U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

63–017 2011

PROTECTING THE PRIVACY OF THE SOCIAL 

SECURITY NUMBER FROM IDENTITY THEFT 

HEARING 

BEFORE THE

SUBCOMMITTEE ON SOCIAL SECURITY 

OF THE

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

JUNE 21, 2007 

Serial No. 111–33 

Printed for the use of the Committee on Ways and Means 

( 


ccoleman on DSK8P6SHH1PROD with HEARING
ii 

COMMITTEE ON WAYS AND MEANS 

CHARLES B. RANGEL, New York, Chairman 

FORTNEY PETE STARK, California 

SANDER M. LEVIN, Michigan 

JIM MCDERMOTT, Washington 

JOHN LEWIS, Georgia 

RICHARD E. NEAL, Massachusetts 

MICHAEL R. MCNULTY, New York 

JOHN S. TANNER, Tennessee 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

EARL POMEROY, North Dakota 

STEPHANIE TUBBS JONES, Ohio 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

RAHM EMANUEL, Illinois 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL JR., New Jersey 

SHELLEY BERKLEY, Nevada 

JOSEPH CROWLEY, New York 

CHRIS VAN HOLLEN, Maryland 

KENDRICK MEEK, Florida 

ALLYSON Y. SCHWARTZ, Pennsylvania 

ARTUR DAVIS, Alabama 

JIM MCCRERY, Louisiana 

WALLY HERGER, California 

DAVE CAMP, Michigan 

JIM RAMSTAD, Minnesota 

SAM JOHNSON, Texas 

PHIL ENGLISH, Pennsylvania 

JERRY WELLER, Illinois 

KENNY HULSHOF, Missouri 

RON LEWIS, Kentucky 

KEVIN BRADY, Texas 

THOMAS M. REYNOLDS, New York 

PAUL RYAN, Wisconsin 

ERIC CANTOR, Virginia 

JOHN LINDER, Georgia 

DEVIN NUNES, California 

PAT TIBERI, Ohio 

JON PORTER, Nevada 

Janice Mays, Chief Counsel and Staff Director 

Brett Loper, Minority Staff Director 

SUBCOMMITTEE ON SOCIAL SECURITY

MICHAEL R. MCNULTY, New York, Chairman 

SANDER M. LEVIN, Michigan 

EARL POMEROY, North Dakota 

ALLYSON Y. SCHWARTZ, Pennsylvania 

ARTUR DAVIS, Alabama 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

STEPHANIE TUBBS JONES, Ohio 

SAM JOHNSON, Texas 

RON LEWIS, Kentucky 

KEVIN BRADY, Texas 

PAUL RYAN, Wisconsin 

DEVIN NUNES, California 

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records 

of the Committee on Ways and Means are also, published in electronic form. The printed 

hearing record remains the official version. Because electronic submissions are used to 

prepare both printed and electronic versions of the hearing record, the process of converting 

between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process 

is further refined. 


ccoleman on DSK8P6SHH1PROD with HEARING
iii 

C O N T E N T S 

Page 

Advisory of June 14, 2007, announcing the hearing ............................................. 2 

WITNESSES 

Hon. Charles E. Schumer, a Senator from New York .......................................... 6 

Hon. Ed Markey, a Representative in Congress from Massachusetts ................ 59 

Hon. Joe Barton, a Representative in Congress from Texas ............................... 68 

Hon. Patrick O’Carroll, Inspector General, Social Security Administration ...... 63 

Joel Winston, Director, Division of Privacy and Information Protection, Federal Trade Commission ........................................................................................ 74 

Dan Bertoni, Associate Director, Education, Workforce, and Income Security, 

Government Accountability Office ...................................................................... 96 

Justin Yurek, President, ID Watchdog, Denver, Colorado ................................... 118 

Stuart Pratt, President, Consumer Data Industry Association ........................... 123 

James D. Gingerich, Director, Administrative Office of the Courts, Supreme 

Court of Arkansas, on behalf of the Conference of State Court Administrators, Williamsburg, Virginia ................................................................................ 131 

Annie I. Anto ́n, Associate Professor of Software Engineering, North Carolina 

State University, Raleigh, North Carolina, on behalf of the Association 

for Computing Machinery .................................................................................... 138 

Marc Rotenberg, Executive Director, Electronic Privacy Information Center .... 158 

Gilbert T. Schwartz, Partner, Schwartz & Ballen LLP, on behalf of the 

Financial Services Coordinating Council ........................................................... 169 

SUBMISSIONS FOR THE RECORD 

LexisNexis, letter ..................................................................................................... 183 

Bruce Hulme, Legislative Director, National Council of Investigation and 

Security Services, statement ............................................................................... 187 

National Organization of Social Security Claimants’ Representatives, statement ...................................................................................................................... 188 

Property Records Industry Association, statement ............................................... 190 


ccoleman on DSK8P6SHH1PROD with HEARING

ccoleman on DSK8P6SHH1PROD with HEARING
(1) 

PROTECTING THE PRIVACY OF THE SOCIAL 

SECURITY NUMBER FROM IDENTITY THEFT 

THURSDAY, JUNE 21, 2007 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON WAYS AND MEANS, 

SUBCOMMITTEE ON SOCIAL SECURITY, 

Washington, DC. 

[The advisory announcing of the hearing follows:] 


ccoleman on DSK8P6SHH1PROD with HEARING
2 

ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

McNulty Announces a Hearing on Protecting the 

Privacy of the Social Security Number from 

Identity Theft 

June 21, 2007 

By (202) 225–9263 

Congressman Michael R. McNulty (D–NY), Chairman, Subcommittee on Social Security of the Committee on Ways and Means, today announced that the Subcommittee will hold a hearing to examine the role of Social Security numbers (SSNs) 

in identity theft and options to enhance their protection. The hearing will take 

place on Thursday, June 21, in room B–318 Rayburn House Office Building, 

beginning at 10 a.m. 

In view of the limited time available to hear witnesses, oral testimony at this 

hearing will be from invited witnesses only. However, any individual or organization 

not scheduled for an oral appearance may submit a written statement for consideration by the Subcommittee and for inclusion in the printed record of the hearing. 

BACKGROUND 

As many as ten million Americans fall victim to identity theft every year. The effects of identity theft can be catastrophic to the lives of affected individuals. The 

reported costs are significant—according to the Federal Trade Commission, businesses lose $50 billion and consumers expend another $5 billion annually to recover 

from identity theft. The SSN is a critical tool for identity thieves looking to establish 

a credit account in someone else’s name. And it is often the key that identity thieves 

use to gain access to other personal information such as bank accounts. 

Because it is a unique piece of personal information that does not change over 

time, the SSN provides a convenient way to track individuals throughout public and 

private records. As a result, SSNs have become ubiquitous in these records, and 

they are being used for purposes far beyond their original role of tracking earnings 

in order to compute Social Security benefits. While the widespread use of SSNs can 

be advantageous to business and government, it is also useful for identity thieves 

and other criminals. Moreover, records containing the SSN are increasingly available in electronic form, and easily accessible over the Internet. Thus, the need for 

streamlined business processes and openness of public records must be balanced 

against the increasing risks of identity theft and other crimes. 

Despite its widespread usage, there is no Federal law that requires comprehensive 

confidentiality protection for the SSN. An SSN may be found on display to the general public on employee badges and in court documents, or offered for sale on the 

Internet. Some limited protection of SSN confidentiality is provided by the Fair 

Credit Reporting Act (P.L. 91–508) and the Gramm-Leach-Bliley Act (P.L. 106–102), 

which restrict the use and disclosure of SSNs by financial institutions. Also, many 

states have enacted legislation to restrict the use, disclosure or display of SSNs. 

Still most private sector use of the number remains unregulated. 

In the 108th Congress, the Committee on Ways and Means approved comprehensive legislation to enhance SSN privacy to protect against identity theft (H.R. 2971; 

H. Rept. 108–685). Among other provisions, the bill would restrict the use, sale, purchase or display of SSNs. Members of Congress concerned about the magnitude of 

identity theft and its devastating effects on victims have introduced similar legislation this year. 

In announcing the hearing, Chairman McNulty stated ‘‘there is no question 

that we need stronger protections for Social Security numbers to combat 


ccoleman on DSK8P6SHH1PROD with HEARING
3 

the growing crime of identity theft. Identity theft can destroy an individual’s or family’s financial well-being with a touch of a button. We must 

begin to place some common-sense limits on the use of the SSN by government and business in order to ensure the privacy of the information and 

prevent theft.’’ 

FOCUS OF THE HEARING: 

The Subcommittee will examine what role the SSN plays in identity theft, and 

the steps that can be taken to increase SSN privacy and thereby limit its availability to identity thieves and other criminals. The hearing will examine how SSNs 

are currently used, what risks to individuals and businesses arise from its widespread use and options to restrict its use in the public and private sectors. 

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS: 

Please Note: Any person(s) and/or organization(s) wishing to submit for the hearing record must follow the appropriate link on the hearing page of the Committee 

website and complete the informational forms. From the Committee homepage, 

http://democrats.waysandmeans.house.gov, select ‘‘110th Congress’’ from the menu 

entitled, ‘‘Committee Hearings’’ (http://democrats.waysandmeans.house.gov/Hearings.asp?congress=18). Select the hearing for which you would like to submit, and 

click on the link entitled, ‘‘Click here to provide a submission for the record.’’ Once 

you have followed the online instructions, completing all informational forms and 

clicking ‘‘submit’’ on the final page, an email will be sent to the address which you 

supply confirming your interest in providing a submission for the record. You MUST 

REPLY to the email and ATTACH your submission as a Word or WordPerfect document, in compliance with the formatting requirements listed below, by close of business Thursday, July, 5, 2007. Finally, please note that due to the change in House 

mail policy, the U.S. Capitol Police will refuse sealed-package deliveries to all House 

Office Buildings. For questions, or if you encounter technical problems, please call 

(202)225–1721. 

FORMATTING REQUIREMENTS: 

The Committee relies on electronic submissions for printing the official hearing record. As always, submissions will be included in the record according to the discretion of the Committee. 

The Committee will not alter the content of your submission, but we reserve the right to format 

it according to our guidelines. Any submission provided to the Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response 

to a request for written comments must conform to the guidelines listed below. Any submission 

or supplementary item not in compliance with these guidelines will not be printed, but will be 

maintained in the Committee files for review and use by the Committee. 

1. All submissions and supplementary materials must be provided in Word or WordPerfect 

format and MUST NOT exceed a total of 10 pages, including attachments. Witnesses and submitters are advised that the Committee relies on electronic submissions for printing the official 

hearing record. 

2. Copies of whole documents submitted as exhibit material will not be accepted for printing. 

Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material 

not meeting these specifications will be maintained in the Committee files for review and use 

by the Committee. 

3. All submissions must include a list of all clients, persons, and/or organizations on whose 

behalf the witness appears. A supplemental sheet must accompany each submission listing the 

name, company, address, telephone and fax numbers of each witness. 

Note: All Committee advisories and news releases are available on the World 

Wide Web at http://democrats.waysandmeans.house.gov. 

The Committee seeks to make its facilities accessible to persons with disabilities. 

If you are in need of special accommodations, please call 202–225–1721 or 202–226– 

3411 TTD/TTY in advance of the event (four business days notice is requested). 

Questions with regard to special accommodation needs in general (including availability of Committee materials in alternative formats) may be directed to the Committee as noted above. 

f 


ccoleman on DSK8P6SHH1PROD with HEARING
4 

The Subcommittee met, pursuant to notice, at 10:00 a.m., in 

room B–318 Rayburn House Office Building, Hon. Michael R. 

McNulty (Chairman of the Subcommittee) presiding. 

Chairman MCNULTY. The hearing will come to order. I want to 

welcome all of our witnesses and all of our guests. You will notice 

on the list of witnesses that we have three Members of Congress 

scheduled to be here today, Senator Schumer, Congressman Markey and Congressman Barton. They are involved in markups today 

so we do not know exactly what time they will arrive, but as they 

arrive, we will ask the indulgence of the other witnesses to accommodate their statements so that they can come in, make their 

statement, if they have time, answer a couple of questions and then 

get back to their markup. 

Our hearing today will focus on the role that the Social Security 

number plays in the crime of identity theft and options to enhance 

the privacy and security of the Social Security number so that it 

is not as useful a tool for identity thieves. 

Stealing or obtaining Social Security numbers through illegitimate means is a key part of identity fraud. Our Subcommittee is 

deeply concerned about identity theft and how to better protect the 

Social Security number. In fact, this is the 16th hearing on this 

topic we have held in the past 7 years. Identify theft is one of the 

fastest growing crimes in the United States. Research by the Federal Trade Commission suggests that almost 5 percent of the adult 

population of the United States, some 10 million people, were victims of some kind of identity theft in just a single 12-month period. 

Through its Web site and toll free hotline, the FTC receives between 15,000 and 20,000 contacts each week from those who have 

been victimized by identify thieves, as well as people seeking information about how to protect themselves from identity theft. Identity theft ruins individuals’ good names and destroys their credit 

ratings. Identity thieves have stolen the homes of elderly retirees 

and have caused innocent persons to be arrested when crimes are 

committed under a falsified identity. It has even ruined the future 

credit ratings of young children. 

The FTC reports that individuals spend $5 billion a year attempting to recover their good names and credit histories. Annual 

surveys find that businesses lose more than $50 billion per year to 

identity theft-related fraud. Victims also spend years cleaning up 

the damage done by such thieves. In fact, we have learned that a 

victim who testified before this Subcommittee in the previous Congress, Nicole Robinson, still has not been able to correct her credit 

record. Even though she testified before Congress and our staff intervened with the credit bureaus, she continues to experience problems relating from the theft of her identity 7 years after her identity was first stolen. 

The Social Security Administration and its inspector general 

have worked diligently to increase the integrity and security of the 

Social Security number and the procedures used in issuing it. But 

SSA has essentially no control over how the Social Security number 

is used by other governmental agencies or the private sector. 

Today, we will hear about the problem of identity theft from Government agencies who have studied it and representatives of those 

who suffer from it. We will hear from businesses and Government 


ccoleman on DSK8P6SHH1PROD with HEARING
5 

agencies that use the Social Security and we will hear suggestions 

on how to better protect the Social Security number by limiting its 

use by Government and the private sector. I am committed to moving forward with legislation and of making it more difficult for 

thieves and other wrongdoers to obtain a Social Security number 

and use it to commit identity theft or other crimes. I welcome the 

testimony we will receive today that will help us better understand 

the nature of the problem and the potential solutions. 

I am now pleased to yield to the Ranking Member of the Committee, a distinguished veteran and one of my heroes in life, Mr. 

Johnson. 

Mr. JOHNSON. Thank you, Mr. Chairman. I appreciate Chairman McNulty for holding this hearing on protecting the privacy of 

Social Security numbers from identity theft. You know Americans 

are rightly worried about the security of their personal information, 

including their Social Security number. We hear reports on a daily 

basis about another data breach in the private or public sector 

where hundreds, if not thousands, of people’s personal identity information is stolen. 

According to the Privacy Rights Clearinghouse, the total number 

of known records that have been compromised due to security 

breaches beginning in January 2005 through last week was over 

155 million. The fact is that even though Social Security numbers 

were created to track earnings for determining eligibility and benefit amounts under Social Security, these numbers are widely used 

as personal identifiers. 

As we will hear today, Social Security numbers are vital to many 

commercial and Government transactions to verify identity and 

prevent fraud. Examples include enforcing child support, aiding 

law enforcement, compiling information from many sources to help 

ensure the accuracy of credit reports. Unfortunately, as pointed out 

by the GAO in testimony before this Subcommittee, Social Security 

numbers have become the identifier of choice and are used for everyday business transactions. In fact, in their April 2007 report, 

the President’s Identity Theft Task Force identified the Social Security number as the most valuable commodity for an identity 

thief. So, it is no wonder that concerns about identity theft remain 

high. 

According to the Federal Trade Commission, identity theft is the 

number one consumer complaint, amounting to 36 percent of complaints received in 2006. Americans are right to be concerned. According to the latest data provided by the FTC, over a 1-year period, nearly 10 million, or about 5 percent of the adult population, 

discovered they were victims of identity theft. Even worse, the true 

number of victims in this devastating crime is unknown since most 

victims do not report it. Losses due to these thefts were estimated 

to exceed $50 billion. Also, it has been reported that ID theft victims spend roughly 300 million hours a year trying to resolve the 

negative effects of ID theft, including re-establishing their hardearned good credit and clearing their good name. Even worse, identity theft continues to threaten our national security. As said in the 

9/11 Commission Report, and this is a quote, ‘‘Fraud in identification documents is no longer just a problem of theft. At many entry 

points to vulnerable facilities, including gates for board aircraft, 


ccoleman on DSK8P6SHH1PROD with HEARING
6 

sources of identification are the last opportunity to ensure that people are who they say they are and to check whether or not they 

are terrorists.’’ 

Our Subcommittee has been working on a bipartisan basis to 

protect the privacy of Social Security numbers and prevent identity 

theft since the 106th Congress when it first approved the Social Security number Privacy and Identity Theft Prevention Act to restrict 

the sale and public display of Social Security numbers. This legislation was introduced on a bipartisan basis by then Subcommittee 

Chairman Clay Shaw and then Ranking Member, the late Bob 

Matsui. We know that providing for uses of Social Security numbers that benefit the public while protecting their privacy is a complex balancing act. However, I believe we must act and with your 

help, Mr. Chairman, we will act to stop rampant abuse of Social 

Security numbers, help prevent ID theft and further protect American privacy. 

I look forward to hearing from each of our witnesses and thank 

them in advance for sharing with us their experiences and recommendations. Thank you, sir. 

Chairman MCNULTY. I thank the Ranking Member. Other 

Members will be allowed to insert opening statements for the 

record. We are pleased at this time to be joined by Senator Schumer, who is involved in another markup, and we are going to go 

to him right away. He is the senior Senator from the State of New 

York. He has a long history on this subject of trying to protect our 

constituents across the country from identity theft. He is a dear 

friend of mine and before he leaves, I am going to give him a little 

editorial from one of the local newspapers in my district because 

when he was first elected to the Senate back in 1998, many people 

in upstate New York were wondering how much they would see of 

the new Senator, and he made a pledge that he would visit each 

of the 62 counties in the State of New York every single year that 

he was in office. The editorial from the newspaper cites the fact 

that you have kept that pledge every single year that you have 

served in the Senate. Thank you for going over and visiting my 

friend John Redcliffe and the farmers over there, they deeply appreciate it. 

Senator Schumer. 

STATEMENT OF CHARLES E. SCHUMER, A U.S. SENATOR FROM 

THE STATE OF NEW YORK 

Senator SCHUMER. Well, thank you, Mr. Chairman. I very 

much appreciate the introduction. I am so glad to be here for a 

whole lot of reasons. First, it is great to call you ‘‘Mr. Chairman,’’ 

my good friend Mike McNulty, who does such a wonderful job both 

in the capital region and down here. Second, for the 18 years in the 

House, or at least the first 9 and 10, I really wanted to be on this 

Committee, and I never got on so I am glad to get here at least 

on this side of the table. I am now on Senate Finance. Things work 

a little faster in the Senate in terms of seniority. 

I thought I might just tell a quick story in reference to the Chairman’s mention. It is true I visit every county every year, so I am 

pretty diligent. I go to the little counties and big counties. In 2004, 

when I ran for re-election, I carried 61 of the 62 counties. I did not 


ccoleman on DSK8P6SHH1PROD with HEARING
7 

carry one, Hamilton County, not that far from where you are. 

