Identity Theft and Business: Move Away From Using Social Security Numbers
One of the recommendations from the Presidentâ€™s Identity Theft Task Force: Decrease the unnecessary use of social security numbers in the public sector by developing alternative strategies for identity management.
Deborah Platt Majoras, Chairman of the Federal Trade Commission and co-chair of the Identity Theft Task Force gave this example why this recommendation is at the top of the list of 31 recommendations from the Task Force. â€œWe [at the FTC] recently received an identity theft complaint from a young consumer who recounted his experience of going with his mother to open his first checking account before he headed off to college. At the bank, he learned that a woman using his social security number had already opened a checking account which has been subsequently closed for default. When he contacted us, this young man was still working to clear his record. It is hard to regain trust in a system that allows that kind of a breach. So if you multiplied this consumerâ€™s story by the thousands of consumers weâ€™re hearing from each week you would have an instant calculation on the scope of the problem.â€
Majoras stressed that this move away from the use of social security numbers is needed, â€œWith the benefit of hindsight we have much to learn about our past use of social security numbers, often the most valuable piece of consumer information for a thief who plans on assuming anotherâ€™s identity.â€ Originally the social security number was created to track workerâ€™s earnings for social security benefit purposes. â€œThis number has evolved into a widely used identifier adopted by the public and the private sectors to identify consumers and match information to them and it has been very useful in doing that,â€ Majoras noted. But identity theft happens when it is assumed that the social security number was actually secret and it could be accepted as proof of identity.
â€œOf course, we realize now that it is not possible to use something so widely and so openly and expect it to remain a secret. Thus both public and private sectors have begun to take precautions regarding the use of social security numbers and many government agencies, universities, and businesses are moving away from using it as the only authenticator,â€ she said.
The task forceâ€™s recommendation included finding alternative strategies for identity management, and Majoras said there are lessons to be heeded when developing new identification/authentication systems. â€œWhat if we consider the impact of the social security number before its use became so widespread, would we have built in greater protections or better authentication measures? Fortunately we learn from experience. I sure hope we do. And we know that we must do better in anticipating the ramifications of any new identification and authentication systems that weâ€™re beginning to build today.â€
The financial services sector is being looked to for leadership in this alternative strategies for identity management effort, said Betsy Broder, Assistant Director in FTCâ€™s Division of Privacy and Identity Protection. The success that financial institutions have seen in implementing the strong authentication guidance from the FFIEC and thereby reducing online fraud, Broder said, â€œis the floor, and we want to see what works in authentication to develop consumer trust.â€
Businesses that are still using social security numbers for identification purposes need to move away from them and find alternative ways to identify customers. â€œPeople who are now moving over from social security numbers to other identifiers are not ahead of the curve, theyâ€™re catching up. Itâ€™s been well known for a while that the use of social security numbers, while they are a convenient identifier, the use of them compromises consumer safety,â€ Broder said.
There are some cases, where a social security number must be used, Broder noted, â€œFor example, say for a credit check, or for a specific transaction, including taxes, employment, and other required government uses of it. But in other cases, another random number could be used and would be just as good or better, and eliminate the chance of the social security number falling into the wrong hands.â€ She added as long as that number canâ€™t be used to bring up account information, â€œOtherwise then it will end up being the next social security number, and thatâ€™s not good either.â€