On the internet it is easy to pretend to be somebody else. Don’t like your name, adopt a new one. Don’t like the way you look, Photoshop your picture. Think you are too young or too old, select a new age. How is anybody going to find out anyway? As the now classic cartoon goes: On the Internet, nobody knows you're a dog.

With the growing popularity of online dating, more and more people are asking: how do I know you are who you say you are? Also with the popularity of online peer-to-peer transactions, like the ones at Craigslist or eBay, it is more important then ever to establish that both parties are reliable. But how does one establish trust in an environment where it is easy to pretend? One way to do it is to share personal information, that can help the other party establish that you are indeed who you say you are. The problem with such an approach is that the information you give may be abused.

The Solution: Identity Verification Services

This problem has spawned a number of identity verification services. These services provide a verification-chain framework to both parties, while protecting sensitive information. These services typically work as follows:

• Users sign up for a new account on a dating site and are prompted to click through to the site of an identity verifier.
• Users create profiles with details such as their name, age, address, and occupation etc.
• Verification services electronically check data in public-record databases to verify assertions and prompt users to answer other challenges based on public records.
• If users pass these challenges, they are granted a verified status.

These services provide value by acting as a mediator in an identity transaction. They create trust by certifying that the user is indeed the person he/she claims to be, without disclosing sensitive information about the user to the other party.

There are a number of players in this space. The main ones are Trufina, Opinity and Idology. Over the course of last year most of these services have announced new partnerships with popular dating sites, and some eCommerce and social networking sites.

Trufina joined up with dating sites HonestyFirst.com and Loveaccess.com.

Opinity Inc. announced partnerships with Social-networking site GoingOn.com, Classified site Edgeio.com and Technology news site CNET.com.

IDology Inc. announced agreements with Michigan State Liquor Control Commission, Platform Shoes Forum (a national nonprofit that runs Zoeys Room - for age verifications at the point of sign-up, to help shield their members from online predators) and WineWeb (to perform electronic age verification on direct wine shipments at the point of sale, on a State by State basis).

A couple of other services in the space are RapLeaf and iKarma. These services rely on transaction history (RapLeaf) or explicit recommendation and testimonials (iKarma) to evaluate the reliability and trustworthiness of an individual. All of these services provide tight integration at the point of transaction.

Issues

While these companies provide a valuable service, their penetration outside the online dating space seems to be somewhat limited. Let’s look at the potential issues with such services.

One of the main issues is that identity validation services rely on public records. These services typically ask users to provide some personal information, based on which they access public records available for that person. These services then challenge the users to answer questions, based on the information in these public records. If the user answers these questions correctly (i.e. the answers match the information available in public records), the user is considered verified.

All of the public records are available online for everybody to search and see. Check out Intelius and do a search on your name, to access a number of these public records (you will need to pay to download all your records, but search and superficial results are free... and beware, you might find information about yourself that you did not think was public!). Now, if somebody wanted to pretend to be another person, wouldn’t access to all these public records provide enough information to answer the challenge questions correctly? How can we really know that the person is indeed authentic based on such a validation?

Given that such validations cannot be 100% reliable, users can rely on the signaling associated with creating a validated profile. A validated profile can signal to other users that this user is validated and so takes his/her identity seriously. On the other hand, it could also signal that the user is trying hard to come across as authentic! In any case, one way to provide the best signaling is for a site to mandate a verified identity as a part of their terms of service - although this extra effort will surely cause some users to shun the service.

Conclusion

The ability to establish the identity of a person on the internet is absolutely crucial in a number of social and financial interactions. There are quite a few companies trying to provide services, to establish user identity and thereby generate trust in transactions. While these services fill an important void in order to facilitate online transactions, there is still a lot of room for improvement.