Hamilton is a beautiful county. It is as large as Rhode Island. It 

is in the middle of Adirondacks, great forests and rivers and mountains, great hunting, great fishing, but it is our smallest county 

population-wise. It has a little bit fewer than 5,000 people. I had 

visited it six times since re-election, which was a lot. I asked my 

chief of staff, ‘‘Why do you think I lost Hamilton County,’’ Martin 

Brennan. Martin Brennan said, ‘‘It is easy, Chuck, it is the only 

county where you actually met every single voter.’’ 

Anyway, it is good to be here. I want to thank all of my friends, 

so many of whom I served with in the House, and my friend, Eddy 

Markey, who was senior to me then and senior to me now, and I 

thank you for your leadership on this issue, Mr. Chairman. Let me 

thank Congressman Rangel, our colleague from New York as well. 

We all know when it comes to identity theft, the Social Security 

number is the golden key that opens all doors. If you can get a person’s Social Security number, you can impersonate him, steal his 

money, ruin his credit and literally devastate his life. In my testimony, I am going to focus on one particular risk of identity theft 

and what Congress can do about it. I am pleased that today the 

GAO, the Government Accountability Office, prepared at my request a report which focuses on the insidious problem of Social Security numbers displayed online in public records, and that report 

is being release coincident with this hearing. 

Now, it used to be that when your tax lien or your divorce decree 

was filed as a public record, it sat in an office building. You had 

to go there in person to track down a record but in recent years, 

more and more Government agencies are putting public records on 

the Internet. In fact, the GAO found that in 40 out of 50 States, 

one or more offices are displaying people’s public records right on 

the Internet. Anyone with a computer can now view these online 

records, often for free. The recordkeepers who put files online probably just want to provide more transparency and access to information and those are important values I think we all support, but we 

need to have public access in a way that does not expose people to 

identity theft. 

In the words of the GAO, these online records provide ‘‘potentially unlimited access’’ to personal information, including Social 

Security numbers. It is not surprising that there are known cases 

where identity thieves use online public records to prey on their 

victims. Yet, the GAO reports that online display of public records 

is on the rise. We cannot let this practice continue unchecked. The 

report shows that online public records may be doing more harm 

than good. The world has changed but our laws are lagging far behind. 

Here is what we can do about it, Mr. Chairman, and I look forward to working with you and Chairman Rangel to try and accomplish some good changes here. First, we need to have uniform 

standards for protecting Social Security numbers by hiding either 

the first five digits or the last four digits. The good news is that 

Federal agencies have started hiding the first five digits of Social 

Security numbers in public record documents. The very bad news 

is that data brokers and other entities are going in the opposite direction and hiding the last four digits. So, it is a classic case of the 


ccoleman on DSK8P6SHH1PROD with HEARING
8 

Federal Government where one hand does not know what the other 

is doing. It makes it very easy to use public sources to get the 

whole nine numbers. It is sort of a little bit like an Abbott and 

Costello routine. 

You get the first five from the Social Security records—you get 

the last four from the Social Security records, the first five from 

the others, the data brokers and others, and you sort of have 

straight flush for identity theft. It is like a slap stick routine, each 

group points the finger at the other but it is not a joke when ordinary citizens are paying the price. The GAO was able to piece together people’s full nine digit numbers even though they were always hidden, one half or the second half, in just one hour from 

their desks. An identity thief could do this anywhere in the world. 

So, I am proposing legislation that would require the Social Security Administration to set standards, telling public agencies and 

private businesses what method of truncation to use so everyone 

will be protected. It is sort of a tragedy of errors, everyone is trying 

to help by masking part of the number but no one is paying attention to the big picture and that is where they need a Federal role. 

Congress should act now because the numbers of records involved are growing everyday, a little coordination in this area will 

go a long way toward stopping identity theft and it seems to me 

that this simple bill should pass by a wide margin. I do not know 

who would oppose it. 

Second, we need to make sure that state and local recordkeepers 

are never displaying full Social Security numbers on the Internet. 

I will be re-introducing my bill from the last Congress to ban these 

recordkeepers from showing complete numbers on the Internet. 

Again, I hope this bill can be passed quickly given the evidence of 

the report. The legislation is feasible and practical given the advanced technology we have today, like software to help find and 

hide Social Security numbers. County clerks and other public recordkeepers are public servants and they should be taking steps to 

protect people. They cannot say, ‘‘Well, it is not my problem.’’ 

So, if recordkeepers want to put documents online, they should 

but they should hide all or part of the Social Security number that 

appears in those documents. Under this bill, the Department of 

Justice will be able to enforce the ban by imposing fines on any office that ignores the law. It will also help recordkeepers by authorizing grants to their offices if they want to redact Social Security 

numbers from the older records because that takes a job to go back 

and do it, and we do not think that the local taxpayer should have 

to foot the entire bill for that. 

Finally, the GAO reports that private businesses have been buying public records in bulk for years. We need to know more about 

this practice, and I have asked the GAO to investigate it. Currently, we have no idea how frequently our records are being sold 

or why or where they go. This report reveals there may be large 

sets of records that are overseas and that these Social Security 

numbers may be beyond the protections of American law. When the 

GAO reports back on their investigation, we should try to work together to close any loopholes. The buying and selling of our private 

information is not the kind of thing that should be happening in 


ccoleman on DSK8P6SHH1PROD with HEARING
9 

the dark of night without any oversight even from people who are 

10,000 miles away. 

With the great power of today’s technology, Mr. Chairman, in 

conclusion, comes a great responsibility to regulate that technology 

and avoid unintended harms. The measures I have mentioned 

today will address the risks uncovered in today’s report, excellent 

report by the Government Accountability Office, great job, and I 

hope that my colleagues will join me in moving these measures forward to protect Americans from identity theft. 

In conclusion, finally, I want to thank the Subcommittee and 

your leadership, Mr. Chairman, and the Ranking Member, Mr. 

Johnson, so that we can—this is an important step, this hearing, 

on rising to the challenge of protecting our Social Security numbers. I very much thank you for allowing me to be here today. 

[The prepared statement of Senator Schumer follows:] 

Prepared Statement of the Honorable Charles E. Schumer 

a Senator from New York 

Good morning, Chairman McNulty and Ranking Member Johnson. Thank you for 

inviting me to testify. 

I want to commend Subcommittee Chairman McNulty and Committee Chairman 

Rangel, my esteemed colleagues from the New York delegation, for holding this important hearing on protecting Social Security numbers. 

We all know that when it comes to identity theft, the Social Security number is 

the golden key that opens all doors. If you can get a person’s Social Security number, you can impersonate him, steal his money, ruin his credit, and literally devastate his life. 

In my testimony, I’m going to focus on one particular risk of identity theft, and 

what Congress can do about it. I am pleased to announce today’s release of a new 

report, prepared at my request by the Government Accountability Office, that focuses on the insidious problem of Social Security numbers displayed online in public 

records. 

It used to be that when your tax lien or your divorce decree was filed as a public 

record, it sat in an office building. You had to go there in person to track down a 

record. But in recent years, more and more government agencies are putting public 

records on the Internet. 

In fact, the GAO found that in 40 out of 50 states, one or more offices are displaying people’s public records right on the Internet. Anyone with a computer can 

now view these online records, often for free. 

The record-keepers who put files online probably just want to provide more transparency and access to information, which are important values that I support. 

But we need to have public access in a way that doesn’t expose people to identity 

theft. 

In the words of the GAO, these online records provide ‘‘potentially unlimited access’’ to personal information, including Social Security numbers. 

It’s not surprising that there are known cases where identity thieves used online 

public records to prey on their victims. 

And yet the GAO reports that online display of public records is on the rise. We 

cannot let this practice continue unchecked. 

This report shows that online public records may be doing more harm than good. 

The world has changed, but our laws are lagging far behind. 

Here’s what Congress can do about it, and I hope that my good colleagues here 

on the House side will lend their support to these measures. 

First, we need to have uniform standards for protecting Social Security numbers 

by hiding either the first five digits or the last four digits. 

The good news is that federal agencies have started hiding the first five digits of 

Social Security numbers in public record documents. The very bad news is that data 

brokers and other entities are going in the opposite direction of hiding the last four 

digits. 

This is a case of classic Federal Government where one hand doesn’t know what 

the other is doing. 

This makes it very easy to use public sources to piece together a full nine-digit 

Social Security number that could be used for identity theft. The GAO was able to 


ccoleman on DSK8P6SHH1PROD with HEARING
10 

do this in just one hour, from their desks. An identity thief could do the exact same 

thing—from anywhere in the world. 

It’s almost like a slapstick routine—each group is pointing the finger at the other. 

But it’s not a joke when ordinary citizens are paying the price. 

That’s why I am proposing new legislation that will require the Social Security 

Administration to set standards telling public agencies and private businesses exactly what method of truncation to use. 

It’s a tragedy of errors—everyone is trying to help by masking part of the number, 

but no one is paying attention to the big picture. It’s time for a federal role. 

Congress should act now, because the numbers of records involved are growing 

every day. Just a little coordination here will go a long way toward stopping identity 

theft, and it seems to me that this simple bill should pass by a wide margin. 

Second, we need to make sure that state and local record-keepers are never displaying full Social Security numbers on the Internet. I will be reintroducing my bill 

from the last Congress to ban these record-keepers from showing complete numbers 

on the Internet. 

I hope that my bill can be passed quickly, given the new evidence in this report. 

This legislation is both feasible and practical given the advanced technology we have 

today, like software to help find and hide Social Security numbers. 

County clerks and other record-keepers are public servants—they should be taking steps to protect people. If record-keepers want to put documents online, they are 

welcome to do so, but they should hide all or part of any Social Security number 

that appears in those documents. 

Under this bill, the Department of Justice will be able to enforce the ban by imposing fines on any office that ignores the law. My legislation will also help recordkeepers by authorizing grants to offices that want to redact Social Security numbers 

from older records, but need more resources. 

Finally, the GAO reports that private businesses have been buying public records 

in bulk for years. We need to know more about this practice, and I have already 

asked the GAO to investigate it. 

Currently, we have no idea how frequently our records are being sold, or why, or 

where they go. This report reveals that there may be large sets of records that are 

overseas, and that these Social Security numbers may be beyond the protections of 

American law. 

When the GAO reports back on their investigation, the Congress should move 

quickly to close any loopholes. The buying and selling of our private information is 

not the kind of thing that should be happening in the dark of night, without any 

oversight. 

With the great power of today’s technology comes a great responsibility to regulate that technology and to avoid unintended harms. The measures that I’ve highlighted will address the risks uncovered in today’s report, and I hope that my colleagues will join me in moving these measures forward to protect Americans from 

identity theft. 

In closing, let me say that I appreciate the excellent work of the Government Accountability Office in preparing this study. 

Again, I thank the Subcommittee for recognizing that we must rise to the challenge of protecting our Social Security numbers, and thank you for having me here 

today. 

f 

Chairman MCNULTY. Thank you very much, Senator Schumer. 

I know you are on the run but I just wanted to thank you for your 

testimony, to assure you that we will work together with you on 

legislation. I also want to thank you for a statement you made in 

another trip upstate recently about properly funding the Social Security agency so that we can start to cut back on this tremendous 

backlog that we have with regard to disability claims, which is not 

only a tremendous hardship on many of our constituents, it is a national embarrassment to every Member of Congress when someone 

comes in with a legitimate claim for a government benefit, and we 

tell them they have to wait a year and a half or 2 years before they 

even get an answer, so we really need to do something about that. 


ccoleman on DSK8P6SHH1PROD with HEARING
11 

I want to thank you for your commitment in that regard. On the 

House side, we have taken some steps in moving toward that. We 

have got $100 million over the President’s request out of the Appropriations Committee, I asked for more than that but we got that 

far anyway. In recent years, the President’s request has been 

under-funded, we are $100 million over. I am hoping that on the 

Senate side you can help us get to at least that number, or hopefully higher, so that we can begin to make a serious dent in this 

backlog. I do not know if you have time, do you have time to take 

a couple of questions? Then we will get immediately to Ed Markey 

after that. Does any Member wish to pose a question to the Senator? Yes, Lloyd? 

Mr. DOGGETT. Chuck, thanks so much for what you have been 

doing on this. Can you update us on where this legislation is in the 

Senate and how you think it is moving over there? 

Senator SCHUMER. I think it is moving very well. We are just 

going to update it because of the GAO report, particularly the first 

thing I mentioned, but it seems to have support. The one place 

where there was objection, the old or the local officials who used 

and put these things online, we have dealt with their objections, 

and I think the new legislation should have smooth sailing. Thank 

you, Lloyd. 

Chairman MCNULTY. I also want to ask unanimous consent 

that we insert into the record the new GAO report, which the Senator referenced in his testimony. Mr. Levin. 

[The provided material follows:] 


ccoleman on DSK8P6SHH1PROD with HEARING
12 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 1 here 63017.001
13 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 2 here 63017.002
14 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 3 here 63017.003
15 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 4 here 63017.004
16 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 5 here 63017.005
17 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 6 here 63017.006
18 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 7 here 63017.007
19 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 8 here 63017.008
20 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 9 here 63017.009
21 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 10 here 63017.010
22 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 11 here 63017.011
23 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 12 here 63017.012
24 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 13 here 63017.013
25 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 14 here 63017.014
26 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 15 here 63017.015
27 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 16 here 63017.016
28 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 17 here 63017.017
29 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 18 here 63017.018
30 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 19 here 63017.019
31 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 20 here 63017.020
32 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 21 here 63017.021
33 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 22 here 63017.022
34 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 23 here 63017.023
35 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 24 here 63017.024
36 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 25 here 63017.025
37 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 26 here 63017.026
38 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 27 here 63017.027
39 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 28 here 63017.028
40 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 29 here 63017.029
41 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 30 here 63017.030
42 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 31 here 63017.031
43 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 32 here 63017.032
44 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 33 here 63017.033
45 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 34 here 63017.034
46 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 35 here 63017.035
47 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 36 here 63017.036
48 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 37 here 63017.037
49 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 38 here 63017.038
50 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 39 here 63017.039
51 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 40 here 63017.040
52 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 41 here 63017.041
53 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 42 here 63017.042
54 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 43 here 63017.043
55 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 44 here 63017.044
56 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 45 here 63017.045
57 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 46 here 63017.046
58 

f 

Mr. LEVIN. Welcome. 

Senator SCHUMER. Glad to be here, Sandy. 

Mr. LEVIN. Both of you and everybody else. Just quickly, and 

I will ask the same of Ed Markey, what is the source of the hesitation or the resistance? 

Senator SCHUMER. The only resistance, it is a good question, 

was from the local officials who said, ‘‘Look, we have an obligation 

to put it online, you do something about it.’’ So, the fact that we 

are both mandating that in the future they treat things one way, 

that is not too hard for them to do. There is software that does that 

easily. For past records that are on display, which of course an 

identity thief anywhere in the world could go back to, we help give 

them some funding to cover those up because that is a little harder. 

You have got to go back in the records and re-enter them. I think 

now most of the opposition is gone. 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 47 here 63017.047
59 

Mr. LEVIN. By the way, I am not sure, as I look around, if everybody is old enough to remember Abbott and Costello. 

Your reference to them—they are going into different doors. 

Senator SCHUMER. Right. 

Mr. LEVIN. But it sounds very much like these actions would be 

attributed to Abbott and Costello. 

Senator SCHUMER. I find with my staff, and I am blessed, I 

have a great, great staff, but most of them are half of my age and 

I mention all these cultural things, and they look at me like I am 

from another planet. Now, I know how it feels, how my parents felt 

when we mentioned things like the Beatles or Elvis Presley or 

something like that. 

Mr. LEVIN. Thank you. 

Chairman MCNULTY. Well, I think most of them have seen the 

clips of ‘‘Who’s on first.’’ 

[Laughter.] 

Chairman MCNULTY. If there are no further questions, I want 

to thank the senior Senator from New York. 

Senator SCHUMER. I thank you, Mr. Chairman, and all my colleagues. It is great to finally make it to the Committee on Ways 

and Means after all these years. 

[Laughter.] 

Chairman MCNULTY. Your staff has that editorial, Chuck. 

Senator SCHUMER. Great, thanks. 

Chairman MCNULTY. We would now like to go to our colleague 

from Massachusetts from Malden, Massachusetts, 7th District, the 

Honorable Ed Markey, who has been a real leader on this issue for 

a number of years. 

STATEMENT OF HON. ED MARKEY, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF MASSACHUSETTS 

Mr. MARKEY. Thank you, Mr. Chairman, very much and thank 

Mr. Johnson, and I thank each of you for inviting me here today. 

This is a very important issue. Mr. Barton of Texas and I have introduced legislation, the Social Security number Protection Act, in 

order to bring a halt to unregulated commerce in Social Security 

numbers. It does not establish an absolute prohibition on all commercial use of the number but it would make it a crime for a person to sell or purchase Social Security numbers in violation of rules 

promulgated the Federal Trade Commission. The Federal Trade 

Commission would be given the power to restrict the sale of Social 

Security numbers, determine appropriate exemptions, and to enforce civil compliance with the bill’s restrictions. 

Why is this legislation necessary? Let me share with you just one 

story. Several years ago, a man named Liam Youens was stalking 

a 21-year-old New Hampshire named Amy Boyer. Youens reportedly purchased Amy Boyer’s Social Security number from an Internet Web site for $45. Using this information, he was able to track 

her down, a process that he chillingly detailed on an Internet Web 

site that he named after his target. Finally, this demented stalker 

fatally shot Amy Boyer in front of the dental office where she 

worked. Afterward, he turned the gun on himself. 

The terrible tragedy of Amy Boyer’s murder underscores the fact 

that while the Social Security number was originally intended to 


ccoleman on DSK8P6SHH1PROD with HEARING
60 

be used only for the purposes of collecting Social Security taxes and 

administering the program’s benefit, it has over the years evolved 

into a ubiquitous national personal identification number, which is 

subject to misuse and abuse. The unregulated sale and purchase of 

these numbers is a significant factor in a growing range of illegal 

activities, including fraud, identity theft, stalkings and tragically 

even murders. If you do the simple Internet search in which you 

enter the words ‘‘Social Security numbers,’’ you will turn up links 

to dozens of Web sites that offer to provide you for a fee Social Security numbers for other citizens or to link up a Social Security 

number that you might have with a name, address and telephone 

number. 

Where are the data mining firms and private detection agencies 

obtaining these numbers? In all likelihood, they are accessing information from the databases of credit bureaus, financial service companies, data brokers or other commercial firms. Unfortunately, this 

has become a business. The privacy of all Americans has become 

a business. It becomes valuable information, all of these secrets 

about American families. While there is a purpose to which all of 

that information can be placed, it just should not be a commodity 

that can be used by anyone that feels that if they can combine 

enough of it, it becomes a product valuable to someone who wishes 

to purchase it. 

If someone actually obtains a Social Security number from one 

of these sites, they have a critically important piece of information 

that can be used to locate the individual, get access to information 

about the individual’s personal finances or engage in a variety of 

illegal activities. By bringing to a halt, unregulated commerce in 

Social Security numbers, this bill, and what you are doing, Mr. 

Chairman, will help to reduce the incidence of pretext in crimes, 

identity thefts, and other frauds or crimes involving misuse of a 

person’s Social Security number. We need to take action now if we 

are going to fully protect the public’s right to privacy by preventing 

the sale of Social Security numbers. 

Under the legislation which Mr. Barton and I have introduced, 

the Federal Trade Commission would be given rulemaking authority to restrict the sale of Social Security numbers, determine appropriate exemptions and to enforce civil compliance with the bill’s restrictions. On May 10th of this year, that legislation passed 

through the Energy and Commerce Committee. This, of course, is 

the other key Committee in terms of dealing with this issue, and 

you have to take action in a way that reflects your expertise on the 

whole issue of Social Security since that subject is here in the Committee on Ways and Means. But together we should find a way of 

affording real protection to American families on this legislation. 

