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Sunday, Jul 14, 2024

Dentity Seeks to Disrupt ID Authentification

Deep-fake technology, data hacking, and the rise of artificial intelligence have made it simple for bad actors to create fake identities for nefarious purposes, such as impersonating someone on a job interview, applying for a bank account, or even ordering an alcoholic beverage illegally.

Dentity, a Santa Monica-based identity credentials platform, is looking to seize this issue as an opportunity. The company recently partnered with Woodland Hills-based Consumer Attorney Marketing Group, an advertising agency for the legal industry, to help the law firms and lawyers find better ways to authenticate clients when initiating cases. Dentity’s technology creates digitalized ID credentials that are intended to let businesses better verify job applicants and customers, and give consumers more control and power over the distribution of their personal data.

“(We’re) leveraging the power of the blockchain, and giving consumers control over their identity information,” Dentity founder and Chief Executive Jeffrey Schwartz said. “That’s proven to be really an incredibly useful tool for consumers … this idea that you verify your identity once, and then you can use it everywhere.”

Individual users provide Dentity with their ID information, which the company authenticates. It then creates a verifiable credential token that the individual can use as a one-hub wallet for ID purposes. These tokens can be used to verify social media accounts or ascertain the identity of a bank-account applicant. Dentity’s technology could even be used by individuals to confirm the identity of a prospective first date.

In its partnership with the Consumer Attorney Marketing Group, Dentity created a product called CAMG Verify, a self-service portal that gives law firms the ability to quickly and accurately authenticate client’s information when onboarding them to begin a case. It’s available to legal professionals worldwide, though the attorney marketing group’s clients are charged a lower rate per verification.

“There’s zero identity safeguards in the legal industry,” Schwartz said. “All of this mass tort business is coming through digital onboarding, right, and it’s self-attested identity. And the reality is, that just doesn’t work anymore.”

Hard to do

Steve Nober, founder and chief executive of CAMG, said that corroborating identities becomes difficult during large mass torts cases, in which there could be more than 100,000 plaintiffs. Nober added that there isn’t a consistent or reliable standard for how new legal clients should prove their identities, which can become a big problem when law firms are not actually meeting these individuals in person. Some cases require clients to procure notarized proof, while others may simply ask for a photo ID or signature. During mass tort cases, nefarious individuals may fraudulently sign up as plaintiffs to get a check if the case is successful.

“A big part of our business is to help originate those cases, find victims that are all over the country, understand what the criteria is that would have them qualify for a plaintiff firm to take on the case,” Nober said. “(It hit me) that nowhere along the way is there … a process to identify these people are who they say they are.”

While fraud isn’t rampant, he stressed, the legal industry is perhaps not as advanced as some other industries regarding identity-certification protocols.

“A fast, easy, low-cost way to just make sure these people are who they say they are is needed,” Nober said. “For us, this was right in our sweet spot. It would make sense for the law firms that know us that we’d be delivering a portal like this, where we’re making it very easy and cost-effective to do an ID verify.”

Dentity had a February seed funding round led by Blockchange Ventures and AARP. AARP was specifically interested in its technology for its potential to reduce the occurrence of elder fraud by allowing people vulnerable to scams to better verify the identity of caregivers or service providers. Schwartz said that the elderly are often more trusting of strangers and can be less experienced with technology, making them easier targets for scammers.

Competitors

Other companies that offer digital ID credentials include Plaid and Veriff. While verifiable credentials have a wealth of potential uses, such as opening a bank account or signing a contract, there has not yet been a mass movement to adopt them and they are not considered a legal form of ID in most states.

Schwartz said that one major flaw with trusting self-attested identification is the vast amount of identity theft. According to Javelin Strategy & Research, identity fraud impacted 42 million U.S. consumers in 2021. Verifiable credential tokens also let consumers avoid submitting sensitive identity data across different websites and gives them control over how long personal information remains accessible.

Barath Raghavan is a professor of computer science at USC Viterbi School of Engineering as well as the co-founder of Invisv, a computer and network privacy company. He said that giving users control over their online IDs and the way third parties can access them is valuable to protecting user privacy while also enabling the security of online services.

“Verifiable credentials in general are a good way to avoid presenting one’s entire ID information to a third party while still allowing that third party to verify key pieces of the ID,” Raghavan said.

Other partners

Dentity also announced a partnership in March with venue and festival collective Ad.Ventures. It kicked off at this year’s SXSW festival and allowed attendees to use Dentity credential tokens when purchasing alcoholic beverages; the result was shortened lines and record alcohol sales, along with a decrease in the use of fake IDs.

Schwartz said that Dentity issued 77,000 credentials in a single week at SXSW. It will be partnering with several new event venues in June, including one “major” venue in L.A. that Schwartz declined to name. He said that with these partnerships, venues that accept virtual credentials can greatly improve the convenience and experience of a customer’s time at an event and can streamline their own operations.

Verifiable credential tokens are used in other instances to provide proof of a social media presence or of an online interaction with an individual or marketing campaign. On the event side, these credentials can be attached to a festival ticket to prove attendance.

“When you have a ticket sitting in your Apple wallet, you walk in and scan the ticket, and the ticket dies,” Schwartz said. “With a Web3 credential, that stays in your Apple Wallet and you can use it to go do things in the city or unlock offers online.”

Schwartz added that Dentity doesn’t charge individuals anything to create and utilize a credential token. With verifiable credentials, the holder will take their token to a company or entity that is requesting proof of ID. That company or entity will then pay a small fee to confirm the token’s veracity and authenticity with the issuer of the credential: in this case, that’s Dentity. This process saves companies money because they have to confirm the credibility of the Dentity ID only, rather than go through a full ID check during onboarding.

“This new identity model gives enormous power to a consumer,” Schwartz said. “It’s more private, it’s more secure, more privacy-respecting … it’s a better form of identity, and it prevents this constant repetitive process that we always have to go through of giving more of our personal information to more websites.”

Hannah Madans Welk
Hannah Madans Welk
Hannah Madans Welk is a managing editor at the Los Angeles Business Journal and the San Fernando Valley Business Journal. She previously covered real estate for the Los Angeles Business Journal. She has done work with publications including The Orange County Register, The Real Deal and doityourself.com.

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