The Fine Line Between Charity and Self-Promotion

Written by Evan Schuman
September 12th, 2005

The most altruistic gift is an anonymous contribution, in which a giver wants to help but does not want to benefit from the donation.

Sometimes, though, anonymity is not possible, and that’s where things can get dicey.

Last week, for example, a Fort Lauderdale authentication firm announced that it was offering its service free to anyone who wanted to use it to help victims of Hurricane Katrina.

Why would an authentication service help out in flood recovery? A lot of the victims had to flee their homes and they lost identification documents (birth certificates, passports, marriage certificates, Visas, etc.).

They are often in that government Catch-22: to get new copies of their documents, they need to prove that they are who they are, which is difficult to do if their documents have been destroyed.

President Bush has announced a plan to make that easier for flood victims, but how easy it will be isn’t clear, and there’s no indication that policy will be universal.

Let’s say a victim wants their cell phone or credit card company to send them a replacement. They often can’t let them ship it to the address on record because that address might have been destroyed.

When a consumer asks for phones or identification documents sent to an address that is not on file, companies get legitimately nervous and want further proof of identity.

There’s also another problem. Those abandoned houses have tons of identification documents in them.

Whether documents are stolen by looters or found literally floating down the street, identify theft becomes a very real risk. And that makes the cell phone companies and the banks even more suspicious.

Even worse, some bank chains are asking consumers who have lost their checks to pick up new checks at their local branch.

However, a lot of local bank branches have been washed away, along with the million-or-so people who have been displaced.

That Fort Lauderdale company, Verid Inc., made its identity service offer publicly on Friday.

Its system uses a combination of private and public databases and compiles extensive files on consumers. Consumers would be asked questions based on those files.

For example, the question might list five prior addresses and the consumer would have to identify which of those addresses is not associated with their history. Or it might ask the color of a car the consumer used to own.

Of course, that kind of system is only as accurate as the information in the database and recent reports certainly suggest that that data may not be as accurate as desired.

Verid CEO Kevin Watson said his databases are much more accurate than credit card databases alone and cited secret software magic as the reason.

“That’s the crux of our technology. We’re able to run certain algorithms and generate answers that have a high degree of accuracy,” Watson said. “For the most part, we are able to filter out those bad addresses.”

I offered to have them run me through their software so we could verify the accuracy of their results, but Watson declined.

His reason was legitimate, although not very comforting: Projecting the accuracy of his service based on running a single report wouldn’t be fair. That’s true, but if the database is as accurate as he said, you’d think he’d want to show it off a little.

Not that database accuracy isn’t always critical?but it’s especially crucial here.

Envision someone whose house is destroyed and who is then using this service to help accelerate replacement of vital records and this system is telling their bank that they are not who they claim because the database is flawed.

As for the donation, Verid’s offer is simple. It is offering free unlimited use of the database through Dec. 31 to any new customers who use the software to help Katrina victims.

Existing customers who help victims will get charged full price, but the company says it will donate about one-third of that revenue to the Red Cross.

On the one hand, I want to believe that this is an altruistic offer and, for all I know, it might very well be.

But it’s also a good way to get prospective customers to do a free trial, while scoring points for seeming generous.

I hate to be that cynical, but it’s a difficult impulse to resist. The cynicism even hit Gartner analyst Aviva Litan.

“It’s a brilliant marketing move on their part,” she said. “This is much less expensive than advertising their brand.”

Litan, who is familiar with Verid’s service, said some “companies are somehow reluctant because it crosses the (privacy) line a little bit.”

Litan added that Bank of America recently had difficulties with a similar system. A school that the customer needed to identify was called St. Johns. The software labeled the answer as false because it was expecting “St.” to be spelled “Saint.”

In the middle of a massive hurricane relief effort is a bad time to do some database accuracy beta tests. “It’s certainly not a good time,” Litan said.

That all said, motivation should be irrelevant. If free databases help people get back on their feet, it’s a noble gesture.

The question is: Will it help? I guess if someone has just the clothes on their back and needs to get their credit card, rolling the dice on a database is better than giving up.


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