Taking action now can help us to prevent further Amy Boyer’s from 

being victimized. 

But even at a lower level, this whole idea that all of our information is now out there for anyone to be able to crack is wrong. These 

data miners have no regard for the personal privacy of us as a society. We are reaching a point now, to be honest with you, where 

some kid today who is googling some sites right now, unless we figure out a way of ensuring that that information is destroyed, 15 

or 18 years from now, some employer will be saying, ‘‘Let’s go back 


ccoleman on DSK8P6SHH1PROD with HEARING
61 

and find out what that kid was googling to get some insight into 

who they are.’’ So all of this is becoming increasingly an important 

part of our society, to determine what kind of privacy we want to 

provide to American families. You are providing the leadership, Mr. 

Chairman, I thank you for that. 

[The prepared statement of Mr. Markey follows:] 

Prepared Statement of the Honorable Ed Markey 

a Representative in Congress from the State of Massachusetts 

Mr. Chairman, thank you for inviting me to testify at today’s hearing. 

The Gentleman from Texas (Mr. Barton), and I have introduced H.R. 948, 

the‘‘Social Security Number Protection Act,’’ in order to bring a halt to unregulated 

commerce in Social Security numbers. It does not establish an absolute prohibition 

on all commercial use of the number, but it would make it crime for a person to 

sell or purchase Social Security numbers in violation of rules promulgated by the 

FTC. The FTC would be given the power to restrict the sale of Social Security numbers, determine appropriate exemptions, and to enforce civil compliance with the 

bill’s restrictions. 

Why is this legislation necessary? Let me share with you just one story. About 

six years ago, a man named Liam Youens was stalking a 21-year old New Hampshire woman named Amy Boyer. Youens reportedly purchased Amy Boyer’s Social 

Security number from an Internet Web site for $45. Using this information, he was 

able to track her down, a process that he chillingly detailed on an Internet Web site 

that he named after his target. Finally, this demented stalker fatally shot Amy 

Boyer in front of the dental office where she worked. Afterwards, he turned the gun 

on himself. 

The terrible tragedy of Amy Boyer’s murder underscores the fact that while the 

Social Security number was originally intended to be used only for the purposes of 

collecting Social Security taxes and administering the program’s benefits, it has over 

the years evolved into a ubiquitous national personal identification number which 

is subject to misuse and abuse. The unregulated sale and purchase of these numbers 

is a significant factor in a growing range of illegal activities, including fraud, identity theft, stalkings and tragically, even murders. 

If you do a simple Internet search in which you enter the words ‘‘Social Security 

numbers,’’ you will turn up links to dozens of web sites that offer to provide you, 

for a fee, Social Security numbers for other citizens, or to link up a Social Security 

number that you might have with a name, address and telephone number. Where 

are the data-mining firms and private detective agencies that offer these services 

obtaining these numbers? In all likelihood, they are accessing information from the 

databases of credit bureaus, financial services companies, data brokers, or other 

commercial firms. 

If someone actually obtains a Social Security number from one of these sites, they 

have a critically important piece of information that can be used to locate the individual, get access to information about the individual’s personal finances, or engage 

in a variety of illegal activities. By bringing a halt to unregulated commerce in Social Security numbers, my amendment will help reduce the incidence of pretexting 

crimes, identity thefts and other frauds or crimes involving misuse of a person’s Social Security number. 

We need to take this action now if we are going to fully protect the public’s right 

to privacy by preventing sales of Social Security numbers. Under the Markey-Barton 

bill, the FTC would be given rulemaking authority to restrict the sale of Social Security numbers, determine appropriate exemptions, and to enforce civil compliance 

with the bill’s restrictions. As you know, on May 10th of this year, the Energy and 

Commerce Committee approved this legislation. The Speaker has now referred the 

bill to the Ways and Means Committee until July 20th, for consideration of such 

provisions that may fall within the Committee’s jurisdiction. I would strongly urge 

the Committee to approve this bill, so that this Congress can put in place stronger 

protections to restrict the purchase and sale of Social Security numbers. Taking action now will help us prevent a recurrence of tragedies like the Amy Boyer case, 

as well as the much more frequent incidences of misuse of the Social Security number to perpetrate identity thefts. 

I look forward to working with you, Mr. Chairman, and with the Chairman of the 

full Committee, Mr Rangell, and Ranking Members McCrery and Johnson as the 

Committee moves forward to consider this important legislation. 

f 


ccoleman on DSK8P6SHH1PROD with HEARING
62 

Chairman MCNULTY. Thank you, Mr. Markey. I want to thank 

you for your passionate activism on this issue for a long period of 

time. The part of your testimony I agree with the most is the time 

for talk should be over, and we should actually do something. I am 

in the process of putting together a proposal, which I am going to 

share with Mr. Johnson, hopefully get bipartisan support on this 

Committee, and then what I would like to do, Mr. Markey, is to 

talk to you and the gentleman from Ennis, Texas, Mr. Barton, and 

try to meld our proposals and get a united front and actually do 

something. 

Does anyone which to inquire of Mr. Markey? Yes, Ms. Schwartz? 

Ms. SCHWARTZ. Thank you. Good morning. Just a question, you 

leave the question of exemptions or possible appropriate use in 

your legislation rather open, basically to be set later. I understand 

that is a little bit of a difference between your legislation and Senator Schumer’s, is that correct? So, just to inquire about whether 

you think there are any appropriate uses that we ought to articulate in legislation and are you open to that? 

Mr. MARKEY. Yes, well, what Senator Schumer I think was referring to is the fact that, for example, in the financial services industry, we have to find a way where they can use some of these 

identifiers so you can use the first five or the last four or some 

combination and so that there is some use that it can be placed but 

it doesn’t unlock the whole key to who the individual is. We are 

actually working together on that for the financial services industry and others but only that a part of it is available, that the entire 

number is not made available unnecessarily because it is not necessary in order to provide an identification. All of us when we go 

down, and we punch in our little code when we are trying to take 

money out of the ATM machine, we only need four numbers, we do 

not need a nine number code. So, there is a way of doing it that 

can still protect the number. 

Ms. SCHWARTZ. Okay, and I think this question has somewhat 

been asked, I am somewhat new to this Committee but I understand there have been quite a few hearings on this and it feels like 

this is an issue that has been around, and we just have not taken 

action on. As you move forward as we do, as the Chairman does, 

it certainly seems that it is time for us to do something about it, 

to reach some understanding and agreement about this and provide 

some of this protection. All of us are asked for Social Security numbers all the time. We had an interesting hearing actually, the full 

Committee, just about people being appropriately afraid to share 

their Social Security number because of such failure to protect it 

once you give it out. So, I look forward to working with you and, 

of course, working with the Senate as well to actually move this 

along. Thank you. 

Chairman MCNULTY. Does anyone else wish to inquire? Mr. 

Markey, thank you very much for your testimony. We look forward 

to working with you on actually enacting some legislation. 

Mr. MARKEY. Thank you, Mr. Chairman, and I thank all of you 

very much. 

Chairman MCNULTY. We will now go to panel number two. Mr. 

Barton is on his way. When he gets here, because he is in another 

markup, we will accommodate him as well. Panel number two conVerDate Mar 15 2010 05:09 May 13, 2011 Jkt 063017 PO 00000 Frm 00066 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\63017.XXX GPO1 PsN: 63017

ccoleman on DSK8P6SHH1PROD with HEARING
63 

sists of The Honorable Patrick O’Carroll, inspector general of the 

Social Security Administration; Joel Winston, associate director, 

the Division of Privacy and Information Protection of the Federal 

Trade Commission; and Dan Bertoni, the director of Education, 

Work force, and Income Security of the GAO. 

I want to thank all of you for being here today. Your entire testimony will appear in the record. We ask you to summarize it in 

about 5 minutes so that we can have some time for some questions 

by the panel Members. If you could just keep your eye on the little 

indicator there, when the green light goes off and the amber light 

goes on, it is time to kind of wrap up. When the red light goes on, 

we would appreciate if you would try to conclude so we can get 

some questions in and also have time to get to the third panel. 

We will start with the inspector general. 

STATEMENT OF HON. PATRICK O’CARROLL, INSPECTOR 

GENERAL, SOCIAL SECURITY ADMINISTRATION 

Mr. O’CARROLL. Good morning, Chairman McNulty. Good 

morning, Mr. Johnson and Members of the Subcommittee. I want 

to thank you for your interest in protecting the Social Security 

number and for your interest in the work of the Office of the Inspector General. It is a pleasure to be here today to discuss this 

issue, which is at the heart of my office’s mission: protecting the 

Social Security number. I suggest that in order to do so the time 

has come to strike an appropriate balance between convenience and 

security. You have my comprehensive written statement, and now 

I want to discuss some of its highlights. 

Over the past decade, we have worked in partnership with the 

Social Security Administration and with this Subcommittee to 

bring about improvements in the process by which SSA issues Social Security numbers, new SSN cards and replacement cards. 

However, we believe the greatest vulnerability is the theft of the 

number. I assure you that it is harder than ever to obtain a SSN 

or a Social Security card based on fraudulent information or false 

pretense. Unfortunately, we cannot report the same degree of 

progress in protecting the SSN once it legitimately leaves SSA. Our 

audit and investigative work has taught us that the more SSNs are 

used unnecessarily, the higher the probability that they might become improperly disclosed and then used to commit crimes. We 

have highlight vulnerabilities and have suggested ways SSA can 

try to persuade organizations to limit their use of the number and 

better protect sensitive data. 

However, legislation may be required to compel these organizations to forego the convenience the SSN represents. One of our 

most expansive reviews involved Federal agencies’ controls over the 

access and use of SSNs by external entities. Recently, 15 Federal 

offices of inspectors general joined us with this review. We provided 

a comprehensive report with recommendations to improve the security the SSN at the Federal Government level. While we believe 

our work brought about improvements, recent OMB guidance 

makes it clear that the use of the SSN in Federal agencies will 

have to be further curtailed and security measures further improved. 


ccoleman on DSK8P6SHH1PROD with HEARING
64 

Of course, the Federal Government is not the only repository of 

SSN information. Schools, hospitals, businesses and state and local 

governments request SSNs for a variety of purposes, very few of 

which are actually required by law. Many of these entities use the 

SSN simply as a matter of convenience and do not provide adequate controls to protect the data. For example, our auditors have 

studied by universities’ and hospitals’ use of the SSN. While these 

institutions may have a legitimate use for the number with respect 

to certain functions, we found that once collected, the number was 

used for other purposes and was not always given the level of protection it deserves. 

In response to our audits, SSA’s outreach efforts and their own 

experiences with data loss, many universities are now moving away 

from the SSN as a student identifier. In an audit currently underway, we are disturbed to learn though that 43 states still collect 

Social Security numbers for students in kindergarten through 12th 

grade despite the fact that only three of these states have laws that 

require it. Some of these schools and school districts still print the 

student’s SSN on their attendance rosters, making it clear that 

they are placing convenience ahead of security. It may be the time 

for legislation barring the use of the SSN for all those but uses required by law. 

Our Social Security Number Integrity Protection Team encouraged banning the display of SSNs on driver’s licenses, and this is 

one example of legislation enacted as part of the Intelligence Reform and Terrorism Prevention Act of 2004 that we believe has 

made a significant difference in SSN integrity. We frequently remind people do not carry your Social Security card in your wallet, 

so having the SSN on their driver’s license undermine these efforts. 

In the same vein, consider the wisdom of SSNs displayed on the 

Medicare card or other forms of identification. So, the IRTPA provided a degree of assistance but more is needed. 

H.R. 745, introduced in the last Congress, and Senate bill 238, 

which was just discussed in the current Congress, each seek to address the display of SSNs and the sale of SSNs by information brokers, practices not currently prohibited by law. H.R. 948 would also 

prohibit the sale of SSNs under many circumstances, which would 

help reduce the largely unfettered trafficking in SSNs that are 

being done by information brokers. 

Legislative action to limit the sale and display of SSNs is critical 

to the security of the SSN, and I applaud these efforts just as I applaud the Subcommittee’s commitment to improving the integrity 

of the SSN protection for all. In summary, far from its original intent, the SSN has become a convenient tracking number, whose 

proliferation has significantly detrimental consequences. We cannot 

allow the public security to be jeopardized over a matter of convenience. 

Thank you. 

[The prepared statement of Mr. O’Carroll follows:] 

Prepared Statement of the Honorable Patrick O’Carroll, 

Inspector General, Social Security Administration 

Good morning, Chairman McNulty, Mr. Johnson, and members of the Subcommittee. Thank you for the invitation to be here today to discuss the Social Security number (SSN) and how we can better protect it and the American people. 


ccoleman on DSK8P6SHH1PROD with HEARING
65 

The Office of the Inspector General (OIG) at the Social Security Administration 

(SSA) came into being in 1995, with the implementation of the Social Security Independence and Program Improvements Act of 1994. As a new entity charged with preventing and detecting fraud, waste, and abuse in SSA’s programs and operations, 

we were well aware of the central role that the SSN played in American society, 

and the critical need for us to protect its integrity. With SSA, we have made significant strides towards that end since our early days. However, we are keenly aware 

that much more needs to be done. Today, I will provide you a brief history of our 

audit and investigative efforts, which have played an important role in strengthening SSN integrity—especially in the way these important numbers are assigned. 

But, more importantly, I will provide you with perspective on areas in which action 

is still needed—perhaps through additional legislation—to better protect SSNs from 

unnecessary collection and improper disclosure. I believe the American people expect and deserve our attention to address this vital matter. 

Well before 9/11, and even before identity theft became as significant an issue as 

it is today, we knew we had much work to do to strengthen SSN integrity. We were 

especially aware of the broad uses of SSNs throughout U.S. society and their importance to noncitizens while they are in the U.S. We also recognized that SSNs are 

the cornerstone of SSA’s programs and, therefore, before we could turn too much 

of our attention outward—to the use and misuse of SSNs—we first needed to make 

sure that everything was in order within SSA. As a result, much of our early SSN 

work was in the area of enumeration—the process by which SSA assigns SSNs. If 

SSA’s enumeration processes were not sound, no amount of improvement to the use 

and security of the SSN after it was issued would be of much value. 

Since 1999, when we issued a Management Advisory Report emphasizing the importance of proper SSN assignment and use, we have worked closely with SSA to 

improve controls in the enumeration process. Based on our recommendations, collaborative efforts and new legislative requirements, SSA has improved the enumeration at birth and enumeration at entry programs, heightened the awareness of SSA 

employees to fraudulent identification documents presented with applications for 

SSNs, tightened controls over the issuance of replacement Social Security cards, and 

otherwise made it much more difficult to obtain a valid SSN through the use of a 

fraudulent application. 

During this period, my predecessors testified before this Subcommittee and other 

Committees and Subcommittees of both houses of Congress on SSN-related issues 

many times, presenting the results of our work, responding to requests from Members, proposing legislation, and seeking ways to further improve SSN integrity. 

The September 11 attacks underscored the need to continue those efforts, but 

with respect to SSNs, did not teach us anything we did not already know about the 

critical role of the SSN in our society. In the months following 9/11, we worked with 

the FBI and other law enforcement agencies to provide critical information, and 

began a series of SSN-based Homeland Security initiatives. These projects sought 

to ensure, through review of SSNs and other information, that individuals with access to critical infrastructure sites such as airports, seaports, nuclear power plants, 

and similar locations, were who they claimed to be, and not imposters who would 

do us harm. 

Even while working on Homeland Security matters, our investigators continued 

their day-to-day work on individual SSN misuse cases, bringing to justice scam artists, identity thieves, counterfeit document artists, and other criminals whose tool 

of the trade was the purloined SSN. On an annual basis, we receive about 10,000 

allegations of SSN misuse a year, and investigate approximately 1,500 criminal 

cases of misuse. After years of increases, these numbers have now held steady for 

several years, indicating that not only our investigative work, but also our audit 

work, is having a significant impact. 

Having completed numerous audits that helped SSA strengthen its enumeration 

processes, in more recent years our auditors have begun to address the far more 

challenging issue of SSN misuse. While SSA can implement controls to prevent the 

improper assignment of SSNs, it has very few mechanisms to curb the improper— 

or simply the unnecessary—use of an SSN. Our audit and investigative experiences 

have taught us that the more SSNs are used unnecessarily, the higher the probability that these numbers could be improperly disclosed and used to commit crimes 

throughout society. We read about these occurrences in the newspaper every day, 

but we’ve yet to develop meaningful ways to stem the tide. 

As I’ll discuss in a moment, our recent audit work has highlighted vulnerabilities 

and suggested some ways in which SSA can try to persuade organizations that use 

SSNs to limit this use and better protect this sensitive information. To some extent, 

these efforts, along with the users’ own experiences with improper disclosures, have 

convinced some organizations to do as we and SSA have suggested. However, beVerDate Mar 15 2010 05:09 May 13, 2011 Jkt 063017 PO 00000 Frm 00069 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\63017.XXX GPO1 PsN: 63017

ccoleman on DSK8P6SHH1PROD with HEARING
66 

cause it is such a convenient and unique number, and change may be costly, others 

appear to discount the risk and continue on with business as usual. To convince 

these parties, we believe SSA needs more help. Specifically, we believe the time has 

come to consider legislation limiting the collection and use of SSNs to those purposes mandated by Federal law, or otherwise reducing the use of SSNs as convenient identifiers. 

In 2002, the Federal inspector general community joined with us to look more 

closely at one high-risk issue regarding SSNs: agencies’ controls over access, disclosure, and use of SSNs by external entities, such as contractors, within their respective agencies. A total of 15 Offices of Inspector General participated in this effort, 

each conducting an audit within their respective Agencies. We combined our results 

and provided a comprehensive report, which included recommendations to improve 

the security of the SSN at the Federal Government level.While we believe that our 

work, and the work of our fellow inspectors general, brought about improvements 

in SSN security and heightened awareness of the issue, there is more to be done. 

Recent OMB guidance makes it clear that at least at the Federal level, uses of the 

SSN must be curtailed, and security measures enhanced. We will continue to monitor the Federal sector’s progress in accomplishing this mandate. 

Of course, the Federal Government is not the only source of SSN information. As 

I’m sure you’re aware, schools, businesses, and State and local governments request 

SSNs for a multitude of purposes—very few of which are required by law. Rather, 

many of these organizations use the SSN as an identifier simply because it is convenient. For example, our auditors have looked at the use of SSNs by universities 

and hospitals as student and patient identifiers, respectively. While both of these 

types of organizations may have had some reason for collecting SSNs, such as financial aid or Medicare coverage, we found that once collected, the number was used 

too frequently for other purposes and not always given the level of protection necessary. 

In response to our audits, SSA outreach, and their own experiences with data exposures, many universities are moving away from using SSNs as student identifiers. 

However, in an audit currently underway, we were disturbed to learn that 43 States 

collect the SSNs of students in kindergarten through 12th (K–12) grade. In only 

three of these States is the collection of these numbers required by law. The No 

Child Left Behind Act of 2001 requires that each State implement an accountability 

program that measures the progress of students and schools through the collection 

and analysis of data. However, the law does not require that States use SSNs to 

identify and track students. Rather, we believe that some K–12 schools use SSNs 

as a matter of convenience. For example, while we did not perform a statistical sample, we know of some schools and districts that still print the students’ SSNs on attendance rosters. We would suggest that the security of 

individuals’ personal information—in this instance, the personal information of children—not take a back seat to administrative convenience. For 

the 2004/2005 school year, the National Education Association estimated 

that there were more than 48 million K–12 students in over 15,000 school 

districts across the country. We believe that the collection and use of SSNs 

without proper controls is a huge vulnerability for this young population. 

