Tuesday, December 11, 2007
Which Leaves Consumers Vulnerable to Fraud
WASHINGTON, D.C. – The widespread use and availability of Social Security numbers puts Americans at risk for identity theft and should be restricted, according to Consumers Union, nonprofit publisher of Consumer Reports.
The group urged policymakers to take action to protect consumers as part of a public forum on the issue organized by the Federal Trade Commission in conjunction with the President’s Identity Theft Task Force. Social Security numbers are particularly sensitive information because they can provide the key to unlocking a consumer’s financial identity.
It’s no wonder millions of Americans fall victim to identity theft every year given how widely Social Security numbers are collected and used and the lack of any meaningful restrictions to protect them,” said Jeannine Kenney, Senior Policy Analyst with Consumers Union. “If federal policymakers are serious about fighting identity theft, they should make it harder for crooks to get their hands on Social Security numbers. That means limiting the purchase, sale, and unnecessary collection of these sensitive numbers.”
Kenney presented findings of a Consumer Reports National Research Center poll at the FTC forum showing that 89 percent of Americans want state and federal lawmakers to restrict the use and availability of Social Security numbers by businesses and government agencies. The poll also found that nearly all consumers want the right to freeze access to their credit files to prevent new account fraud. Currently 39 states and the District of Columbia give consumers the right to a security freeze and the three major credit bureaus have made the freeze available to consumers in the remaining states.
“The security freeze provides protection even if a thief obtains a consumer’s personal information,” said Kenney. “But we need strong protections on the front end that prevent crooks from acquiring sensitive information in the first place.”
The poll revealed that 87 percent of consumers have been asked in the past year to provide their Social Security number in whole or in part by a business or government agency. Requests come from a wide variety of businesses for purposes beyond credit, employment, or tax compliance. Many requests come from businesses that have no clear need to collect these numbers.
Several pending congressional proposals would restrict the sale, purchase, and display of Social Security numbers. Consumers Union recommends that the sale and purchase of the numbers be tightly restricted and that solicitation be prohibited except where required by law or where needed for credit, employment,
tax compliance, or investment purposes.
Social Security numbers are used by businesses to identify and authenticate the identity of individuals and can be easily found on the Internet, in public records, on identification cards, and in mail sent to consumers. The poll results confirm that solicitation and use of Social Security numbers is widespread:
• In the past year, 60 percent of consumers have been asked by a financial institution or retailer issuing credit to provide their Social Security number, while 49 percent have been asked to disclose their number to healthcare providers.
• Consumers also reported being asked to provide their Social Security number in the past year to a wide variety of other entities, including: employers or potential employers (44%); insurance companies (36%); government agencies other than the IRS or a state tax body (32%); college or other school (28%); service provider such as cable TV or cell phone carrier (26%); utilities (17%), and merchant or retailer (16%).
• More than four in ten Americans (42%) have been asked to provide their full or partial Social Security number on the phone or internet to access goods or services or to verify their identity to customer service representatives.
• One in seven Americans (14%) reported that they received postal mail (other than tax documents) bearing their own or a family member’s Social Security number in the past year.
• Fifty two percent of Americans carry a card in their wallets that has their number on it.
The Consumer Reports poll found that Americans are concerned about the widespread availability of Social Security numbers and how businesses are using them:
• 78 percent would prefer not to provide their number, but are concerned about the consequences of refusing to do so.
• 91 percent agreed they are more vulnerable to identity theft when a business has their number.
• 89 percent agreed that companies should stop using Social Security numbers to identify customers.
• 96 percent agreed that companies should not be able to sell them.
“Americans are clearly concerned that the widespread use of Social Security numbers puts them at risk of fraud and want lawmakers to restrict this practice,” said Kenney. ““It’s time to get Social Security numbers off the Internet, out of our wallets, and out of our mail to help reduce the threat of identity theft.”
The Consumer Reports National Research Center conducted a telephone survey using a nationally representative probability sample of telephone households. 1,016 interviews were completed among adults aged 18+. Interviewing took place over August 16-19, 2007. The margin of error is +/- 3.1% at a 95 percent confidence level.
For more information about the Social Security number privacy bills pending in Congress, see: http://www.consumersunion.org/pdf/SSNBillSummary.pdf