Debix, a young company that helps fight identity theft, has gotten financial banking from a group of investors, including Gideon Yu, a prominent Silicon Valley executive who is now Facebook’s chief financial officer.
Yu’s move is also significant because it comes at a time when his company, Facebook, itself is under considerable scrutiny for the amount of information it provides partner companies about its users.
Yu himself was a victim of identity fraud himself — only noticing the theft after two years when an impersonator launched a spending spree in Reno, using his name and credit card number to make fraudulent purchases. Yu’s story is carried in the New York Times today.
Debix, of Austin, Tex., is just the latest in a number of companies that help fight such fraud with more aggressive measures than those provided by existing credit agencies Equifax, Experian and TransUnion. Debix places automated calls to its customers every time someone opens credit in their name, for an annul fee of $99 a year. Once getting the call, the customers then enter a four digit PIN code to approve the transaction. Launny Steffens, a former vice chairman of Merrill Lynch is also an investor.
Other companies include LifeLock and TrustedID. We covered LifeLock’s problems earlier this year (scroll down), when it emerged that co-founder Robert Maynard, ironically, had a criminal past himself. In a new development, however, it turns out that LifeLock’s venture capital backer, Kleiner Perkins Caufield & Byers knew about Maynard’s past before it backed the company, the NYT reports.
“Not one investor or board member was unaware of the issue,” a partner at Kleiner Perkins, Ted Schlein, said. “LifeLock is executing very well and growing fast.”
TrustedID apparently goes the first of these services. As we reported, it takes the extra measure of actually freezing your credit in certain cases, meaning that no one can take credit it out in your name until you unfreeze your account.
Yu’s investment appears to be motivated more out of personal interest, rather than linked to Facebook’s own challenges on the privacy front — though the NYT article didn’t make the clear. Some consumer groups are asking the federal government to look into Facebook’s ad targeting plans, calling them a violation of privacy. (See Facebook’s Own Van Natta respond to these fears).
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