Recent data indicate the number of children under age 18 whose identities 

have been stolen is growing. This is particularly troubling given that some 

of these individuals may not become aware of such activity until they 

apply for a credit card or student loan. 

We also found that State and local governments use the SSN as an identifier for 

other programs, such as prescription drug monitoring, when other identifiers such 

as drivers license numbers might be more appropriate. Additionally, these entities 

don’t always provide sufficient protection of this data. 

We even conducted an audit that looked at the access prisoners are sometimes 

given to SSNs while doing work in prison on State records or other documents containing SSNs and other personal information. The possibility of giving a convicted 

identity thief access to the tools of his or her trade while in prison is certainly 

alarming. 

I’m proud of the work that has been done, and continues to be done, by both our 

Office of Audit and our Office of Investigations, but our focus on SSN integrity does 

not stop there. Several years ago, in order to keep track of our many-faceted effort 

to protect the SSN, we formed the Social Security Number Integrity Protection 

Team, or SSNIPT. That group, comprised of attorneys, auditors, and investigators, 

has had its own quiet—but important—successes. It was in part the efforts of the 

SSNIPT team that led to the eradication of the display of SSNs on Selective Service 

mailings and the Thrift Savings Plan website—two practices in which the Federal 

Government was itself putting the SSN at risk. The team has also worked to proVerDate Mar 15 2010 05:09 May 13, 2011 Jkt 063017 PO 00000 Frm 00070 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\63017.XXX GPO1 PsN: 63017

ccoleman on DSK8P6SHH1PROD with HEARING
67 

pose legislation, which was ultimately enacted as part of the Intelligence Reform 

and Terrorism Prevention Act of 2004 (IRTPA), to eliminate the practice of displaying SSNs on drivers licenses. All of our exhortations over the years aimed at 

getting Americans to stop carrying their Social Security cards in their wallets would 

be of little value if the one document they were required to carry also displayed 

their SSN. 

The OIG will not waver in our commitment to protect the integrity of the Social 

Security number through our timely audit, investigative, and other work, and we 

welcome Congress’ help. Legislation has been, and will always be, a key factor in 

our ability to protect the SSN and protect the American people. Legislation has, to 

some degree, improved enforcement mechanisms in this area (the Identity Theft 

Penalty Enhancement Act), but legislation that would limit the display of SSNs on 

public documents or eliminate the sale of SSNs by information brokers has not yet 

been passed, with the exception of the IRTPA provision concerning drivers’ licenses. 

Similarly, no law has been passed to address the unnecessary collection of SSNs by 

schools, hospitals, or other entities that use this number as a matter of convenience 

but fail to adequately protect this personal information. 

There are, however, a number of bills that have been introduced. In the last Congress, H.R. 1745, as well as the current Congress’ S. 238, each seek to address both 

the display and the sale of SSNs, and H.R. 948, while silent on the display of SSNs, 

would also prohibit their sale under many circumstances. Any legislative provisions 

that reduce the display of SSNs or limit or eliminate trafficking in SSNs by information brokers and others would be of great help to our efforts. 

It is important, however, not only to stop intentional criminal behavior, but to 

place an onus on those who use the SSN—either because they are required to do 

so by law, or because the SSN is a convenient identifier—to protect the information 

they are holding. 

Consider an investigation we recently concluded in which several people were convicted of SSN misuse on a large scale. The primary subject of the investigation was 

a manufacturer of fraudulent identification documents that he created using real 

names and SSNs that his co-conspirators obtained. The documents were then used 

to defraud banks, businesses, and individuals out of more than half a million dollars. The names, SSNs, and other data were stolen from banks and from a hospital 

where security measures were obviously inadequate to prevent or detect the theft. 

This individual and his co-conspirators are being criminally prosecuted, but criminal prosecution is not always an option. One proposal we have made in the past 

is that the OIG’s Civil Monetary Penalty authority be extended to include SSN misuse. Providing the authority to penalize those who misuse SSNs but are not criminally prosecuted, or to penalize institutions that collect, but fail to protect, SSNs 

could create a strong deterrent and an effective tool. 

The OIG has proven its ability to administer such a program through its administration of the existing provisions of Sections 1129 and 1140 of the Social Security 

Act—and we are prepared to take on this new challenge. 

Indeed, we are faced with new challenges on a daily basis, as we constantly find 

new ways to close gaps in the SSN’s protection. We are currently examining the 

practice of assigning SSNs to noncitizens who will only be in the United States for 

a few months—but are allowed to obtain an SSN that will be good forever. Consider, 

for example, the practice of allowing noncitizens who enter the country with a fiance ́

visa to obtain an SSN. While deciding whether they will marry, these noncitizens 

are allowed to stay in the United States for 3 months—after which time they must 

marry, leave the country or apply for a new immigration status with DHS. By approving their request for an SSN during this 3-month period, we might be giving 

those who have no intentions to marry a much-needed tool for overstaying their 

visas. We believe a wiser course of action would be to approve the SSN application 

after the marriage has occurred, but we may need a legislative remedy to implement 

such a policy. Additional opportunities exist to restrict SSN access to other populations that might take advantage of similar programs. 

We’ve also just undertaken an audit concerning the display of the SSN on Medicare cards, a document that many Americans carry in their wallets. I mentioned 

earlier our attempts to remove the SSN from drivers’ licenses; while the use of the 

SSN in the Medicare program may be necessary, the display of the SSN on the card 

is something we’ll be taking a critical look at. 

As we have stated before this Subcommittee on many occasions, the SSN was 

never intended to do more than track a worker’s earnings and pay that worker benefits. As the uses of the SSN have expanded over the decades, through acts of Congress and through the SSN’s adoption simply as a matter of convenience, its value 

has increased as a tool for criminals. The Social Security card itself, which states 

on its face that it is not to be used for identification, is frequently cited as needing 


ccoleman on DSK8P6SHH1PROD with HEARING
68 

improvement. But spending billions of dollars to try and stay one step ahead of 

counterfeiters is not the answer. The answer lies in doing everything we can to ensure the integrity of the enumeration process; limit the collection, use, and public 

display of the SSN; encourage the protection of the SSN by those who use it legitimately; and provide meaningful sanctions for those who fail to protect it or who misuse it themselves. 

We will continue our audit work in these areas, such as the fiance ́ visa audit I 

just mentioned. We will continue our investigations, such as those I’ve described 

today. We will continue working to ensure Homeland Security, as reflected in the 

role we played in the recent arrests of terrorists planning an attack on Fort Dix. 

We will continue to seek the prosecution of employers or others who knowingly provide false SSNs to employees otherwise not authorized to work in the United States, 

as we did just last week in the Pacific Northwest, where a staffing agency was allegedly providing illegal workers with fraudulent SSNs. And we will continue to work 

with SSA and with this Subcommittee in hearings such as this, and in seeking legislation to make our efforts still more effective. 

Thank you, and I’d be happy to answer any questions. 

f 

Chairman MCNULTY. Thank you, Mr. O’Carroll. In accordance 

with my previous announcement, we want to accommodate Congressman Barton, who is in another markup. I want to thank you, 

Joe, for making the time to come over and at this time, I would 

like to recognize the gentleman from Ennis, Texas, Congressman 

Barton. His entire testimony will appear in the record, and we now 

invite him to summarize his testimony. 

STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF TEXAS 

Mr. BARTON. Thank you, Chairman McNulty. I apologize for my 

tardiness. We do have a full Committee markup upstairs on nine 

bills to reauthorize and approve the Food and Drug Administration. I did not know Ways and Means had a hearing room in the 

Rayburn Building. I headed out to the Longworth Building, and I 

had to be turned around and brought back here, but this is pretty 

nice. We can make a trade or something. I also thank Ranking 

Member Johnson for his many courtesies over the years. 

——I want to thank this Subcommittee for holding this important hearing on the vulnerability of the Social Security number and 

how we should protect our Social Security number. Twenty years 

ago, nobody gave a second thought to showing a Social Security 

number on a driver’s license. Now times have changed. In the 

Internet age, the Social Security is the key to our personal, medical 

and financial history. If we do not protect it, other people can 

unlock our lives and steal both our money, our reputations and 

sometimes our identities. The thought of a universal identifier, like 

the Social Security number, falling into the hands of an identity 

thief strikes a chord of fear in every consumer in this country, as 

it well should. 

The Federal Government is partly to blame for allowing Social 

Security numbers to morph into something so crucial. When Social 

Security was being invented, they needed a way to uniquely identify every participant. Since 1936, the government has issued 

roughly 420 million Social Security numbers. No one then imagined 

the ubiquitousness and the critical role that these numbers would 

assume because records were on paper, credit was a luxury for the 

elite, and identity theft was literally something out of science ficVerDate Mar 15 2010 05:09 May 13, 2011 Jkt 063017 PO 00000 Frm 00072 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\63017.XXX GPO1 PsN: 63017

ccoleman on DSK8P6SHH1PROD with HEARING
69 

tion. Unfortunately, a Social Security number now can be used to 

wreck a person’s finances. Our Social Security numbers are everywhere. They are vulnerable to abuse and the government largely 

has failed to do anything about it. 

Last year, I applied for a cell phone at Radio Shack. I had to give 

my Social Security number to three different people in the course 

of getting that cell phone within a 30 minute period. That is simply 

unacceptable in my opinion. 

Technology is part of the problem and fortunately technology is 

beginning to offer solutions. Businesses which use Social Security 

numbers as commercial identifiers can often authenticate customers effectively and in a flash with other identifiers. Moreover, 

there are numerous situations in which no benefit exists for the 

business to require a Social Security number at all. I think some 

of them simply do it out of habit. Once a business does have your 

Social Security number, can they share it? Can they sell it? For 

that matter, can a business buy your Social Security number from 

another business? None of that to me seems like a very good idea, 

and I hope this Subcommittee would agree with that. These are important questions and the answers are even more important. 

Erasing the link between our Social Security number and our 

personal information I think and Congressman Markey thinks is 

the best idea. Lacking that, there are a few easy steps that each 

of us can take to cut the risk of our number falling into the wrong 

hands. H.R. 948, the Social Security Number Protection Act, is a 

good start. This bill accomplishes something so simple that it is 

hard to believe that it has not already been done. It makes the sale 

and purchase of our Social Security number illegal. Buying and 

selling people’s Social Security numbers I think is intolerable in a 

modern society. Internet information brokers should not have the 

ability to sell information to anyone who walks in the front door 

and plunks down a few dollars. As additional protection, H.R. 948 

restricts the display of Social Security numbers online and prohibits requiring your number on any identification or Membership 

card. 

I am well aware of the benefits Social Security numbers provide 

in preventing fraud and protecting me from being a victim. Despite 

comments from the critics, the intent of H.R. 948 does not affect 

legitimate uses of Social Security numbers. The Federal Trade 

Commission has given rulemaking authority to exempt honest purposes from the prohibitions that protect consumers. 

Mr. Chairman, Ranking Member, and Members of this Subcommittee, the Energy and Commerce Committee, on which I serve 

and Congressman Markey serves, voted unanimously to report H.R. 

948 last month. That does not happen often on the Energy and 

Commerce Committee, let me tell you. Last night, we were up here 

until 11 o’clock and passed six bills, all on a party line vote, so an 

unanimous consent report of H.R. 948 is an accomplishment. I hope 

that your Committee will now take up either the bill that Mr. Markey and I are sponsoring or discharge it so that we can take this 

important step in protecting our consumers’ identities and their 

privacy. 

With that, Mr. Chairman, and Members of the Subcommittee, I 

yield back. 


ccoleman on DSK8P6SHH1PROD with HEARING
70 

Chairman MCNULTY. Thank you, Mr. Barton, and thank you 

for your many years of work on this issue. I think most people have 

their own personal stories about being asked for their Social Security number. I have a similar one to yours. It was a retail purchase. 

My wife and I were out a few years ago, and we were buying a refrigerator. We made selection and filled out the paperwork, and I 

was paying by personal check. I know you have additional ID, so 

I had my driver’s license, which is a picture ID, and the driver’s 

license number, which is not the Social Security number, and I 

wrote that on the check and gave it to the cashier. She then asked 

me for my Social Security to buy a refrigerator. Now, the difference 

between you and me is I refused. 

Mr. BARTON. Good for you. 

Chairman MCNULTY. I still got the refrigerator, but how many 

people are in circumstances like that and they just freely give their 

Social Security number? So, I think before we even get to legislation, we have a tremendous job ahead of ourselves in educating 

people about the proper circumstances under which they should 

share their Social Security number. Thank you for that news about 

reporting the bill out of the Committee. Mr. Johnson reminded me 

that in the last Congress, we reported out a bill out of Committee 

on Ways and Means but for some reason or another, these bills 

never get enacted into law. I mentioned to your colleague, Ed Markey, and to Senator Schumer earlier that while everybody is grateful for what everyone has done in the past in focusing on this issue, 

now is the time we need to actually do something, to pass something and get enacted into law. I want to thank you for your continued commitment to see to it that that happens. 

Does any Member wish to inquire of Congressman Barton? Ms. 

Tubbs Jones? 

Ms. TUBBS JONES. Just an inquiry, Congressman Barton. I 

was reading a newspaper article from the Cleveland Plain Dealer, 

which is my hometown newspaper, and what happened in the state 

of Ohio was that an intern had a copy of a disk of a number of people who were receiving, I guess it was back-up checks and so it 

says that thousands of state workers rushed to sign up for identity 

fraud protection after learning their personal information was on 

a back-up computer tape stolen from an intern’s car. There are all 

kinds of crazy things that happen that expose people’s information 

to possible identity theft. 

For the record, Mr. Chairman, I seek unanimous consent to have 

two articles from the Plain Dealer entered into today’s record. 

Chairman MCNULTY. Is there objection? The Chair hears none, 

so ordered. 

The first provided article follows: 


ccoleman on DSK8P6SHH1PROD with HEARING
71 

f 

The second provided article follows: 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 48 here 63017.048
72 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 49 here 63017.049
73 

f 

Ms. TUBBS JONES. It ended up that the state decided that they 

would hire a company to provide identity theft protection for all 

these workers whose information had been lost in the process. But 

you think about it, this is a legitimate use of the Social Security 

number but being put in jeopardy as a result of some stupid activity, or maybe I should not say ‘‘stupid,’’ someone not thinking about 

where they kept up with information on behalf of workers. Having 

coming from a criminal justice background, as a prosecutor, as a 

judge, sometimes I think we try and implement laws to protect a 

certain situation, it really may not be the criminal justice system 

that we need to implement but having to safeguard this place to 

make appropriate conduct for the use of information. I am like you, 

I have to call into the bank to get my information, I have to give 

them my full Social Security number to get the $2 that I have in 

the bank. But it is really kind of a crazy situation. 

Mr. BARTON. Can I borrow a dollar? 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 50 here 63017.050
74 

Ms. TUBBS JONES. Can you borrow a dollar? Let’s see, maybe 

I can help you out. 

Well, I want to thank you for the work that you are doing in this 

area and like to be supportive. Thank you, Mr. Chairman. 

Chairman MCNULTY. Does anyone else wish to inquire? If not, 

we wish to thank Congressman Barton. Thanks, Joe. 

Mr. BARTON. Thank you, Mr. Chairman. 

Chairman MCNULTY. That concludes the testimony of panel 

one. We will continue on panel two with Mr. Winston. 

STATEMENT OF JOEL WINSTON, DIRECTOR OF PRIVACY AND 

INFORMATION PROTECTION, FEDERAL TRADE COMMISSION 

Mr. WINSTON. Thank you, Chairman McNulty, Ranking Member Johnson, and Members of the Subcommittee. I am Joel Winston, associate director of the Division of Privacy and Identity Protection at the Federal Trade Commission. I appreciate the opportunity to testify today about Social Security numbers and identity 

theft. 

As we have heard, identity theft afflicts millions of Americans 

every year. One telling example illustrates the damage it can 

cause. A few months ago, a consumer from Los Angeles contacted 

the FTC Identity Theft Hotline. He reported that his employer had 

suffered a data breach in which the consumer’s employee records, 

including his Social Security number, had been compromised. Soon 

thereafter, an identity thief opened five credit card accounts in the 

consumer’s name, resulting in thousands of dollars of unauthorized 

charges. But the thief did not stop there, he also emptied the consumer’s checking account of almost $2,000. In the first month or 

so after discovering the theft, this consumer spent hundreds of 

hours trying to repair the damage. 

The Social Security number is often the key item of information 

that an identity thief needs to commit his crime. It is therefore critical to make SSNs less accessible to identity thieves. At the same 

time, it is important to remember that SSNs serve legitimate and 

useful purposes in our economy, including their widespread use to 

match individuals to information about them. For that reason, any 

restrictions on SSNs should be carefully tailored to reduce disclosures or uses that are unnecessary without inadvertently eliminating or burdening those that are necessary. 

Although SSNs sometimes are used for legal compliance or essential business purposes, too often they are used simply as a matter of convenience or habit. For example, some organizations still 

use SSNs on employee badges or ID cards when a different and 

less sensitive identifier would work just as well. 

The President’s Identity Theft Task Force, in its report issued 

this April, concluded that, ‘‘More must be done to eliminate unnecessary uses of SSNs, both in the public sector and the private sector.’’ The government has already begun to address its own SSN 

policies. This week, for example, the Office of Personnel Management issued guidance to all Federal agencies on limiting the collection and use of SSNs for human resource purposes. With respect 

to the private sector, the Task Force calls for a comprehensive review of SSN usage, and this review has already begun. We will be 

looking at the extent to which SSN uses are driven by business neVerDate Mar 15 2010 05:09 May 13, 2011 Jkt 063017 PO 00000 Frm 00078 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\63017.XXX GPO1 PsN: 63017

ccoleman on DSK8P6SHH1PROD with HEARING
75 

cessity and what the benefits and costs would be of restricting 

them. 

In the meantime, the Federal Trade Commission has taken, and 

is continuing to take aggressive action to address identity theft. 

The first priority is prevention, stopping thieves from obtaining 

SSNs or other sensitive information. Businesses must be vigilant 

in protecting sensitive data they collect from consumers. To re-enforce this message, the Commission has brought 14 law enforcement actions against businesses that fail to reasonably safeguard 

consumers’ personal information. 

Consumers, too, must be more careful about guarding their information and so consumer education is a key part of our strategy. 

The Commission reaches out to the public in a variety of ways, including our identity theft Web site and hotline, and our highly successful multi-media national education campaign named, ‘‘Deter, 

Detect, Defend.’’ 

But restrictions on SSN usage and disclosure and better data security are not enough. Some sensitive information inevitably will 

find its way to identity thieves. Therefore, we must make it more 

difficult for criminals to use SSNs once they obtain them. Creating 

better methods of authenticating consumers would further this 

goal. 

When a thief steals personal data, he can use it to open an account only if he can convince the account provider that he is the 

person whose data he stole. In April, the Commission hosted a 

workshop on authentication. We learned some encouraging new 

techniques to authenticate consumers that are being developed and 

deployed, and we discussed how the government and private sector 

can encourage their adoption. 

I would like to turn now briefly to the issue of legislation. As we 

have heard today, several bills have been introduced in Congress 

over the past few years that would restrict SSNs in various ways. 

Generally, these bills would prohibit the display, purchase, sale or 

use of SSNs, subject to several exceptions, such as for law enforcement, public health and credit reporting purposes. The Commission 

has not taken a formal position on these bills, but I believe that 

they have an appropriate objective: to eliminate gratuitous SSN 

transfers or use while recognizing that there are certain necessary 

and legitimate transfers or uses that should be permitted. The 

challenge is to draw the right line. As Mr. Johnson said, it is a 

complex balancing act. 

