Congressional Committees Say ID.me Provided Inaccurate Info About Fraud

While apparently attempting to promote the need for its identity verification services, facial recognition company ID.me overstated the amount of fraud around pandemic-related federal funds and understated the delays caused by its processing of applications.

Those are among the findings of two Congressional committees that looked into the state and federal contractor after reports of long wait times and concerns about privacy and security, according to a press release issued Thursday (Nov. 17) by the Select Committee on the Coronavirus Crisis.

“Congress acted swiftly at the onset of the coronavirus pandemic to ensure that 22 million newly unemployed Americans had unemployment benefits to pay their rent or mortgages and keep food on their tables,” Rep. James E. Clyburn, chairman of the committee, said in the release. “It is deeply disappointing that a company that received tens of millions in taxpayer dollars to help Americans obtain these benefits may have hurt their ability to access that critical relief.”

Americans attempting to provide their identities through ID.me faced “extraordinary” wait times, including, in one state, an average of nine hours, according to the press release.

When the Internal Revenue Service (IRS) was considering a contract for the company for another project, ID.me downplayed the wait times by about half and gained the contract, the release stated.

The company also claimed that fraud accounted for as much as half of all unemployment benefits — a share much larger than that found in state and federal data — and has not told the Congressional committees how it arrived at that figure, per the release.

“I am also deeply concerned about ID.me providing inaccurate information to federal agencies in order to be awarded millions of dollars in contracts,” Rep. Caroline B. Maloney, chairwoman of the Committee on Oversight and Reform, said in the release.

“The Oversight Committee will continue to review the federal government’s use of identity verification services to ensure that Americans’ sensitive information is protected and that everyone can access the government services to which they are entitled,” Maloney said.

In a statement emailed to PYMNTS, ID.me Chief Communications Officer Terry Neal said five states have credited the company with helping to prevent $238 billion in fraud and that more than 80% of users verify their identity in under 10 minutes.

“Those that required a live agent faced long wait times, because of this massive volume, the impact of COVID and the lack of modern technology in state governments,” Neal said in the email.

In a post on LinkedIn, ID.me Founder and CEO Blake Hall said his statement about the fraud being encountered in unemployment payments was meant to make people aware of a crisis that had also been noted by others.

“Any assertion that we made a claim about fraud to advance our business omits the fact that 43 agencies chose ID.me before the statement was ever made,” Hall said.

As PYMNTS reported in February, a non-partisan state advisor recommended that California pause and carefully consider its contract for identity verification with ID.me in the wake of privacy concerns.