Victims of identity theft have new source for help
May 9, 2005
BY MICHAEL KRAUSS
Identity theft is a
growing challenge of the technology age, and Garnet Steen, 34,
founder of Chicago-based RelyData, makes lemonade out of technology's
lemons. The Winnipeg native and Accenture and Bain alum just needs
$1.2 million in funding to expand.
sees a $70 million business opportunity. He envisions RelyData
as the H&R Block of identity-theft resolution. A victim of
stolen identify could resolve the problem himself, just as a taxpayer
can prepare his own tax return. But Steen is betting it's easier
to hire an expert who knows the process.
Consider the frustration
factor. Once someone pilfers your identity and sullies your credit,
you need to contact the leading credit bureaus -- Experian, Equifax
and Trans Union -- to report the crime.
"On your first
call to Trans Union, you'll get an automated system," Steen
predicts. "It's going to take you 10 days to actually talk
But Steen has a business
partnership with Trans Union and can start resolving things 15
minutes after he's reviewed an identity theft victim's case.
Steen estimates there
are 4 million victims of identity theft annually. That's the number
of Americans who report the crime to the credit bureaus. It may
be under-reported. A study by the Federal Trade Commission says
9.9 million Americans are victimized annually. Steen adds, "Identity
theft is growing at a rate of 20 to 40 percent per year."
Once identity theft
occurs, the challenge is clearing your name. That takes time,
often while you work.
"It takes 60 hours
to resolve the problem," says Steen, provided you can access
a telephone, fax and the Internet during the day. That's when
the credit bureaus, banks and insurance companies are available.
Steen estimates the
cost in lost productivity and profits from an employee's identity
theft runs to $800 to an employer. He aims to sell his service
to employers as an employee perk for a few bucks a head.
"I think RelyData
is a very interesting play," says Tom Churchwell, managing
partner, ARCH Development Partners, which makes early-stage investments.
Churchwell moderated a recent venture forum held by the Illinois
Technology Development Alliance, where Steen presented.
"We've not seen
anything like RelyData," adds Churchwell, who cautions he
has not done due diligence, nor is he an investor. He says Steen
and RelyData are addressing a major problem of the technology
& U. of C.
Here's more evidence
Chicago-style entrepreneurship is blooming. The University of
Chicago is becoming a launch pad for entrepreneurs.
and CEO Joe Mansueto, who completed a very successful initial
public offering last week, earned his BA and MBA there. On paper,
Mansueto's stake in publicly held Morningstar is worth more than
Another positive sign:
Top faculty are getting active with ventures. U. of C. finance
professor and private equity expert Steve Kaplan serves on Morningstar's
take note. Northern Trust hosts a launch party Tuesday promoting
Springboard Midwest 2005, the venture capital competition supporting
showcased 317 women-led enterprises," says Nancy Sullivan,
director of the Center for Women Entrepreneurs in Technology at
Northwestern University, a co-sponsor and organizer of this year's
effort. "Those portfolio companies raised $3 billion in equity
include Ed Condon, Paradigm Capital; Bob Geras, LaSalle Investments,
and Misty Gruber and Kathleen Swan, Dykema Gossett. Springboard
Midwest 2005 will be held Sept. 28 at Northwestern.
Tech companies aren't
all start-ups. At $152 billion in revenue, GE is a top tech company
with nearly 2,400 workers in the Chicago area. Beth Comstock,
GE chief marketing officer, speaks Thursday at the Business Marketing
Association at the Mid-America Club. She'll explain CEO Jeffrey
Immelt's effort to grow through innovation. GE is a lead sponsor
of WiredNext Fest planned for June at Navy Pier.
Gov. Blagojevich says
more than 63,000 individuals visited the Illinois Business Portal,
www.business.illinois.gov since its February launch. Will a Blagojevich
blog be next?
Krauss is a Chicago-area tech writer and consultant.