As I stated earlier, the Task Force is in the process of developing 

a comprehensive record on the factors that impact on where that 

line might be drawn. We support the idea that rulemaking authority be granted to the appropriate Federal agencies to implement 

and flesh out these exceptions, and I note that H.R. 948 gives that 

authority to the FTC. 

Identity theft is one of the most important consumer protection 

issues of our time and must be attacked at every angle. The Commission will continue to place a high priority on preventing this 

crime and helping victims to recover. We look forward to continuing our work with Congress in this effort, and I would be 

happy to answer any questions that you might have. 

The prepared statement of Mr. Winston follows:] 


ccoleman on DSK8P6SHH1PROD with HEARING
76 

Prepared Statement of Joel Winston, Director, Division of 

Privacy and Information Protection, Federal Trade Commission 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 51 here 63017.051
77 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 52 here 63017.052
78 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 53 here 63017.053
79 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 54 here 63017.054
80 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 55 here 63017.055
81 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 56 here 63017.056
82 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 57 here 63017.057
83 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 58 here 63017.058
84 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 59 here 63017.059
85 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 60 here 63017.060
86 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 61 here 63017.061
87 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 62 here 63017.062
88 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 63 here 63017.063
89 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 64 here 63017.064
90 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 65 here 63017.065
91 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 66 here 63017.066
92 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 67 here 63017.067
93 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 68 here 63017.068
94 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 69 here 63017.069
95 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 70 here 63017.070
96 

f 

Chairman MCNULTY. Thank you, Mr. Winston. 

Mr. Bertoni. 

STATEMENT OF DAN BERTONI, EDUCATION, WORKFORCE, 

AND INCOME SECURITY, GOVERNMENT ACCOUNTABILITY 

OFFICE 

Mr. BERTONI. Good morning, Mr. Chairman, and Members of 

the Subcommittee. I am pleased to be here to discuss ways to protect the Social Security number, which was originally created as a 

means to track worker earnings and administer retirement benefits. Over time, the SSN has evolved beyond its intended purpose, 

become the identifier of choice and is now used for myriad non-Social Security purposes. This is significant because a person’s SSN, 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 71 here 63017.071
97 

along with name and date of birth, are key pieces of information 

used to commit identity theft. Potential for misuse of the SSN has 

raised concerns about how the public and private entities are obtaining, using and protecting SSNs. My testimony today is based 

on our prior work, as well as the report issued today for Senator 

Schumer and will focus on describing SSN use in the public and 

private sector, as well as vulnerabilities that remain to protecting 

them. 

In summary, a number of Federal laws and regulations authorize 

or require agencies at all levels of government to collect SSNs to 

administer their programs. For example, the Debt Collection Act 

1996 requires any individual doing business with the Federal Government or applying for a grant or service to furnish a valid SSN. 

Certain state and local government agencies also collect SSNs as 

part of their responsibility for maintaining public records. In a 

prior work, we reported that 41 states and the District of Columbia 

display SSNs in public records, as well as 75 percent of all U.S. 

counties. SSNs were most often found in court and property 

records. 

As noted earlier, in our report issued today, we found that the 

Internal Revenue Service and the Department of Justice are the 

only Federal agencies commonly providing records containing SSNs 

to state and local recordkeepers. IRS and Justice provide thousands 

of property liens annually to recordkeepers in which they have traditionally included full SSNs for identity verification purposes. 

Historically, access to public records occurred by visiting local offices and search through electronic or paper records. However, 

today, more recordkeepers provide potentially unlimited access to 

sensitive information through bulk sales to private companies and 

to the public via the Internet. 

Some states, however, have begun to restrict how they display or 

provide access to SSNs in such records. For example, Florida counties we recently visited are currently using special software to 

search for and remove millions of SSNs and other sensitive information from their records. 

In the private sector, information re-sellers, credit bureau reporting agencies and health care organizations collect SSNs from various sources and use this information primarily for identification 

verification purposes. Large information re-sellers obtain SSNs 

from various public records, such as bankruptcy notices, tax liens, 

civil judgments and property transactions. In addition to their own 

direct use of SSNs, entities such as banks, securities firms, telecommunications firms and tax preparers also share this information—SSN information with third party contractors who perform 

services for them. 

Although new Federal and state laws have helped restrict SSN 

use and display, vulnerabilities remain. For example, we are concerned that SSNs are still displayed on certain federally-issued 

cards. In particular, the Center for Medicare and Medicaid Services 

has not yet acted to remove SSNs from over 40 million Medicare 

cards despite our report citing this weakness. We are also concerned that current Federal laws restricting the sale of SSNs and 

other personal information applied to certain types of entities, such 


ccoleman on DSK8P6SHH1PROD with HEARING
98 

as financial institutions, but not to information re-sellers, who are 

obtaining and using the same sensitive data. 

However, recently proposed legislation, the Social Security Protection Act of 2007, as discussed by Mr. Markey earlier, if enacted, 

may help address this vulnerability by placing additional restrictions on the sale and purchase of SSNs. H.R. 1745, which was introduced in the last Congress, also includes provisions to address 

this issue. 

Further, Federal oversight regarding the sharing of SSNs with 

contractors is less stringent for the telecommunications and tax 

preparation industries, which poses potential additional challenges 

for protecting SSNs and other sensitive data in those industries. 

Finally, although Federal agencies have begun truncating SSNs 

on documents provided to state and local recordkeepers, different 

truncation methods between the public and private sectors have 

implications for identity theft. Current Federal lien records display 

the last four digits of SSNs, while private re-sellers often provide 

the first five digits of the SSN to the customer. Consequently, with 

minimal effort, our analysts were able to electronically access private sector databases, compare this information to Federal liens, 

and reconstruct full identity and SSN information for 10 liens for 

10 individuals from 10 states. The entire process took less than an 

hour or about an hour or about 6 minutes per SSN and it was all 

done from their desks. In light of this finding, we continue to urge 

the Congress to consider enacting a single truncation standard or 

assign an agency to do so. 

Mr. Chairman, this concludes my remarks. I will be happy to answer any questions that you or other Members of the Subcommittee may have. Thank you. 

[The prepared statement of Mr. Bertoni follows:] 

Prepared Statement of Dan Bertoni, Director, Education, 

Workforce, and Income Security, Government Accountability Office 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss ways to better protect the Social Security 

number (SSN), which was originally created as a means to track workers’ earnings 

and eligibility for Social Security benefits. Since its creation, the SSN has evolved 

beyond its intended purpose to become the identifier of choice for public and private 

sector entities and is now used for myriad non-Social Security purposes. This is significant because a person’s SSN, along with name and date of birth, are the key 

pieces of personal information used to perpetrate identity theft. Consequently, the 

potential for misuse of the SSN has raised questions about how private and public 

sector entities obtain, use, and protect SSNs. 

Over the last several years, the Congress and some states have recognized the importance of restricting the use and display of SSNs by both the public and private 

sectors. As a result, federal and state laws have been enacted that to some degree 

protect individuals’ personal information, including SSNs. However, the continued 

use of and reliance on SSNs by public and private sector entities, as well as the 

potential for their misuse, underscore the importance of identifying areas that can 

be further strengthened. GAO has issued a number of reports and testified before 

this Subcommittee about the various aspects of SSN use in both the public and private sectors. Accordingly, my remarks today will focus on describing the (1) use of 

SSNs by government agencies, (2) use of SSNs by the private sector, and (3) 

vulnerabilities that remain to protecting SSNs. 

In summary, a number of federal laws and regulations require agencies at all levels of government to frequently collect and use SSNs for various purposes. For example, agencies frequently collect and use SSNs to administer their programs, link 

data for verifying applicants’ eligibility for services and benefits, and conduct program evaluations. In the private sector, certain entities, such as information resellers, collect SSNs from public sources, private sources, and their customers and 


ccoleman on DSK8P6SHH1PROD with HEARING
99 

use this information for identity verification purposes. In addition, banks, securities 

firms, telecommunication firms, and tax preparers sometimes share SSNs with their 

contractors for limited purposes. Although laws at both the federal and state levels 

have helped to restrict SSN use and display, and both public and private sector entities have taken some steps to further protect this information, several 

vulnerabilities remain. For example, federal laws addressing SSN use and collection 

in the private sector continue to leave SSNs maintained by certain industries vulnerable to misuse by identity thieves and others. 

For this testimony, we primarily relied on information from our prior reports and 

testimonies that address public and private sector use and protection of SSNs. 

These products were issued between 2002 and 2006 and are listed in the Related 

GAO Products section at the end of this statement. We conducted our reviews in 

accordance with generally accepted government auditing standards. 

Background 

The Social Security Act of 1935 authorized the Social Security Administration(SSA) to establish a record-keeping system to manage the Social Security program, which resulted in the creation of the SSN. Through a process known as ‘‘enumeration,’’ unique numbers are created for every person as a work and retirement 

benefit record. Today, SSA issues SSNs to most U.S. citizens, as well as non-citizens 

lawfully admitted to the United States with permission to work. Because the SSN 

is unique for every individual, both the public and private sectors increasingly use 

it as a universal identifier. This increased use, as well as increased electronic record 

keeping by both sectors, has eased access to SSNs and potentially made this information more vulnerable to misuse, including identity theft. 

Specifically, SSNs are a key piece of information used to create false identities for 

financial misuse or to assume another individual’s identity. Most often, identity 

thieves use SSNs belonging to real people. However, the Federal Trade Commission’s (FTC) identity theft victim complaint data has shown that only 30 percent of 

identity theft victims know how thieves obtained their personal information. The 

FTC estimated that over a 1-year period, nearly 10 million people discovered they 

were victims of identity theft, translating into estimated losses of billions of dollars. 

Federal Laws Affecting SSN Use and Disclosure 

There is no one law that regulates the overall use of SSNs by all levels and 

branches of government. However, the use and disclosure of SSNs by the Federal 

Government is generally restricted under the Privacy Act of 1974. Broadly speaking, 

this act seeks to balance the government’s need to maintain information about individuals with the rights of individuals to be protected against unwarranted invasions 

of their privacy. Section 7 of the act requires that any federal, state, or local government agency, when requesting an SSN from an individual, tell individuals whether 

disclosing the SSN is mandatory or voluntary, cite the statutory or other authority 

under which the request is being made, and state what uses it will make of the individual’s SSN. 

Additional federal laws also place restrictions on public and private sector entities’ 

use and disclosure of consumers’ personal information, including SSNs, in specific 

instances. As shown in table 1, some of these laws require certain industries, such 

as the financial services industry, to protect individuals’ personal information to a 

greater degree than entities in other industries. 

[Table 1: NOT AVAILABLE AT TIME OF PRINT.] 

In 1998, Congress also enacted a federal statute that criminalizes fraud in connection with the unlawful theft and misuse of personal identifiable information, including SSNs. The Identity Theft and Assumption Deterrence Act made it a criminal 

offense for a person to ‘‘knowingly transfer, possess, or use without lawful authority,’’ another person’s means of identification ‘‘with the intent to commit, or to aid 

or abet, or in connection with, any unlawful activity that constitutes a violation of 

Federal law, or that constitutes a felony under any applicable state or local law.’’ 

Under the act, an individual’s name or Social Security number is considered a 

‘‘means of identification.’’ In addition, in 2004, the Identity Theft Penalty Enhancement Act established the offense of aggravated identity theft in the federal criminal 

court, which is punishable by a mandatory two-year prison term. 


ccoleman on DSK8P6SHH1PROD with HEARING
100 

State Laws Affecting SSN Use and Disclosure 

Many states have also enacted laws to restrict the use and display of SSNs. For 

example, in 2001, California enacted a law that generally prohibited companies and 

persons from engaging in certain activities with SSNs, such as posting or publicly 

displaying SSNs, or requiring people to transmit an SSN over the Internet unless 

the connection is secure or the number is encrypted. In our prior work, we identified 

13 states—Arizona, Arkansas, Connecticut, Georgia, Illinois, Maryland, Michigan, 

Minnesota, Missouri, Oklahoma, Texas, Utah, and Virginia—that have passed laws 

similar to California’s. While some states, such as Arizona, have enacted virtually 

identical restrictions on the use and display of SSNs, other states have modified the 

restrictions in various ways. For example, unlike the California law, which prohibits 

the use of the full SSN, the Michigan statute prohibits the use of more than four 

sequential digits of the SSN. 

Some states have also enacted other types of restrictions on the uses of SSNs. For 

example, Arkansas, Colorado, and Wisconsin prohibit the use of a student’s SSN as 

an identification number. Other recent state legislation places restrictions on state 

and local government agencies, such as Indiana’s law that generally prohibits state 

agencies from releasing SSNs unless otherwise required by law. 

Government Agencies Collect and Use SSNs for a Variety of Purposes 

A number of federal laws and regulations require agencies at all levels of government to frequently collect and use SSNs for various purposes. Beginning with a 

1943 Executive Order issued by President Franklin D. Roosevelt, all federal agencies were required to use the SSN exclusively for identification systems of individuals, rather than set up a new identification system. In later years, the number of 

federal agencies and others relying on the SSN as a primary identifier escalated 

dramatically, in part, because a number of federal laws were passed that authorized 

or required its use for specific activities. For example, agencies use SSNs 

• for internal administrative purposes, which include activities such as 

identifying, retrieving, and updating records; 

• to collect debts owed to the government and conduct or support research and evaluations, as well as use employees’ SSNs for activities 

such as payroll, wage reporting, and providing employee benefits; 

• to ensure program integrity, such as matching records with state and 

local correctional facilities to identify individuals for whom the agency 

should terminate benefit payments; and 

• for statistics, research, and evaluation. 

Table 2 provides an overview of federal statutes that address government collection and use of SSNs. In some cases, these statutes require that state and local government entities collect SSNs. 

[Table 2: NOT AVAILABLE AT TIME OF PRINT.] 

Some government agencies also collect SSNs because of their responsibility for 

maintaining public records, which are those records generally made available to the 

public for inspection by the government. Because these records are open to the public, such government agencies, primarily at the state and local levels, provide access 

to the SSNs sometimes contained in those records. Based on a survey of federal, 

state, and local governments, we reported in 2004 that state agencies in 41 states 

and the District of Columbia displayed SSNs in public records; this was also true 

in 75 percent of U.S. counties. We also found that while the number and type of 

records in which SSNs were displayed varied greatly across states and counties, 

SSNs were most often found in court and property records. 

Public records displaying SSNs are stored in multiple formats, such as electronic, 

microfiche and microfilm, or paper copy. While our prior work found that public access to such records was often limited to inspection of the individual paper copy in 

public reading rooms or clerks’ offices, or request by mail, some agencies also made 

public records available on the Internet. 

In recent years, some agencies have begun to take measures to change the ways 

in which they display or provide access to SSNs in public records. For example, 

some state agencies have reported removing SSNs from electronic versions of 

records, replacing SSNs with alternative identifiers in records, restricting record access to individuals identified in the records, or allowing such individuals to request 

the removal of their SSNs from these records. 


ccoleman on DSK8P6SHH1PROD with HEARING
101 

Private Sector Entities Collect SSNs from Various Sources for Identity 

Verification Purposes 

Certain private sector entities, such as information resellers, consumer reporting 

agencies (CRAs), and healthcare organizations collect SSNs from public and private 

sources, as well as their customers, and primarily use SSNs for identity verification 

purposes. In addition, banks, securities firms, telecommunication firms, and tax preparers engage in third party contracting and sometimes share SSNs with their contractors for limited purposes, generally when it is necessary and unavoidable. 

Private Sector Entities Collect SSNs from Both Public and Private Sources 

Information resellers are businesses that specialize in amassing personal information, including SSNs, and offering informational services. They provide their services to a variety of customers, such as specific businesses clients or through the 

Internet to the general public. Large or well known information resellers reported 

that they obtain SSNs from various public records, such as records of bankruptcies, 

tax liens, civil judgments, criminal histories, deaths, and real estate transactions. 

However, some of these resellers said they are more likely to rely on SSNs obtained 

directly from their clients, who may voluntarily provide such information, than 

those found in public records. In addition, in our prior review of information resellers that offer their services through the Internet, we found that their Web sites 

most frequently identified public or nonpublic sources, or both, as their sources of 

information. For example, a few Internet resellers offered to conduct background investigations on individuals by compiling information from court records and using 

a credit bureau to obtain consumer credit data. 

CRAs, also known as credit bureaus, are agencies that collect and sell information 

about the creditworthiness of individuals. Like information resellers, CRAs also obtain SSNs from public and private sources. For example, CRA officials reported that 

they obtain SSNs from public sources, such as bankruptcy records. We also found 

that these companies obtain SSNs from other information resellers, especially those 

that specialize in collecting information from public records. However, CRAs are 

more likely to obtain SSNs from businesses that subscribe to their services, such 

as banks, insurance companies, mortgage companies, debt collection agencies, child 

support enforcement agencies, credit grantors, and employment screening companies. 

Organizations that provide health care services, including health care insurance 

plans and providers, are less likely to obtain SSNs from public sources. These organizations typically obtain SSNs either from individuals themselves or from companies that offer health care plans. For example, individuals enrolling in a health care 

plan provide their SSNs as part of their plan applications. In addition, health care 

providers, such as hospitals, often collect SSNs as part of the process of obtaining 

information on insured people. 

Private Sector Entities Primarily Use SSNs to Verify Individuals’ Identities 

We found that the primary use of SSNs by information resellers, CRAs, and 

health care organizations is to help verify the identity of individuals. Large information resellers reported that they generally use the SSN as an identity verification 

tool, though they also use it for matching internal databases, identifying individuals 

for their product reports, or conducting resident or employment screening investigations for their clients. CRAs use SSNs as the primary identifier of individuals in 

order to match information they receive from their business clients with information 

on individuals already stored in their databases. Finally, health care organizations 

also use the SSN, together with information such as name, address, and date of 

birth, for identity verification. 

In addition to their own direct use of customers’ SSNs, private sector entities also 

share this information with their contractors. According to experts, approximately 

90 percent of businesses contract out some activity because they find either it is 

more economical to do so or other companies are better able to perform these activities. Banks, investment firms, telecommunication companies, and tax preparation 

companies we interviewed for our prior work routinely obtain SSNs from their customers for authentication and identification purposes and contract with other companies for various services, such as data processing, administrative, and customer 

service functions. Company officials reported that customer information, such as 

SSNs, is shared with contractors for limited purposes, generally when it is necessary or unavoidable. Further, these companies included certain provisions in their 

standard contact forms aimed at safeguarding customer’s personal information. For 

example, forms included electronic and physical data protections, audit rights, data 


ccoleman on DSK8P6SHH1PROD with HEARING
102 

breach notifications, subcontractor restrictions, and data handling and disposal requirements. 

Vulnerabilities Remain to Protecting SSNs in both the Public and Private 

Sectors 

Although federal and state laws have helped to restrict SSN use and display, and 

public and private sector entities have taken some steps to further protect this information, our prior work identified several remaining vulnerabilities. While government agencies have since taken actions to address some of the identified SSN protection vulnerabilities in the public sector, private sector vulnerabilities that we previously identified have not yet been addressed. Consequently, in both sectors, 

vulnerabilities remain to protecting SSNs from potential misuse by identity thieves 

and others. 

Government Agencies Have Taken Additional Actions to Address SSN Protection, yet Vulnerabilities Remain 

In our prior work, we found that several vulnerabilities remain to protecting SSNs 

in the public sector, and in response, some of these vulnerabilities have since been 

addressed by agencies. For example, in our review of government uses of SSNs, we 

found that some federal, state, and local agencies do not consistently fulfill the Privacy Act requirements that they inform individuals whether SSN disclosure is mandatory or voluntary, provide the statutory or other authority under which the SSN 

request is made, or indicate how the SSN will be used, when they request SSNs 

from individuals. To help address this inconsistency, we recommended that the Office of Management and Budget (OMB) direct federal agencies to review their practices for providing required information, and OMB has since implemented this recommendation. 

