PhoneID: an idea, a product, a patent

Online fraud is often a simple lesson in scale and economics. If fraudsters can make $5 per month spamming someone with a fake account, they can make $10,000 per month if they had 2,000 accounts. Prior to phone verification and PhoneID, fraudsters simply registered for bulk email accounts and mass spammed social networks and online directories. TeleSign clients who implement phone verification will ask users to give a unique phone number with each account. This is a simple task for legitimate users, but a insurmountable road block for fraudsters.

Requiring fraudsters to provide a phone number means that if they wanted to create 10,000 accounts they would need 10,000 unique phone numbers. Not an easy or cheap task. Additionally, fraudsters are weary of providing traceable information.

In 2005 we noticed that higher rates of fraud were associated with certain types of phone numbers — specifically prepaid mobiles phones and non-geographic VOIP phones. Additionally, we recognized that if we could prevent fraudsters from purchasing bulk VOIP numbers we could drive fraud rates even lower. Acknowledging the market need, we set about creating a product that could flag these risky types of phone numbers. Late in 2005 we successfully launched PhoneID. Early results were extremely promising, as we were flagging well in excess of 95% of non-geographic VoIP phone numbers. This means that websites can flag or exclude people from with risky phone types. Fast forward 6 years and the PhoneID product is a linchpin for many of our client's fraud preventions strategies.

Due to PhoneID immediate success, we knew we had a unique and in demand technology. In order to protect our innovation, we filed a patent for PhoneID. A patent grants you “the right to exclude others from making, using, offering for sale, or selling" your patented technology.  After 6 years of patience (the patent office is extremely backlogged), we were granted Patent No. 7,945,034 for our PhoneID technology in May 2011.

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