Report: ID.me Lied About Pretty Much Everything While Providing Identification Services To The Government

ID.me made its disastrous news cycle debut as COVID-19 continued to wreak havoc worldwide. With ID verification and other government services mostly still being handled remotely, multiple governments continued to wrestle with these unprecedented logistical problems.

ID.me appeared to be such a solution. It wasn’t. In June 2021, it was reported that ID.me was locking people out of their unemployment benefits due to its inability to do the thing it said it could do: recognize faces to verify identity. Rather than bring more people on board to backstop AI judgment calls, ID.me CEO Blake Hall blamed users for being bad at providing facial photos for ID verification.

Somehow, ID.me’s failures and increasing number of user complaints didn’t stop it from expanding its customer base. As the pandemic raged on, the tech was purchased by dozens of state and federal agencies. This culminated in ID.me hooking up with the biggest whale in the ID verification ocean: the IRS.

Its failures continued. The only thing that had really changed was the number of people locked out of their government benefits and IRS accounts. The IRS soon ditched ID.me as its sole source of ID authentication following a few weeks of miserable service, but others continued to rely on what was apparently very unreliable tech. ID.me hit its nadir when it was discovered its AI was fooled by one guy and a very obvious wig to the tune of $900,000 in benefits fraud.

A couple of years have passed and ID.me has faded into the background noise generated by dozens of inadequate government services and solutions. However, some congressional reps haven’t forgotten about the company. An investigation into ID.me has concluded and the findings aren’t pretty.

New evidence shows that ID.me “inaccurately overstated its capacity to conduct identity verification services to the Internal Revenue Service (IRS) and made baseless claims about the amount of federal funds lost to pandemic fraud in an apparent attempt to increase demand for its identity verification services,” according to a new report from the two U.S. House of Representatives committees overseeing the government’s COVID-19 response.

The report also said that ID.me—which received $45 million in COVID relief funds from at least 25 state agencies—misrepresented the excessively long wait times it forced on people trying to claim emergency benefits like unemployment insurance and Child Tax Credit payments. Wait times for video chats were as long as 4 to 9 hours in some states.

The summary of the report [PDF] says things like “overstated” and “misrepresented.” Those are just nice congressional words for “lied.”

First off, there’s the “inaccurate overstatements” about ID.me’s capacity to handle the millions of users it told government agencies it would be able to handle. The nine hour wait times are just part of it. Rather than being able to handle nearly every verification request with automated processes, 10-15% of people seeking unemployment benefits (“hundreds of thousands” according to the report) were routed to ID.me staffers. And staffing apparently never expanded to meet exponentially increasing demand, according to former ID.me employees, creating the bottlenecks that led to people waiting on hold for up to nine hours.

Then there’s the marketing pitches, some of them made by CEO Blake Hall himself, that lied about the size of the unemployment fraud problem in the United States — the problem Hall and his company claimed to be able to solve.

Despite repeated requests, ID.me could not provide the Committees with any methodology it used to support its CEO’s assertion in June 2021 that “America has lost more than $400 billion to fraudulent claims” for unemployment benefits, or as “much as 50% of all unemployment monies,” which would be approximately $414 billion.

As the report points out, ID.me’s $400+ billion assertion is nearly ten times higher than estimates provided by the US Department of Labor. ID.me offered up sources for its spectacular claim, but the congressional report notes that the estimated losses do not add up to anything close to $400 billion and, more importantly, all post-date the CEO’s statements, meaning Blake Hall could not have based his assertion on these estimates. In fact, the report says Congress only found one source with an estimate anywhere near ID.me’s sky-high “estimate,” but this one is even worse than the others cited by ID.me:

ID.me also cited a July 2021 estimate from the Heritage Foundation that concluded $357 billion was lost to fraud. However, this analysis cited ID.me’s own earlier $400 billion assessment in reaching its conclusion, while also post-dating ID.me’s total.

So, the company lied about wait times, its capacity to handle the demands of multiple government agencies, and the amount of unemployment fraud that had occurred since the COVID pandemic hit US shores. Somehow, the company still has plenty of government customers. Its customer base may not be as big as it was a year ago, but it will seemingly take more than inadequate service and deceptive assertions to convince governments to fully divest themselves of ID.me.