Actions have also been taken by some federal agencies in response to our previous 

finding that millions of SSNs are subject to exposure on individual identity cards 

issued under federal auspices. Specifically, in 2004, we reported that an estimated 

42 million Medicare cards, 8 million Department of Defense (DOD) insurance cards, 

and 7 million Department of Veterans Affairs (VA) beneficiary cards displayed entire 9-digit SSNs. While the Centers for Medicare and Medicaid Services, with the 

largest number of cards displaying the entire 9-digit SSN, does not plan to remove 

the SSN from Medicare identification cards, VA and DOD have begun taking action 

to remove SSNs from cards. For example, VA is eliminating SSNs from 7 million 

VA identification cards and will replace cards with SSNs or issue new cards without 

SSNs between 2004 and 2009, until all such cards have been replaced. 

However, some of the vulnerabilities we identified in public sector SSN protection 

have not been addressed. For example, while the Privacy Act and other federal laws 

prescribe actions agencies must take to assure the security of SSNs and other personal information, we found that these requirements may not be uniformly observed 

by agencies at all levels of government. In addition, in our review of SSNs in government agency-maintained public records, we found that SSNs are widely exposed 

to view in a variety of these records. While some agencies reported taking actions 

such as removing SSNs from electronic versions of records, without a uniform and 

comprehensive policy, SSNs in these records remain vulnerable to potential misuse 

by identity thieves. Consequently, in both instances, we suggested that Congress 

consider convening a representative group of federal, state, and local officials to develop a unified approach to safeguarding SSNs used in all levels of government. 

Some steps have since been taken at the federal level to promote inter-agency discussion of SSN protection, such as creation of the President’s Identity Theft Task 

Force in 2006 to increase the safeguards on personal data held by the Federal Government. 

In April 2007, the Task Force completed its work, which resulted in a strategic 

plan aimed at making the Federal Government’s efforts more effective and efficient 

in the areas of identity theft awareness, prevention, detection, and prosecution. The 

plan’s recommendations focus in part on increasing safeguards employed by federal 

agencies and the private sector with respect to the personal data they maintain, including decreasing the unnecessary use of SSNs in the public sector. To that end, 

last month, OMB issued a memorandum requiring federal agencies to examine their 

use of SSNs in systems and programs in order to identify and eliminate instances 

in which collection or use of the SSN is unnecessary. In addition, the memo requires 

federal agencies to participate in governmentwide efforts to explore alternatives to 

agency use of SSNs as personal identifiers for both federal employees and in federal 

programs. 


ccoleman on DSK8P6SHH1PROD with HEARING
103 

Vulnerabilities Persist in Federal Laws Addressing SSN Collection and Use by Private Sector Entities 

In our reviews of private sector entities’ collection and use of SSNs, we found variation in how different industries are covered by federal laws protecting individuals’ 

personal information. For example, although federal laws place restrictions on reselling some personal information, these laws only apply to certain types of private 

sector entities, such as financial institutions. Consequently, information resellers 

are not covered by these laws, and there are few restrictions placed on these entities’ ability to obtain, use, and resell SSNs. However, recently proposed federal legislation, if implemented, may help to address this vulnerability. For example, the 

SSN Protection Act of 2007, as introduced by Representative Edward Markey, would 

give the Federal Trade Commission (FTC) rulemaking authority to restrict the sale 

and purchase of SSNs and determine appropriate exemptions. The proposed legislation would therefore improve SSN protection while also permitting limited exceptions to the purchase and sale of SSNs for certain purposes, such as law enforcement or national security. 

Vulnerabilities also exist in federal law and agency oversight for different industries that share SSNs with their contractors. For example, while federal law and 

oversight of the sharing of personal information in the financial services industry 

is very extensive, federal law and oversight of the sharing of personal information 

in the tax preparation and telecommunications industries is somewhat lacking. Specific actions to address these vulnerabilities in federal laws have not yet been taken, 

leaving SSNs maintained by information resellers and contractors in the tax preparation and telecommunications industries potentially exposed to misuse, including 

identity theft. 

We also found a gap in federal law addressing SSN truncation, a practice that 

would improve SSN protection if standardized. Specifically, in our Internet resellers 

report, several resellers provided us with truncated SSNs showing the first five digits, though other entities truncate SSNs by showing the last four digits. Therefore, 

because of the lack of SSN truncation standards, even truncated SSNs remain vulnerable to potential misuse by identity thieves and others. While we suggested that 

the Congress consider enacting standards for truncating SSNs or delegating authority to SSA or some other governmental entity to do so, SSN truncation standards 

have yet to be addressed at the federal level. 

Concluding Observations 

The use of SSNs as a key identifier in both the public and private sectors will 

likely continue as there is currently no other widely accepted alternative. However, 

because of this widespread use of SSNs, and the vulnerabilities that remain to protecting this identifier in both sectors, SSNs continue to be accessible to misuse by 

identity thieves and others. Given the significance of the SSN in committing fraud 

or stealing an individual’s identity, it would be helpful to take additional steps to 

protect this number. As the Congress moves forward in pursuing legislation to address SSN protection and identity theft, focusing the debate on vulnerabilities that 

have already been documented may help target efforts and policy directly toward 

immediate improvements in SSN protection. To this end, we look forward to supporting the Subcommittee and the Congress however we can to further ensure the 

integrity of SSNs. Related to this, we have issued a report on the Federal Government’s provision of SSNs to state and local public record keepers, and we have also 

recently begun a review of the bulk sale of public records containing SSNs, including how federal law protects SSNs in these records when they are sold to entities 

both here and overseas. 

Mr. Chairman, this concludes my prepared testimony. I would be pleased to respond to any questions you or other members of the subcommittee may have. 

f 

Chairman MCNULTY. I thank all of the witnesses. Thank you, 

Mr. Bertoni, especially for this new report, which you issued I believe today as a result of the inquiry by Senator Schumer. 

Mr. BERTONI. Yes. 

Chairman MCNULTY. That is now a part of the record of the 

Subcommittee, and we will certainly consider that in our deliberations. I want to thank Mr. O’Carroll for the time we spent together 


ccoleman on DSK8P6SHH1PROD with HEARING
104 

recently to talk about issues generally regarding Social Security, 

and I want to thank you for your commitment to helping us to reduce the backlog, to keep the agency focused on its core mission 

and also the subject of today’s hearing, protecting the American 

people from identity theft. I am glad to know we are on the same 

wavelength and working for the same purposes. 

Mr. Winston, thank you also for your testimony. You mentioned 

this review of the Social Security number uses. Where are you on 

that, how long will that take, when can we expect to see some kind 

of a product on that? 

Mr. WINSTON. As I mentioned, the Task Force issued its report 

in April, at which point we immediately put together a group of 

FTC and other agency employees to begin this review. In fact, this 

week, we are meeting with a number of officials from trade associations and business groups and others to try to find out more not 

only about how they use Social Security numbers but why and 

what it would cost in terms of money, as well as inconvenience of 

change. 

Chairman MCNULTY. But just in line with my previous 

thoughts about this Congress actually doing something, when could 

we expect to see the results of your review? 

Mr. WINSTON. The Task Force report calls for a report to the 

President by the first quarter of 2008. I suspect we will have information well before that that would be useful. 

Chairman MCNULTY. Well, we would really appreciate any data 

that you could give us prior to that because some of us do not intend to wait around until 2008 to start moving legislation. At this 

time, I would yield to the ranking Member, Mr. Johnson. 

Mr. JOHNSON. Thank you, Mr. Chairman. We are not going to 

wait until 2008, huh? Mr. O’Carroll, I remember some years ago 

the Social Security Administration was handing out new Social Security numbers to upward of 100 people—or 100 times to the same 

guy just by a phone call. Have we stopped that because we passed 

legislation to do it? 

Mr. O’CARROLL. Yes, Mr. Johnson, that was one of the recommendations that came out after 9/11 when we started to ratchet 

down on the security of the number of it, and what we were looking 

at was multiple SSNs being reissued on it. We now have in the 

SSA systems because of our recommendations and because of your 

legislation, we are now being much more attentive to the number 

of cards going out, it is into the system. There are flags put up. We 

are taking a look at numbers of cards going to the same address, 

sort of the same type of similar thing with replacement cards. 

When 300 cards go to one address, it is what we call a ‘‘clue.’’ So, 

we have been trying to plug up that hole. 

Mr. JOHNSON. How do you do that? 

Mr. O’CARROLL. Well, what we are doing with that is it is 

flagged, we get the information on it, and in our case we have been 

doing audit work on it where we actually go to the address what 

the address is. In some cases, it is legitimate in terms of it is a university or something where it is one entity but where it is an apartment building in some locale, we actually recommend that to our 

investigators and our investigators are going there, and we are 


ccoleman on DSK8P6SHH1PROD with HEARING
105 

looking to find who is collecting those false cards and making arrests. 

Mr. JOHNSON. Well, you mentioned your ongoing role to ensure 

homeland security, as reflected in the recent arrest of terrorists 

planning an attack on Fort Dix. Based on your experience to date, 

how are Social Security numbers and document fraud, how is that 

fraud being committed by potential terrorists or do you know? 

Mr. O’CARROLL. Well, as we know with terrorists and in fact 

all criminals, everyone is trying to assimilate into the public. What 

happens is that we are finding in a lot of cases people trying to do 

that illegal assimilation are going to identity mills, and they are 

going to places where they are able to get immigration documents, 

Social Security cards, and we monitor that all the time and keep 

track in terms of the prices that going for it and just ways of monitoring. But we work very closely with Immigration, with FBI, in 

the case of Fort Dix, with the New Jersey State Police, all of them 

are a part of the Joint Terrorism Task Force up there, which we 

are a member. 

What had happened in the case of Fort Dix was we found out 

that several of the suspects in it, in previous occasions in dealing 

with law enforcement, used false identities up to and including Social Security card fraud. I have got to tell you prosecutors use Social Security misuse, which is part of the legislation that came out 

this Congress, we use that as an enforcement tool, the misuse of 

the SSN to identify and arrest terrorist suspects. 

Mr. JOHNSON. Good for you. Are you finding people from overseas asking for Social Security cards before they come over here? 

Mr. O’CARROLL. Well, yes, and there are two stories to it. In 

terms of one, it is a good one because what is happening is before 

they get here, they go into an enumeration process where they are 

dealing with embassies overseas and they are being vetted by the 

embassy before they come here, which is a good technique. What 

we are finding, though, and we have done it in our audit reports, 

is that we find that only Social Security employees really put the 

due diligence into checking all the documentation, checking all the 

information, and we are finding that when SSA delegates that responsibility to other agencies to be doing it, we are not getting the 

same type of quality. So, in our audit report we recommended that 

Social Security work with State Department on making sure that 

the documents that are taken in those applications overseas are 

valid, are good and that they are legitimate needs for SSNs. 

Mr. JOHNSON. Do we need to put anything in legislation to reaffirm that or is it clear enough now? 

Mr. O’CARROLL. If you do not mind, let me check that and get 

back to you because I think at this point it does seem to be—it has 

been brought to State Department’s attention, and I have got to 

tell you, it is a good program, and it is a fairly new one so we 

might be at a point now of monitoring it before we do any more 

recommendations for it. But I will check it and get back to you. 

Mr. JOHNSON. Thank you, sir. I appreciate it. 

Chairman MCNULTY. Thank you, Mr. Johnson. Mr. Levin may 

inquire. 


ccoleman on DSK8P6SHH1PROD with HEARING
106 

Mr. LEVIN. Thank you, Mr. Chairman and Mr. Johnson, for having this hearing. When I read your opening statements, you mentioned, Mr. Chairman, this is the sixteenth hearing on this topic. 

Chairman MCNULTY. It is time for action. 

Mr. LEVIN. That the FTC receives between 15,000 and 20,000 

contacts each week from those who have been victimized. Mr. Johnson, my pal, you say in your statement, according to the Privacy 

Rights Clearinghouse, since January 2005, that breaches have been 

over 155 million. So, the staff, as usual, has prepared some really 

incisive questions, but could I ask you this because this kind of 

jumps off the pages, what is the problem? What is taking so long? 

Why have we been having all these hearings and there are all 

these breaches and all these thefts? What is holding this up, what 

is holding you up? What is holding Washington up? 

Mr. WINSTON. I guess I cannot answer the question about why 

you have had so many hearings but as far as what is holding up 

the FTC and the other agencies that have been working on this 

problem, we have been working diligently on it. We have done a 

lot of law enforcement. We have done a lot of outreach. I think additional legislation would be very helpful in making it easier for us 

to tackle this problem. 

Mr. LEVIN. You are an active participant in crafting this legislation? 

Mr. WINSTON. Yes, we have been involved. We have provided 

technical assistance to different Committees and the different sponsors. We have urged Congress to pass national data breach notification standards and national data securities standards. We think 

that is critical in this fight. 

There are a lot of steps that are being taken but it is a complex 

problem and it is an ever-evolving problem. Identity theft is everything from your cousin going up in your bedroom and stealing your 

wallet to international crime rings hacking into computer databases and getting records. In tackling it, we need to tackle it from 

every angle, as I mentioned. 

Mr. LEVIN. Okay, so it is complex but if we go home and talk 

to our constituents and we say about any problem, it is complex, 

it changes their complexion, they get kind of red. So, I will ask the 

two of you, Mr. O’Carroll and Mr. Bertoni, what is the problem? 

Why is it so difficult? Why haven’t we acted besides its complexity? 

Mr. BERTONI. As far as why you have not acted? 

Mr. LEVIN. Congress and the Executive and all of you? 

Mr. BERTONI. I think as far as the pressures on the Congress, 

there are interests on the other side of this issue that make the 

case that commerce and business to business information sharing 

and ultimately customer service will deteriorate. I think that argument has been heard. It points—it stalled forward progress in 

terms of making sure that other industries have similar protections 

in terms of their information security and disclosure similar to the 

financial services institutions, in particular the telecommunications 

and tax preparer industry. That bar is lower, and we have concerns 

that that bar is lower, and we believe at a minimum it should be 

raised at least to the level of the financial services community. So, 

I guess the roundabout answer is there are arguments on both 

sides and at some point which one will win or which compromise 


ccoleman on DSK8P6SHH1PROD with HEARING
107 

will prevail, that is something for you all as policy-makers to work 

out. 

Mr. LEVIN. I think that is a useful answer. Mr. O’Carroll, you 

get 30 seconds to explain why there has not been more action. 

Mr. O’CARROLL. I guess I better talk quick. I think there has 

been a lot of action in terms of when I came to this inspector general’s office 10 years ago, the Social Security number was out there, 

it was being used as the primary identifier on virtually every document up to and including the driver’s license. In the time that I 

have been here, it is now off of the driver’s licenses. The Social Security statement, which goes out every year to every citizen, has 

a truncated number on it now. When government checks went out, 

they had a Social Security number in the window on the check, 

that stopped. I got to say it has been a long haul doing it because 

of the convenience factor. Everyone used the Social Security number as a convenient tracking number, and it has been really our 

mission to try to get it back into the box through all this time. The 

Social Security Protection Act was some steps in the right direction, it took us a number of years with this Committee to get that 

through, and I think if you could do another act of this kind with 

more controls over the Social Security number, that would probably 

be the benefit of this Congress. 

Mr. LEVIN. Thank you. Thank you. 

Chairman MCNULTY. Thank you, Mr. Levin. Mr. Lewis may inquire. 

Mr. LEWIS OF KENTUCKY. Thank you, Mr. Chairman. Going 

back to the balance that you were talking about there, Mr. Winston, in your testimony you stated that restrictions on the Social 

Security number should be reduced to unnecessary use without inadvertently burdening necessary use. Could you explain what you 

believe to be necessary and unnecessary use? 

Mr. WINSTON. Yes, I think the H.R. 948 really goes at it the 

right way. It lists—it basically bans sale and purchase of the Social 

except for certain specific purposes, law enforcement, public health 

and safety, for credit verification, for fraud prevention. Then it says 

that the FTC should do rulemaking in order to flesh out those exceptions and add additional ones if it determines that it is appropriate. I think that is the right approach. 

Mr. LEWIS OF KENTUCKY. Mr. Bertoni, would you want to 

comment on that too? 

Mr. BERTONI. In terms of the balance, striking a better balance, 

as I said before, I think it is important that actions taken do not 

upset the free flow of commerce, the ability of businesses to share 

information. But as our report, as we continue to say in our reports, there are still industries that still fall we believe way out of 

the parameters in terms of a reasonable amount of regulation and 

control in terms of their information security and disclosure policies. Again, at a minimum, if you looked at what has happened in 

the financial services sector, that sector has not grinded to a halt. 

There have been changes made. We are asking the Congress to 

look at some of these other sectors to see if that bar could be 

raised. Again, there would be some compromises to be made, but 

we also believe there are soft spots and areas to be strengthened 

in several of those areas. 


ccoleman on DSK8P6SHH1PROD with HEARING
108 

Mr. LEWIS OF KENTUCKY. Mr. Winston, of course all of you 

I think would agree that if we could authenticate the consumer or 

the customer, we would go a long way in stopping thieves. I know 

you have been looking at that, Mr. Winston. What have you come 

up with as far as finding a good way to authenticate the people 

who are out there? 

Mr. WINSTON. We did hold a 2-day workshop on this subject 

with lots of people from all over the world coming in to talk about 

their experiences. I think what came out of that was that there is 

no panacea. There is no one perfect way to authenticate. If there 

were, thieves, who are very smart, would come up with a way to 

defeat it. So, what we are seeing more and more of are multiple 

layers of authentication, not just one piece of information but a biometric, a thumb print, an iris scan, plus an identification number 

or pin number. So, there is a lot of movement in that direction and 

government can facilitate that and encourage it. It probably is not 

a wise thing for government to come in and say this is how you 

have to authenticate consumers. 

Mr. LEWIS OF KENTUCKY. Okay, thank you. 

Chairman MCNULTY. Thank you, Mr. Lewis. Mr. Becerra may 

inquire. 

Mr. BECERRA. Thank you, Mr. Chairman. Thank you all for 

your testimony. Let me ask a question. My understanding is if we 

were to try to re-issue the Social Security number to try to take 

care of discrepancies and to try to give people a new number that 

is not out there in the public domain, and if we were to try to give 

it some type of enhanced security, a photograph or some type of biometric, we are looking at somewhere in the order of about $10 billion to do that. Is that—I know a rough estimate but is that still 

more or less an estimate, Mr. O’Carroll? 

Mr. O’CARROLL. It is a moving target, Congressman, in that it 

depends on the type of—what features would go into the new card, 

whether it was a biometric. 

Mr. BECERRA. Give me a rough estimate. 

Mr. O’CARROLL. I say that just a rough off-the-top of my head 

number, that would be a good number, the $10 billion but with a 

lot more ‘‘but’s’’ to it. 

Mr. BECERRA. I understand because I want to move off of that, 

I am just trying to get a rough sense of things, so about $10 billion 

gives you a new card that might give Americans enhanced security. 

Right now SSA would swallow that cost, Congress would have to 

provide you with the money to do that, otherwise it would be impossible to actually administer because there will be tremendous 

cost trying to get folks to come in with their birth certificates and 

whatever else they will need to try to identify themselves for purposes of getting this new card. Okay, so let me ask this, who should 

pay for the establishment and maintenance of a new identity system, identification system, taxpayers or the users? Because right 

now the Social Security number imposes no cost on any consumer, 

any business if it is used solely for the purpose of identifying how 

much you have earned for Social Security purposes in the future. 

