How to Combat Identity Theft

You'd think that M2 Benefit Solutions, a St. Louis-based marketer of identity-protection, travel and telehealth services, would be the last company to fall victim to fraud. But a couple of years ago, co-founder Mark McLaren spotted unauthorized charges on his corporate card. He quickly canceled the card and started thinking of ways M2 could augment its identity-theft protection services by adding a level of security that would automatically catch illicit charges that go unnoticed by banks and credit card companies.

The Fix
McLaren turned to BillGuard, a financial security startup based in New York. The company monitors credit and debit transactions by running them through more than 100 security tests each day. The tests look for hidden fees, billing errors, unwanted subscriptions, scams and fraud--items that have been reported to various banks, credit forums and social media networks to which BillGuard has access. If anything looks suspicious, the system shoots an e-mail alert to cardholders. "We're the only company that looks for hidden fees and the gray charges--small charges that most of the time go undetected," says Mary Anne Keegan, BillGuard's chief marketing officer.

Keegan convinced McLaren to sign up for BillGuard's free account, which monitors up to three cards, and to register his personal card to test the service. It immediately identified a recurring (albeit legitimate) charge for a program McLaren had intended to cancel months prior--the type of unwanted charge that is commonly overlooked by both consumers and company accounting departments. Indeed, BillGuard estimates that the average consumer loses more than $300 a year this way.

"There are aspects of monitoring your individual card for individual transactions that go below the radar that banks are not capable of monitoring," McLaren says. "We never had the answer to that, so BillGuard was a natural fit for us--it was the plug to the hole."

The Results
Pleased with his own results, McLaren struck a partnership with BillGuard to integrate the service into his company's suite of identity-theft protection programs, which is offered to individuals through employers, universities and associations (and soon at the enterprise level). "It fit a need for our personal business here, which is great, but it also fit a product and service need that we saw businesses having," he says, adding that the new offering helped M2 sign three large clients, including an international consumer products company and one of the "Big Three automakers."

A Second Opinion
Robert Siciliano, a Boston-based McAfee online security expert and CEO of IDTheftSecurity.com, has used BillGuard for his personal accounts since it launched in 2010. He recommends the service but cautions against complete reliance on it or any outside provider. "You're supposed to look at your statements every single week online and compare them with the paper receipts," Siciliano says. "If you're relying on a third party to look for fraud, then chances are really good that, eventually, there's going to be something you're not going to catch."