By Arming Consumers, a Startup Hopes to Cut Down on ID Fraud

In a sign of how the problem of identity fraud is spawning new businesses, a La Jolla, Calif.-based startup announced on Tuesday a free service allowing consumers to determine which pieces of junk mail they want to stop receiving. Once consumers use ProQuo Inc.'s Web site to indicate their preferences?which may include a request to be removed from all mailing lists?the company follows up with the list brokers to make sure the request has been honored, says Steven Gal, chief executive of ProQuo. On the site, consumers supply a name, mailing address, and e-mail address to enroll. The site present in a so-called dashboard with icons representing mailers. Consumers can click on the icons to stop receiving mail. For some of the marketers, a written request or redirect to another site is necessary. The site allows consumers to automatically print out necessary request forms. The company says the service should combat identity fraud by cutting down on the amount of data stored by list marketers and the volume of mail sent to mailboxes. ID thieves often get important information by swiping credit card solicitations and other junk mail from consumer mailboxes, while hackers have been able to break into marketers' files or buy data by misrepresenting themselves. Gal says ProQuo is looking into adding other channels, including e-mail, to the service. “We started with junk mail because very few consumers are happy with the junk mail they receive,” he says. As many as 9 million U.S. consumers are victimized each year by identity thieves, according to the to the Federal Trade Commission. Although the ProQuo service reduces the risk of ID fraud, it doesn't eliminate it. For example, the company doesn't have links with all list marketers. “Today, consumers have no control” over their personal data, says Gal. “This is meaningful control, not complete control. There's no way to control everything.” Gal says, however, that ProQuo will offer to contact list brokers even if they aren't on the service's dashboard. Though the service is free to consumers, ProQuo will sell consumer data to certain marketers with the consumer's consent, says Gal, a former executive with ID Analytics Inc. and HNC Software Inc., a vendor of antifraud software now part of Fair, Isaac Corp. This information should be especially valuable to marketers, Gal says, since it indicates a willingness by the consumer to receive solicitations. Though the ProQuo service may put a dent in what Gal calls a $10 billion business in selling consumer data, “there's still quite a lot of revenue to be made [in direct marketing],” he says. “Marketers would pay us for delivering those offers. For marketers, this is a more valuable consumer.”