That the taxpayers I think we are willing to bear because we are 

going to get the benefits of the Social Security system in the future. 

But as it is right now with identity theft, with business losses 


ccoleman on DSK8P6SHH1PROD with HEARING
109 

mounting into the billions, tens of billions of dollars, there are lots 

of costs involved in trying to secure your identity or restore your 

identity or for a business to try to reclaim losses. I hear no talk 

about who is going to pay for giving us a more secure system, the 

taxpayers or all the consumers, meaning the businesses and actual 

individual consumers, who would utilize that increased security 

that would come from a new identification system that may be 

housed within Social Security? 

Mr. O’CARROLL. Okay, not to be argumentative but why would 

Social Security be the vehicle for this new identifier? 

Mr. BECERRA. That is a good question. 

Mr. O’CARROLL. Be put back on to the management of the Social Security Administration when we have a good number now 

that is doing what it is supposed to do in terms of tracking wages 

and tracking benefits on it and the commercial half is the other 

one. 

Mr. BECERRA. Let’s take that path, say we say the Social Security number will be used only for Social Security purposes. Disability benefits, retirement benefits, death benefits. 

Mr. O’CARROLL. Tax purposes. 

Mr. BECERRA. That is not necessarily Social Security but we 

have ventured into at least taxes for purposes of the use of the Social Security number but for other reason, but then what would you 

suggest or does Social Security what would be used as that identifier that used nationally for whether it is consumer purposes or 

other types of purposes? 

Mr. O’CARROLL. I thought I did a pretty good job of batting this 

away from Social Security. 

[Laughter.] 

Mr. O’CARROLL. I am thinking I might yield my time to one of 

my esteemed panel members. 

Mr. BECERRA. Let me ask Mr. Bertoni that question is because 

what I am trying to get a sense—those must all be the folks from 

GAO who are laughing back there, I am just trying to get a sense, 

we are going to have do something but who should pay it? My 

sense is that the taxpayer should pay something because ultimately we are all taxpayers, most of us are taxpayers, and we want 

to have that security. But I am not out there selling my identification number to identity thieves. I am not the one that tells a particular business or government agency use my number for some 

other purpose, whether it is for purposes of registering a divorce 

or buying a refrigerator. So why should the taxpayer then foot the 

bill to make this card, if it is used for Social Security, to make it 

more secure? 

Mr. BERTONI. Again, that is certainly a policy question. I can 

tell you how it is now. SSA has certainly—— 

Mr. BECERRA. I do not want to know how it is now, give me 

a sense, who should pay? 

Mr. BERTONI. I think there are models out there where you 

could construct a different model where others could pay outside of 

the agency. 

Mr. BECERRA. ‘‘Others,’’ identify ‘‘others’’? 

Mr. BERTONI. I am just considering say the driver’s, and I am 

not advocating, I am just kicking something around here, there are 


ccoleman on DSK8P6SHH1PROD with HEARING
110 

models where people who are buying the card or buying the service, which is a driver’s license, would be asked to pay a fee for that. 

I am not aware of any models where say beneficiaries of a particular card or identity card, such as a SSN, like an information 

re-seller, would have to pay. I cannot talk to that because I am not 

aware of that model. The only two models I am aware of are the 

agency footing the bill or the purchaser of the license or the card, 

historically that has not been something that SSA has wanted to 

do. Beyond that, again, I think that is an option, a policy option 

for Congress to consider. 

Mr. BECERRA. A user fee of sorts? 

Mr. BERTONI. There are models but I am not advocating that. 

Mr. BECERRA. No, I understand and I thank you for your comments. Mr. Chairman, thank you very much. I know my time has 

expired. 

Chairman MCNULTY. Thank you, Mr. Becerra. Mr. Ryan may 

inquire. 

Mr. RYAN. Thank you, Mr. Chairman. I guess I will pick up 

where Mr. Becerra left off because this issue has so many sources, 

so many directions. It interweaves all of these problems we have 

got, terrorism, immigration, all of these things, so we have some 

no-brainers, unify the truncation standards, right, and some other 

easy low-hanging fruit things. At the end of the day, it seems like 

what we are headed to is how do we, A, authenticate people and, 

B, kind of clean up the database in Social Security and stop the 

mission creep of the number being used, these are pretty much the 

two issues here, right? So now we are being faced with this sort 

of fork in the road, do we do a Social Security card, do we just fix 

the Social Security card, put $11.7 billion, $10 billion, whatever 

this number is, and make the Social Security card better with biometrics and a centralized Federal database or do we go a different 

route? I guess that is kind of the fork we are in right now. 

Let me ask just each of the three of you, if we go down this path 

of a better 21st Century Social Security card with the biometrics 

and all of this, do you believe that given the way the market works, 

given the way identity thieves work, that a Social Security card 

under today’s technology can be implemented and can be successful 

for the long term from preventing identity theft and all that. I will 

just ask the three of you, just go down the line, however you want 

to start, Mr. O’Carroll? 

Mr. O’CARROLL. I will tell you, Mr. Ryan, we have done a lot 

of looking at Social Security cards in terms of whether to use different type of stock for it, different printing for it, whether to put 

biometrics into it, everything else, and I have got to tell you what 

we have found by looking at just history in general is when whenever the government comes up with any type of a document, a form 

or whatever, especially if there is going to be some financial gain 

in figuring out a way of compromising it, the counterfeiters usually 

do figure out a way to compromise it. So, even when you say, if we 

come up with one, do you think we will get a few years out of it 

before somebody does it, then all of a sudden you are going to go 

back to the thought of another $10 billion of coming up with a new 

card. 

Mr. RYAN. Yes. 


ccoleman on DSK8P6SHH1PROD with HEARING
111 

Mr. O’CARROLL. So, what we are advocating on this is that it 

is the number, it is not the card, and if we can put more time, effort, whatever into the system work on it, where we are getting 

good, positive hits on terms of when information is put in, is this 

the right person for it, and that is again what I am saying with 

this is that the first step on this thing is really with the government in terms of right now the agencies going to each other, basically work on that type of thing, the technology for it, that is a big 

step in the right direction. 

Then at the time, which kind of goes back to what we were talking about before, is when you are talking in terms of the financial 

sector and all the other forms of identity that are being used, our 

recommendation is to use different numbers than the Social Security number for it. The one that I am always sort of cautious on 

with this thing is with the Social Security number, I think we have 

done a very good job about it, is keeping it, at least in terms of the 

government, for the government uses of it, and not having it become a national identity document, which is kind of the role where 

if you got into biometrics and hard cards and that, it is a whole 

other step. 

Mr. RYAN. So, we could get ourselves on the slippery slope, but 

I want the other two of you to comment. Let me throw this at you 

as well. Tell me if I am wrong, we are at this fork, do we go down 

this sort of unifying national ID card route, which has all of the 

Orwellian and privacy and obsolete issues associated with it, or can 

the market produce ever upgraded standards on helping people authenticate who they are and give people the tools in the marketplace to be able to authenticate their identity and then you clean 

up the Social Security number itself and then people can operate 

through society by preventing identity theft and being able to authenticate who they are and the government does a job of basically 

saying this particular authenticating agency or company is correct, 

they do a good job. The government can do a job of making sure 

that a business that wants to market itself as an authenticating 

entity, has the Good Housekeeping Seal of Approval, can do that, 

is that the path that we go down, meaning instead of the national 

ID card, do we have institutions that are out there in the private 

sector that can be authenticators of people or not? Do you understand what I am trying to get to? I would like to just ask you to 

consider that as well and give me your take on that. 

Mr. WINSTON. Sure. Mr. Ryan, I think what you are—— 

Mr. RYAN. Yes, I am not doing a good job of explaining myself. 

Mr. WINSTON. No, actually you are. 

Mr. RYAN. Okay. 

Mr. WINSTON. What you are playing out I think is the very debate that is going on with the real ID act. There are certain advantages to that, of course, of having one ID card for everything. It is 

easy to use, hopefully it is secure, but there are down sides and 

there are privacy issues and there are cost issues that are very serious. My own view is that maybe another way to go is to further 

develop what is happening now, which is multiple forms of authentication, not having one form of authentication for every purpose 

but in different sectors having different forms of authentication. It 

can be a pin, it can be a biometric. That is much harder for an 


ccoleman on DSK8P6SHH1PROD with HEARING
112 

identity thief to break into. There are convenience issues, of course. 

Consumers do not want to memorize 15 different passwords, but I 

think there is ongoing a development of better, useable forms of authentication that I think have a good chance of solving this problem. 

Mr. RYAN. Mr. Bertoni. 

Mr. BERTONI. There is a lot in that question. I think one thing 

we need to consider early on is given that we have real ID there, 

do we want to go forward with a parallel path of having a Social 

Security card with very similar secure features? I think you could 

create some redundancies that do not need to be there. So, there 

is an issue for the country to consider in terms of what will it be, 

will it be real ID, will it be the Social Security number? We issued 

a report last year that talked about the pro’s and con’s and options, 

and I can provide you some of that. 

But, again, to step back, even before we talk about who does it 

and what we might use, there are real implementation issues to 

consider with just the Social Security Administration. With 300 

million cards issued out there, how do we do it? Is it laddered? Is 

it all at once? Who gets it first? Prior to 1978, there was very little 

fraud verification for people seeking a SSN. These people could 

come forward now, get their Social Security card, and we really did 

not do a good job of verifying who they were in the first place. So, 

we have millions of people with these pre-1978 cards that they are 

going to walk away with an ID card that is going to be what most 

people conceive to be bullet proof, and they may not be who they 

say they are. That is an issue. 

I think in terms of data cross-matching, we have gone on record 

at GAO that short of new cards, biometrics, there is a lot that the 

public and private sector can do in terms of data cross-matching, 

using various elements, not just the Social Security number. Truncation is a great protection. It should be part of the verification 

scheme, but there are new models out there where they use multiple data points to give the verifier a higher comfort level that you 

are who you say you are. So, that to us is certainly something that 

needs to be considered and moved on. 

Mr. RYAN. I assume my time is up. Thank you, Mr. Chairman. 

Chairman MCNULTY. Thank you, Mr. Ryan. Ms. Schwartz. 

Ms. SCHWARTZ. Well, thank you. I am going to try and take us 

off the discussion of a national ID card. I am not sure we are anywhere near any agreement about the need for such a thing and 

who would do it and how we would pay for it and how we would 

protect people’s identification. I think pulling us back if we could 

just a little bit to the use of the Social Security number and kind 

of risks we are already engaged in. It seems to me we ought to take 

care of that first, and we have not done that yet. So, let me just 

understand here, the feeling so far is that you do not, and I guess 

it would be the Social Security Administration, does not have the 

authority to restrict the use of Social Security numbers, I think 

that is a simple yes or no? 

Mr. O’CARROLL. Yes. 

Ms. SCHWARTZ. You do not have the authority, you do not? 


ccoleman on DSK8P6SHH1PROD with HEARING
113 

Mr. O’CARROLL. Correct. There is no authority. Once it is outside of Social Security, it is out in the public, we have no authority 

to restrict. 

Ms. SCHWARTZ. So, individuals ask for it, they give it—we all 

have, as you pointed out, hospitals, universities, schools—— 

Mr. O’CARROLL. But we can recommend people say no but we 

cannot enforce them not to ask. 

Ms. SCHWARTZ. You do not also feel that you have the authority to set standards about its use? For example, you mentioned display, I think all of us have actually seen from what hospitals used 

it at some time or health centers might have used it as their patient chart number. It was on my Blue Shield insurance card for 

years, how hard was that to figure out, it said Allison Schwartz 

and my Social Security number, I think they would probably have 

assumed it was my husband’s just out of sexism but it was actually 

mine, and I had my insurance. They only just recently have 

changed that, I assume, because of the concerns about identity 

theft. So, the question is do you feel like you could not even or you 

do not have the authority now to set standards about display or 

use or protection of a Social Security number used by any kind of 

private entity? 

Mr. O’CARROLL. Correct. There is very limited use. One of the 

limits that is on it is that when it is falsely used in advertising, 

and we can enforce that. That is the one where you get in your 

mail a document that looks like it came from the Social Security 

Administration, it is using the logo, and that type of stuff. We can 

restrict that type of use but the other types of uses where Radio 

Shack is asking for your Social Security number, we cannot. That 

is where this is very difficult because once it got out of SSA and 

got into the economy, it started becoming that financial tracker. 

Ms. SCHWARTZ. Hence, the need for us to take some action 

to—— 

Mr. O’CARROLL. Yes. 

Ms. SCHWARTZ [continuing].—Limit the use in the private sector and attempt to set some standards or suggest who does set the 

standards on how they protect this very sensitive information. 

One other question for you. The IRS, as you well know, has been 

subcontracting with private collection agencies to collect taxes. The 

first thing they ask is for the Social Security number. We had a 

hearing which revealed the fact that individuals are very hesitant, 

appropriately, to give someone who just says, ‘‘Hi, I am Susan, I 

cannot tell you why I am calling, I have to make sure I know who 

I am talking to first, would you give me your Social Security number?’’ It is just stunning actually that this is a government-authorized activity. Now, many people do not give their Social Security 

appropriately but some do. Now, do you know if you or the IRS has 

set very careful limits on the protection of those Social Security 

numbers once they get them, these are now private agencies? 

Mr. O’CARROLL. Well, it is interesting that you bring that up. 

One is that you, as you noticed there, what we are saying is when 

somebody calls you up on the phone and asks for your Social Security number, do not give it, which reinforces that. But then with 

secondary information and back and forth, trust with information 

and know that what they are calling about is a transaction with 


ccoleman on DSK8P6SHH1PROD with HEARING
114 

the government, there is that. But what we have done, and we 

have gone to the Department of Treasury, is that we have asked 

all other—we have asked 15 other inspectors general to take a look 

at their departments and the use that they have of Social Security 

numbers, up to and including contractors, which is what you are 

talking about, and in 2001, six years ago, there was very little control over that. There were no real limits on it, nothing was in the 

contract about safeguarding the Social Security information and 

that. 

In a follow-up that we did about a year ago, those same 15 agencies were finding out—and they are all the biggest departments— 

were finding out that, yes, they are safeguarding their own information, one, they are too cautious on disclosures of it, so any of 

their documents, they are very cautious to not have Social Security 

numbers. 

Ms. SCHWARTZ. The department is or the subcontractors are? 

Mr. O’CARROLL. These are the departments and then each of 

the departments are asked at their subcontractors and whether the 

contractors were abiding by security of any Social Security number 

information, and we found that they were. 

Ms. SCHWARTZ. So, you have done a study? 

Mr. O’CARROLL. Yes, and so we keep doing that to make sure 

that the Federal agencies are looking at subcontractors and making 

sure, like in this instance, that there is protection on it. OMB, 

under the new PII guidance, is also reinforcing that. So, I have got 

to say at least government-wise and government contractor-wise, 

we are being very—much more astute or much more attentive to 

that issue. 

Ms. SCHWARTZ. So, the concern is really much more in the private sector and the use of these numbers in the private sector. 

Mr. O’CARROLL. Yes. 

Ms. SCHWARTZ. We have had other hearings but we really need 

to do something to give you the tools and the authority, I am looking at both you actually, exactly how we will write all this legislation I guess remains to restrict the use of the Social Security number and to set very clear standards about its use. It is pretty stunning how it has been used. So, thank you very much. Mr. Chairman, I think my time is up. 

Chairman MCNULTY. Thank you, Ms. Schwartz. Ms. Tubbs 

Jones. 

Ms. TUBBS JONES. Thank you, Mr. Chairman. You do, sir, 

however the authority to restrict more than one person using the 

same Social Security number though, do you not? 

Mr. O’CARROLL. Yes, we do. 

Ms. TUBBS JONES. That is as big a dilemma in government as 

anything else is with regards to Social Security numbers, correct? 

Mr. O’CARROLL. The misuse of the SSN and the legal use, yes. 

Ms. TUBBS JONES. Yes, and so we have many employers who 

employ people in the United States of America and they in the 

same company and more than one person using the same Social Security card number, Social Security number, excuse me, not a card 

but the number? 

Mr. O’CARROLL. Yes. 

Ms. TUBBS JONES. What are we doing about that? 


ccoleman on DSK8P6SHH1PROD with HEARING
115 

Mr. O’CARROLL. Well, we are working in terms with Immigration to be taking a look at what is called the basic pilot, which is 

the verification program, that when an employee applies for a job, 

we verify the SSN as being a legitimate SSN and a legitimate 

name and the basic information of male, female, date of birth on 

it. That is being done. 

Ms. TUBBS JONES. So, what is your enforcement? 

Mr. O’CARROLL. Excuse me? 

Ms. TUBBS JONES. I am going to interrupt you because I do not 

have but 5 minutes. 

Mr. O’CARROLL. Sure, hey, we are coming from the same place. 

Ms. TUBBS JONES. So, what are your enforcement tools for that 

purpose? 

Mr. O’CARROLL. Well, enforcement tools on it is the misuse of 

the SSN, we use that violation when people are misusing it, and 

as an example when we were talking about the Fort Dicks terrorist 

investigation, we worked with ICE every day of the year where 

people are misusing SSNs and where they are charged with it. Unfortunately, prosecutors are not the most thrilled with that type of 

a prosecution unless it is in large numbers. 

Ms. TUBBS JONES. I am not talking about terrorists, I am talking about the employers who allow the use of more than one person 

to use a Social Security number, what are we doing about those 

employers and what are our enforcement tools and what have we 

done? 

Mr. O’CARROLL. We are going after them. We just had a recent 

case in Massachusetts in which an employer was telling any new 

employee coming in if they did not have a Social Security number, 

go to this location and they will give you a Social Security number. 

They were getting counterfeit Social Security numbers going to 

work for this employer and the employer was arrested. 

Ms. TUBBS JONES. Do you have any numbers? If you do not 

have them with you today, I would be interested on how many employers we have prosecuted for allowing employees to use—more 

than one employee to use the same Social Security number, I would 

be interested in having that? 

Mr. O’CARROLL. I would have to respond back on that. I am not 

sure whether it is a large number but it is a number, and I will 

get it for you. 

Ms. TUBBS JONES. I will tell you what, I am not sure either, 

but I bet money that it is a large number. I am laughing—not 

laughing but I just pulled out my Ohio Public Employees Retirement System prescription drug card, it has got my Social Security 

number on it, broad as day. That is my ID number. I guarantee 

you there are a whole lot of others out there that are using that. 

It is easy for us to sit in this room, and I am not going to be a 

holier than thou person, but it is easy for us to sit in the room and 

have a discussion and be congenial in the course of our discussion 

about what we are going to do about Social Security numbers, and 

I have only been in Congress 9 years and I am sure, as we said, 

we have been sitting here having these nice little collegial discussions about the impact and that is why we end up where we are 

right now with the misuse and identity theft of Social Security 

numbers. 


ccoleman on DSK8P6SHH1PROD with HEARING
116 

I just would hope that even in our collegiality, that in 2007, that 

we will move forward to accomplishing some real things because all 

of us sit here and say, ‘‘It is right here on my card. I call in to the 

bank, I want to get my bank account number. I have got to give 

my Social Security number, my mother’s maiden name,’’ and on 

and on. We have accepted it as just part of the living in the United 

States of America and accessing information, but we have got to 

get further ahead and be serious about how we involve this. After 

that nice little piece I have done, Mr. Chairman, I thank all of you 

for the work that you do, but tell us what you need, let’s do it, let’s 

not just sit here and allow people to continue to be put in harm’s 

way as a result of misuse. I thank you, Mr. Chairman, for your 

time. 

Chairman MCNULTY. I thank Ms. Tubbs Jones, and I want to 

assure her that Mr. Johnson and I have expressed our determination to move forward with some legislation rather than just talking 

about the issue. Mr. Ryan has an additional inquiry. 

