A company called MorphoTrust USA plans to use selfies next tax season to help taxpayers avoid the risk of losing their tax refunds to identity thieves.
The Billerica, Mass.-based company has developed a secure online electronic ID, or eID, that leverages the state driver’s license process to help consumers who file their taxes online. MorphoTrust is getting ready to try out the technology in Georgia and North Carolina, where it has agreements in place with the state governments.
“The idea is that taxpayers will be allowed to preregister for the service before tax season begins next January and they will have their protection in place,” said Mark DiFraia, senior director of market development at MorphoTrust USA.
MorphoTrust uses a mobile app that runs on a user’s smartphone. “When someone wants to get their eID issued, what they’ll do with the app is they will be coached through three steps where they scan the back of their driver license to read the code on the back to pull their personal data from the card,” DiFraia explained. “They will be asked to flip that card over and scan the front, where we’re actually using the mobile device to authenticate that driver’s license is in fact a real driver’s license issued by the state. Then lastly they take their selfie, and after giving consent we take the driver’s license information and the selfie. Through our service we bring it all the way back to the state that issued the driver’s license to begin with, and we do a one-to-one match of that selfie to the picture on the driver’s license database. That way we know when we issue you an eID that you are actually the person that appeared at the DMV on the date when your driver’s license was issued.”
The technology can also be used to authenticate people for online purchases. “Taking a step back, the eID is actually a credential that you can use anywhere conceivably on the Internet,” said DiFraia. “It’s an alternative to using a username and password issued by a specific website to access their portal and their content. Instead, what the user would do is they would create their own Internet credential that they could bring with them.”
Instead of going to a website and entering a username and password, users would have the option of clicking on a button that says, “Use your MorphoTrust electronic ID.”
“When you click that button, instead of being presented with the opportunity to put in a login and password, instead you’re going to be presented with a QR code,” said DiFraia. “Using our mobile app, you’re going to scan that QR code to automatically log you into that web portal. So you essentially have an online credential that you can bring with you and use wherever it’s accepted, and it doesn’t require you to remember a user ID and password anymore.”
Anyone with a driver’s license or a state-issued ID in Georgia or North Carolina will be eligible to register for a MorphoTrust electronic ID. “That’s your online credential,” said DiFraia. “You use that to log in the web portal and authenticate yourself to a website. Instead of trying to protect the tax return on its way into the system, what we’re doing is protecting the system from the back. When I’m going to log into, let’s say, Georgia’s tax center, I’m going to opt into this program. What I’m basically asking the Georgia Department of Revenue to do is to reach back out to me whenever they receive a tax return in my name and ask me to authorize the transaction based on me proving who I claim to be.”
DiFraia believes the technology will help prevent identity thieves from submitting fraudulent tax returns. The state revenue authorities will be able to reach out to the actual taxpayer who is entitled to receive a refund and ask for their authorization to process it.
“That will eliminate the opportunity for the fraudster to essentially front-run the taxpayer by filing before them,” said DiFraia.
MorphoTrust will be working with H&R Block in Georgia and North Carolina. Block franchisees will be able to offer the service to their customers.
“We have the partnership with the driver’s license-issuing agencies in both states, which are the Department of Transportation in North Carolina and the Department of Driver Services in Georgia,” said DiFraia. “Then lastly we have H&R Block on the team because they’re going to help us with marketing and outreach to make sure people know the service is available. We’ll have a marketing program across all of the participants to get the word out and encourage people to log in and opt in to the service.”
MorphoTrust’s initial project in North Carolina was enabling people to apply for the FNS (Food and Nutritional Services) benefit online. “Instead of having to appear in person or go through other steps to prove who you are, the act of logging into their website is sufficient,” said DiFraia. “It can be used for anything that is occurring in the online domain where either I’m logging into a site because I want to do something now and I’m navigating actively, or I can use it to authorize a transaction that might happen in the future like we’re doing with tax refund fraud.”
The technology was developed under a grant from the federal government under a program that aims to provide better cybersecurity online. “The program is referred to as NSTIC, which stands for the National Strategy for Trusted Identities in Cyberspace,” said DiFraia. “That’s a White House strategy that is built around trying to make the Internet safer for identities. We’re leveraging those dollars to put our technology to use in these cases to prove how leveraging the principles of NSTIC can be used to make things safer and better for people online.”
MorphoTrust hopes to expand the program to other states once the agreements are in place.