I'd like to bring our next guest in — Bryan Lewis is the CEO of Intellicheck. Bryan, knowing your counterparty in any industry — talk about banking and finance, who you're wiring money to — is important. We talked to Brandon Fried about what's actually going on in air freight. You guys are providing technology to know who the counterparty is and do ID verification at Intellicheck. Tell us a little bit about what you're implementing.
Look, I'll start this conversation off by saying I generally bum people out after they hear me talk, because the ability to steal your identity is amazingly easy — and that's what people do. We've all been hacked, we've all got our information out there. And then the bad guys use that to commit crime — whether it's going into a store and opening a credit card in someone's name, or pretending to be a driver and taking off with the trailer. I think the average loss on that is around $300,000, from what I've read, and cargo theft runs about $35 billion annually. So it's big numbers, and it's easy to do. The cheapest thing is buying your identity; the most expensive thing — about $40 — is buying a driver's license that looks so real most law enforcement officers can't tell it from the real thing. So knowing who the person you're dealing with in any transaction is becoming more and more important. It's all organized crime, and they always look for the soft underbelly — what's the easiest thing we can do right now to make money?
And certainly from what we're seeing from customers coming to us now, a lot of it has to do with trucking and logistics. We've talked a lot on the show about verifying a carrier — knowing who you're working with — but there's a difference between verifying a carrier and verifying the person physically taking possession of your load. Can you talk us through that distinction?
Yeah, it's sort of the same thing. Verifying the carrier is one thing, because you know who they are and they've got some credibility. But the same bad guys can fake the carrier out and then fake you out. So knowing who you're dealing with at the moment you transfer the product is very important, and it has a whole bunch of supply chain implications. We work with automotive companies that are very worried about their suppliers, because if they miss a shipment or two, their chain could shut down — the plant building the cars — and that costs them thousands of dollars a minute. So the first step is making sure you're dealing with a reputable company, but the second step is always making sure you know who you're dealing with at the point of transfer of product.
It's been an evolution — talking to Brandon earlier about how things have changed since September 11th over the last 20 years — but we cover a lot of freight fraud. We have two stories this morning alone involving multiple millions of dollars in various elaborate crimes. Where is this all headed? What emerging threats are you seeing?
I think part of what we're seeing is that AI is making it much easier to create documents that look very, very real. And I'll be honest — most of these fake documents come from China, which is also where we buy most of the plastic used to make real licenses, so they're very accurate. Most people are still relying on visual inspection: the person hands over a license, you look at it, it looks real, here you go — and then the trailer's gone. Technology can change that. We need to make sure the technology is fast and accurate — that's where the world needs to go: moving beyond a person looking at a document and saying 'it looks good' to using technology to say definitively 'it is good.' Technologies like ours are super accurate, and if you lose one load, you've probably just paid for the product for a year. So I look at it as cheap insurance to protect your business.
Talk a little more about how you add stronger identity checks without slowing down the process. You mentioned using technology to keep it quick — can you go into more detail?
Sure. For example, what we do — and what the freight companies using us do — happens on a mobile app. It's simple, and it takes less than 44 milliseconds to scan a license and determine if it's real or not. So many industries we work in care about speed. I'd bet about 80% of the people on this call have gone through our process and never knew it, because it's that fast. The last thing a retailer wants when someone's saving 10% today by opening a new credit card is a line backing up. So speed is really important — that's exactly why freight companies using us love it: scan the driver's license, bang, you've got an answer, real or not. That gives them the confidence to let the load go.
Bryan, is it something to do with the algorithm on the back end? I know you have to keep the formulas somewhat secret since it's an evolving field — does it have to do with how you're scanning the database to verify the photo on the ID is actually state-issued? Is that how it works, or what can you tell us?
I have stacks and stacks of fake IDs that law enforcement agencies and our customers give us. One common misperception is that if a license scans, it's real — that is not true at all. No state, territory, or province in the U.S. or Canada uses the same format; every one is different, and they all have different security features. Some have digital keys you need to know how to unlock; some run checksum-digit programs. That's what we check, and on the intelligence side, it's because we've been working with DMVs since the '90s to help them roll out new barcodes — so we understand what's inside that barcode. The reason every fake barcode scans is because AAMVA — the American Association of Motor Vehicle Administrators, which every U.S. and Canadian jurisdiction belongs to — publishes a standard format. Nobody uses that published format except the bad guys, precisely so it will scan. So every one of these fakes I have will scan, but that doesn't mean they're real.
It's evolved — I'll confess, I may have tried to make my own ID with a scanner and printer in college, but that was how it used to be. You couldn't get a sophisticated ID; it always felt like a movie plot — you had to know somebody, pay $100,000 for a fake ID. What you're describing is that it's now super simple, right off the internet.
Fifty bucks for someone's new identity — on both the surface web and the dark web. And the scary part is, if you look at the UnitedHealthcare hack from last year, not only was personal information on a lot of people exposed, they had photos of people's IDs too. If you go to these websites, you can plug in the driver's license number, the document discriminator, and every other piece of information. So even checking against the DMV record would look legitimate, because all the information matches. What they can't recreate is the barcode that holds the 'secret sauce' of that particular state or province — that part is basically unhackable. It's scary how much about all of us is out there, and what people can do with it. It's not just stealing a trailer — it's stealing your identity and ripping you off everywhere.
One story I've heard, covering this whole freight-fraud and non-domicile CDL issue — I think it was Somalia — an executive at a large broker told me he was in an Uber, and the Somali driver confessed that there's one CDL shared across a whole group of people, and that law enforcement can't tell the difference. It seemed like something you almost can't say in public, but the driver was offering it up — they're sharing identity because law enforcement can't distinguish between people within these very specific groups. How do we finish this off? If someone has borrowed or been transferred an ID, how do you catch that without something like fingerprinting? When law enforcement pulls someone over, how do they know this person is legit?
I think you're talking about what's called a 'license rental' — my Uber license, my DoorDash license, or even a CDL, being transferred within a community. When that happens, somebody really has to look at whether this person matches the photo. We've seen this in certain crime rings that target specific demographics where people aren't looking closely enough at whether the person matches the picture. That's where the technology comes in as a first step — let's see if the license itself is real.
