South African-born Silicon Valley entrepreneur Vinny Lingham wants to curb identity theft with his latest venture, called Civic.
Lingham shot to Silicon Valley fame when he sold his virtual gift card service Gyft to First Data for more than US$50m in 2014.
Prior to Gyft, Lingham also served as founder and CEO of website builder service Yola and digital marketing solutions firm Clicks2Customers.
But now the serial entrepreneur — who was in Johannesburg this week speaking at the Bitcoin Africa Conference and other events — wants to disrupt the online security space with the new identity protection start-up.
Civic is expected to be launched during 2016 and the startup earlier this year closed a $2,8mm round of seed funding.
Lingham said that hackers can easily steal people’s identities and that the cybersecurity industry has built big businesses out of scaring people.
“People are really paranoid about this. So, a whole industry has been built out of fear-mongering people,” Lingham said.
“The whole way these [cybersecurity]companies have gone to market is to scare you into paying them to help you and giving you a solution to identity theft and fraud. But to be honest the solutions that they offer don’t work,” he said.
Lingham said that typically a victim of identity fraud may not know when fake accounts are taken out in their names.
Subsequently, Lingham said Civic plans to notify customers via mobile when an account — such as a telephone contract — is applied for with the customer’s identity number.
“With Civic, that provider would connect with us — notify us that there’s an account opened up in your name, [and]if you were one of our users, it would ping you on your phone and you’d be able to approve if you’re opening an account,” Lingham said.
“So, we don’t charge consumers; we charge businesses for the service,” Lingham said.
Lingham explained that businesses typically lose money if somebody opens up a fake account and rings up a bill.
“We help the merchants reduce their fraud costs,” Lingham explained.
“They (businesses) lose money. So, if somebody opens up a fake account, not under your name and rings up a Telkom bill and it wasn’t you — then it wasn’t you. They then have to cancel the account; they’re out of pocket then on the fees on phone line numbers, etc,” Lingham said.
Lingham was tight-lipped about when Civic would be launched exactly, but the start-up’s website says it expects to start operations during the northern hemisphere spring (South Africa’s autumn).
Identity theft, fraud
Civic as a service may resonate with South Africans amid growing incidents of identity theft in the country.
ID theft contributed to the loss of R1bn from local companies in 2014 alone, according to local document destruction company Cleardata.
Earlier this week, news of a Sim-swap scam that pilfers customers of hundreds of thousands of rands emerged.
The scam allegedly involves insiders at First National Bank and MTN putting banking customers’ phones on the “blink” to assist fraudsters with obtaining key details such as online banking one-time Pins.
Private consulting forensic scientist David Klatzow alleged there was inside job at MTN and FNB and he claimed he knows of dozens of victims.