identify online shoppers through quizzes based on their credit reports.
Company officials say that the process will virtually eliminate manual authentication methods, including the need for consumers to enter an authentication code that arrives by mail. Further, the company claims that the technology will also protect consumer privacy, reduce the threat of identity fraud and reduce fraudulent payment risk for businesses.
Online payment processor CheckFree has signed a multi-year deal to use the process for verifying the identities of its online bill-paying customers.
“With faster authentication, CheckFree can more closely meet expectation levels for immediacy that Internet consumers have come to expect as they try new services, while maintaining the highest level of security and privacy required for authorizing transactions,” said CheckFree president and chief operating officer Peter Sinisgalli.
How It Works
Unlike traditional methods that rely solely on such wallet information as Social Security numbers, driver’s license numbers and addresses to identify users online, the Equifax authentication engine requests both financial and non-financial information that should be known only to the user. The engine compares and analyzes multiple elements in the furnished information with consumer data from Equifax and other consumer and business information.
First, the consumer completes and submits the enrollment form, providing the requested information. The information is encrypted and transmitted electronically to Equifax, protecting the privacy of the consumer at every stage, according to the company. Then, once the information reaches the company, the authentication engine compares the data with consumer data from Equifax and other consumer and business information sources.
Ultimately, the authentication engine displays a multiple-choice questionnaire compiled from information sources, which the consumer answers. If the answers are verified, then the consumer is authenticated. If not, he or she will be instructed to complete the process manually.
Complies with Fair Credit Reporting Act
According to Equifax, the process complies fully with the Fair Credit Reporting Act. The process replaces the manual application, which required consumers to submit their information online but wait several days to receive a PIN number or authentication code through the mail.
By 2002, more than half of U.S. households will have the ability to access three or four bills for viewing and payment online, according to a 1999 Internet Research Group report.