Mr. RYAN. Thank you, Mr. Chairman. Mr. O’Carroll, I wanted 

to follow-up on Ms. Tubbs Jones question, I want to ask you about 

these no-match letters. This happens to us all the time where we 

will have an employer that will call or write us and say they have 

received a no-match letter from the Social Security agency where 

they said, ‘‘Well, we have found that five people are claiming the 

same number, we do not know if your employee is the right person 

or the wrong person. You cannot fire the person, we are going to 

do the investigation.’’ Then they typically have no follow-up from 

thereafter. So they are caught. 

So can you just walk me through what is the process and the 

procedure at SSA, do you have what you need to do to find out who 

people are or who they are not? How do you do this, do you just 

do random audits of your database to see more than one claim on 

a Social Security number? What do you do when you find four or 

five people claiming the same number? What is the outcome? Can 

you just explain this briefly to me? 

Mr. O’CARROLL. Well, when the tax information goes to SSA 

and that information is run against the SSA database, that is 

where the no-match’s are coming out. It is all automated, it is automatic, a letter is automatically sent out to the employer. 

Mr. RYAN. So, every no-match that comes in is identified? 

Mr. O’CARROLL. Yes. 

Mr. RYAN. Those that can be identified with an employer, a letter is generated on it to that employer. Really it is an automated 

process. On occasion, if there are a lot of them, SSA will contact 

employers with a liaison service to see if they can help them but 

for the most part it is a pretty passive action, where the letter goes 

out, the employer is notified, the employer knows that the information that he is given is incorrect and basically he or she is instructed to contact the employee and straighten it out. Then also 

the employee is recommended to go to Social Security and Social 

Security will then straighten it out with the employee. 

Mr. RYAN. But since the employer just has an I–9 Form he or 

she has to fill out, which they have to have some document, one 

of what 29, I think thrown in front of them, they do not know 

whether the person is legitimate or not, whether they are illegal or 


ccoleman on DSK8P6SHH1PROD with HEARING
117 

not, how then does the person proceed? They send the person to the 

local Social Security office and then it is up to the Social Security 

to use their best judgment to determine whether the person they 

say they are or not, is that basically how this follow-up occurs? 

Mr. O’CARROLL. A lot of people follow up with the employee on 

it, yes. But I have got to tell you in most cases, it can be rectified 

at the employer/employee level in terms of the person does have 

the work documents, the other documents for the employer to look 

at and it can be resolved at that level. I have to tell you one of the 

down sides of this one is that in many cases by the time the employers are getting these no-match letters, especially in transient 

type industries, that employee is long gone and that is probably the 

biggest issue on this thing is that, and it is one of the biggest problems with misuse of SSNs in the application process of it is that 

if that person used false identification or purported to have a false 

identification, was turned away from SSA initially or whatever, we 

are never able to find that person because the information was all 

false that they had and they are gone into society. 

That is probably the biggest problem with the no-match letters 

is that most cases are the biggest violators—or not violators, the 

biggest recipients of no-match letters are large industries are very 

transient. That is probably the biggest issue of it is that that employee is no longer there because it is a year later when the tax 

information comes in. 

Mr. RYAN. But it also seems like the way the system is configured now, a person could still get away with possessing a wrong 

Social Security number even through this system, correct? 

Mr. O’CARROLL. Yes. 

Mr. RYAN. Even after the no-match letter person who really is 

not who they say the are, using some other Social Security number, 

could still continue using it? 

Mr. O’CARROLL. That does happen, yes. 

Mr. RYAN. All right, thank you. Mr. Bertoni? 

Mr. BERTONI. Yes, we did some work on that last year, the electronic suspense file whereby wages that do not match, the name, 

date of birth, Social Security, end up in this file with billions of 

records and, yes, in fact we have seen Social Security numbers with 

all zeros, all 9s, all 8s, ‘‘ABCDEFG’’ that are being used and people 

are working under them. We have recommended to IRS, DHS to 

pick up the enforcement effort. 

Mr. RYAN. Thank you. 

Chairman MCNULTY. Thank you, Mr. Ryan. If there are no further inquiries, I want to thank Mr. Bertoni, Mr. Winston and Mr. 

O’Carroll for your testimony. It has been very helpful. We do intend to try to move legislation. I would ask that the witnesses continue to be available to the Members and our staff as we try to 

move in that direction, thank you very much. 

In the interest of time, while panel three is coming to the podium, I would just like to introduce the Members of the panel. We 

have Justin Yurek, president of ID Watchdog of Denver, Colorado; 

Stuart Pratt, president of Consumer Data Industry Association; 

James D. Gingerich, director, Administrative Office of the Courts 

of the Supreme Court of Arkansas, on behalf of the Conference of 

State Court Administrators; Annie Anto ́n, associate professor of 


ccoleman on DSK8P6SHH1PROD with HEARING
118 

Software Engineering, North Carolina State University, on behalf 

of the Association for Computing Machinery; Marc Rotenberg, executive director of the Electronic Privacy Information Center; and 

Gilbert Schwartz, partner of Schwartz & Ballen, LLP, on behalf of 

the Financial Services Coordinating Council. 

I want to thank all the witnesses for being here and sharing your 

expertise today and for your patience in waiting for the other two 

panels to testify. All of your statements will appear in the record 

in their entirety. We would ask each one of you to summarize your 

statement in as close to 5 minutes as you can. Just keep an eye 

on the little device in front of you to give you an indication when 

you should wrap up. So with a summary of your testimony, it 

leaves a little bit more time for Members to make inquiries. I think 

we will start with Mr. Yurek and go right down the line and hear 

everyone’s testimony first and then allow the Members to inquire. 

Mr. Yurek? 

STATEMENT OF JUSTIN YUREK, PRESIDENT, ID WATCHDOG, 

DENVER, COLORADO 

Mr. YUREK. Thank you, Mr. Chairman and Members of the 

Committee. My name is Justin Yurek and I am the president of ID 

Watchdog Corp. ID Watchdog is an identity theft detection and resolution company that helps consumers to protect themselves from, 

and resolve issues related to, identity theft. Our firm experiences 

firsthand the pain and suffering of the consumer at the hands of 

identity thieves and it is this pain that I wish to highlight to do. 

Ultimately, the question of legislative reform comes down to an 

analysis of the expenses incurred by business and government and 

restricting access to sensitive data, such as Social Security numbers, versus the benefit such action would afford consumers. I wish 

to illustrate these benefits to consumer victims by way of case 

study. Rather than dealing with faceless statistics, I would like to 

tell the story of one of ID Watchdog’s clients. I believe there is 

great benefit in looking at the specifics of his one case to determine 

general facts about all identity theft. 

We first met our client, Charlie W., in April of 2006. Initially, 

Charlie asked us to perform a full background check to ensure that 

his personal data records were accurate. ID Watchdog pulled data 

from thousands of databases that cover 13 crucial areas of consumer information. The shocking results revealed the following incidents in Charlie’s name which he was not responsible for. I apologize for the laundry list I am about to say, but I think all the details are important: Four traffic citations in Florida, Washington 

and Arizona; three felony arrests for assault and harassment in 

Washington; a conviction for assault where he served, supposedly, 

144 days in jail in Washington; an active national warrant for arrest in Washington for bail jumping; an active warrant for arrest 

in Arizona for failure to appear; a newly issued driver’s license in 

Florida; several thousand dollars of unpaid medical bills in Washington and Florida; and several thousand dollars of phantom 1099 

income dating back to 1996. 

A practicing Buddhist, Charlie had never had so much as a 

speeding ticket, let alone felony arrests for assault. Additionally, 

Charlie was a resident of Colorado and had never been to Florida, 


ccoleman on DSK8P6SHH1PROD with HEARING
119 

Washington or Arizona. Dismayed, he immediately engaged us to 

assist in restoring his name. 

A few weeks after Charlie engaged ID Watchdog to help him, his 

employer did a routine background check. As a result, Charlie was 

called into an office where he was to be fired, arrested and sent to 

Washington to face the active warrants there. We quickly intervened on Charlie’s behalf and by providing photographs and fingerprints were able to save Charlie, termination, arrest and extradition. 

Along side these very direct problems, Charlie also suffered significant secondary problems. First, his access to loans in order to 

finance and expand his business was limited due to his damaged 

credit reports. Second, he paid inflated car and medical insurance 

rates as a result of his damaged driving and medical records. 

Third, Charlie paid inflated interest rates on his mortgage and 

other lines of credit due to his unfairly lowered credit score. 

A month later, the thief who was plaguing Charlie’s identity was 

tracked to a car dealership in Louisiana where he was attempting 

to purchase a new vehicle using Charlie’s identity. We immediately 

alerted the local sheriff’s office who dispatched an officer to confront the thief. Once on the scene, the officer found that without 

an active warrant in Louisiana, he did not have proper cause to arrest the thief and planned to let him go. In response, ID Watchdog 

quickly called law enforcement officials in Washington state to 

have them fax over the active national warrant to the Louisiana 

authorities. After the Louisiana parish sheriff’s office was able to 

verify that the warrant was still active, the thief was finally arrested. 

The thief’s real name was Hugh P. For more than 10 years prior, 

Hugh had stolen Charlie’s wallet, which contained his driver’s license and health insurance card. The health insurance card had 

Charlie’s Social Security number printed on it. Over the years, 

Hugh had used Charlie’s identity in every brush with law enforcement, whenever he needed medical treatment, and whenever he 

had 1099 income which he did not want to claim for tax reasons. 

In Hugh’s own words, ‘‘It was very easy to use his ID and Social 

Security number. No one ever looks twice at them. To be honest, 

I never dreamt I would be caught.’’ 

The case of Hugh and Charlie illustrates the key problems with 

the system as it stands today. Social Security numbers are overexposed and overused, giving thieves too much access to sensitive 

data. Entities lack standard client authentication procedures leading to easy proliferation of the crime and law enforcement agencies 

lack multi-jurisdictional cooperation and effective laws leading to 

ineffective investigation and prosecution of the crime, as well as 

fearless criminals. 

I applaud the Committee’s commitment to this topic. As discussions continue, I would ask that you focus on the three previously 

mentioned areas when considering new legislation: Easily accessible Social Security numbers, lack of client authentication practices and lack of multi-jurisdictional cooperation and effective laws 

are at the heart of the crime’s popularity with criminals and therefore must be at the heart of any legislation aimed to stop identity 

theft. 


ccoleman on DSK8P6SHH1PROD with HEARING
120 

Finally, as the Committee continues to develop improved legislation, I would ask they keep in mind individual stories, such as 

Charlie’s, and the trials and tribulation that he experienced. After 

all, hardworking, innocent, upstanding individuals like him will be 

the true beneficiaries of effective legislative change. 

Thank you very much. 

[The prepared statement of Mr. Yurek follows:] 

Prepared Statement of Justin Yurek, President, 

ID Watchdog, Denver, Colorado 

Mr. Chairman and members of the Subcommittee, 

My name is Justin Yurek. I am the president and co-founder of ID Watchdog, a 

Denver-based identity theft detection and resolution company. Since2005, ID Watchdog has assisted identity theft victims in resolving identity theft related problems. 

Our comprehensive process encompasses all aspects of identity theft from detection of the crime, to scoping and resolution. During the process, ID Watchdog takes 

a limited power of attorney and actually carries out the recovery process on behalf 

of our clients. Based on this experience, we believe that we have a unique perspective on identity theft as we have interfaced with all applicable entities involved in 

the problem—from law enforcement, to government, to creditors, to collection agencies, to reporting agencies, and so on. In addition, our diverse client base has given 

us the opportunity to deal with all types of identity theft—from financial, to criminal, to medical, to family identity theft, etc. 

I appreciate the opportunity to share our broad-based familiarity with the topic 

of identity theft and am happy to speak today about the role of Social Security numbers (SSNs) in identity theft and about the need to enhance SSN privacy. 

Introduction: 

The purpose of my testimony is to underscore the plight of the consumer in the 

problem of identity theft. Often the problems of the consumer are overshadowed by 

losses sustained by business interests affected by the crime. Unlike the direct-losses 

absorbed by businesses, the effects of identity theft to an individual victim are consequential damages, and therefore less quantifiable. Nonetheless, the effects of identity theft to individual victims are devastating. The problem of identity theft is not 

a simple one and unfortunately continues to grow at an alarming rate. Identity theft 

is the fastest growing white collar crime in America; growing from fewer than 

100,000 cases in 2000 to over 10 million new cases in 2006. At the same time that 

raw incidents of identity theft have grown, so has the scope and nature of the crime 

itself. While largely associated with financial consequences, identity theft crimes 

have gone well beyond credit reports into other more troubling areas. According to 

Federal Trade Commission statistics, only 30 percent of crimes reported last year 

were related to financial and credit report relevant matters. The newest and fastest 

growing segments of identity theft include medical, tax, and criminal related identity theft. 

As the scope and nature of the crime broadens, we also see the time and energy 

required to recover from the crime increasing. We are now faced with a crime that 

is happening to more individuals and is simultaneously escalating in severity and 

consequence for the victims. With current protections, identity theft is not a matter 

of ‘‘if’’ for consumers; it is a matter of ‘‘when,’’ as everyone will ultimately become 

a victim to some degree. These trends cannot be allowed to continue and the Subcommittee is in an excellent position to affect significant improvement on the current identity theft epidemic by enacting legislation that would directly affect the dissemination, use, and misuse of the social security number—undoubtedly the most 

important weapon in an identity thief’s arsenal. 

The Social Security number was not designed to serve as a universal, unique, personal identifier. However, it has developed over time to fill that role in government, 

military, public and private sectors. Despite becoming the de facto standard, there 

have been very few formal development efforts for the protection of this important 

identifier, resulting in a dangerous imbalance between the importance and accessibility of the SSN on one hand, and the protections afforded to the individual on the 

other. 

I will detail a few case studies from ID Watchdog’s own client base to show the 

problem of identity theft from a consumer point of view. I hope to illustrate the desperate need for legislative reform to ease the damage inflicted to a rapidly growing 

number of citizens. 


ccoleman on DSK8P6SHH1PROD with HEARING
121 

Charlie W. realized that he was an identity theft victim when we performed a full 

background check on him in April of 2006. Analyzing thousands of reports in 13 crucial areas, ID Watchdog found the following fraudulent activity in Charlie’s name: 

2 traffic citations in Florida, several thousand dollars in medical bills in Washington, a traffic citation in Washington for driving with a suspended license, 3 felony convictions in Washington, a record of 144 days spent in jail in Washington, 

a warrant for his arrest for bail jumping in Washington, an arrest for DUI in Arizona, a second warrant for his arrest for failure to appear in Arizona, a new drivers 

license in Florida, a bill for an ambulance ride in Florida, and unaccounted-for 1099 

income for work done in several states. Shortly after contracting with ID Watchdog 

to resolve these issues, Charlie’s employer pulled a routine background check and 

found all of this data as well. Charlie was threatened with termination from his job, 

arrest, and extradition based on his active warrants. ID Watchdog intervened on his 

behalf and Charlie was neither arrested nor fired. However, it took several months 

of additional work to quash the outstanding warrants and to absolve him of the 

fraudulent debts. 

Charlie’s problems started a decade ago when the perpetrator of his identity theft 

stole his wallet. The thief used Charlie’s identification documents including his Social Security number to perfect his impersonation of Charlie. Despite not realizing 

that he was a victim, Charlie suffered numerous damages during this 10-year period. First, he paid inflated car insurance rates as a result of his damaged driving 

record. Second, his access to loans in order to finance and expand his business was 

limited due to his damaged credit reports. Third, Charlie paid inflated interest rates 

on his mortgage and other loans and credit lines due to his erroneously negative 

credit reports. These monetary damages were then coupled with the emotional damage related to his close call with his employer as well as the stress of completing 

the restoration process. 

Anita J. became a victim of identity theft after she began applying for mortgages 

online. Shortly after submitting her personal data to several mortgage brokerage 

sites, fraudulent activity began occurring within Anita’s identity. Over the next several months an industrious identity thief purchased four properties in Anita’s name. 

The combined value of the mortgages attached to these properties approached $1 

million. Anita took a hiatus from her mortgage shopping and it wasn’t until several 

months later, when she began investigating new mortgages again, that she realized 

she had been victimized. By the time she became aware of her problem; all four 

properties had been placed in foreclosure. Non-payment of the mortgages had 

dropped her credit scores more than 200 points. Collection companies eventually 

found Anita and began to demand payment for the delinquent accounts. Anita’s 

credit card companies noticed the sudden drop in her credit scores and began to 

ratchet up her once low interest rates to above 20 percent. Appalled that all of this 

had occurred, Anita began the arduous process of repairing this damage and winning back her good name. Her efforts began to take a toll on her work. The long 

hours she spent writing letters to credit bureaus, dealing with title companies related to the properties, and phone calls made patiently trying to explain to unsympathetic collection agencies that ‘‘they had the wrong person,’’ eventually raised 

Anita’s stress to unhealthy levels. She began to log the time she was spending on 

the problem and surpassed 400 hours before finally enlisting our help. 

Anita was quickly absolved of the debts that had illegally been acquired in her 

name. However, the rest of her case demanded more attention. Removing the delinquent mortgages and foreclosures from each one of her three credit reports presented a significant challenge—even with police reports and clear evidence of her 

innocence. Harder still was the removal of her name from public records related to 

the foreclosure and title work of the properties. This kind of straight forward ‘‘new 

account’’ ID theft is one of the most classic forms of the crime. Although the dollar 

amount involved is extremely high, this case and the steps required to solve it represent a very large portion of the 10 million cases of identity theft reported last 

year. 

David H. realized that he was a victim of identity theft after he returned to the 

United States from Japan, where he served in the US Air Force. David was victimized not by one, but two separate thieves in different parts of the country. After receiving a couple of mysterious calls from collection agents, David checked his credit 

report to find over 20 fraudulent accounts in his name. David was shocked to find 

cell phone accounts, credit cards, utilities, and hospital bills that were in his name, 

but that he did not open. Not only did David have no prior knowledge of these accounts, he was not even in the United States when they had been opened. David’s 

predicament quickly became worse when he was informed by his manager at work 


ccoleman on DSK8P6SHH1PROD with HEARING
122 

that he was being fired because a background check found a felony drug conviction 

in Arizona. Once again, these alleged incidents occurred when David was abroad in 

the Air Force. After a long, drawn out process that involved filing extensive paperwork with the local magistrate in Arizona and reissuing a new driver’s license, the 

arrest records were purged from David’s background. Additionally, he was eventually reinstated to his old job; however, David’s troubles were not yet over. Several 

months later, David received notice from the state of Illinois that 60 percent of David’s wages were to be garnished due to unpaid child support payments. Not surprisingly, David had never met the woman who was receiving the payments, and 

was not in the country at the time the child was conceived or born. After two weeks 

of work and several in-person interviews with child services personnel, David was 

absolved from the payments. 

Military personnel have traditionally been at high-risk for identity theft because 

of the military’s use of Social Security numbers for identification. The number is 

often prominently displayed on ID cards and even on an individual’s bunks in some 

cases. To date, David has spent one and a half years defending himself from false 

accusations and restoring his good name. He has been subjected to harassment from 

collection agencies, his credit score has been crushed, and he had to endure the humiliation of being fired from his job under the stigma of a false criminal conviction. 

He has been falsely accused of fathering illegitimate children and nearly lost 60 percent of his income as a result. Adding final insult to injury, these problems all occurred while David was actively serving his country during wartime. David’s case 

is an example of how there is probably too much reliance by data brokers on the 

Social Security number to authenticate the identity of persons in records from many 

different sources. Today, the majority of David’s problems have been resolved and 

deleted from his records, however he lives in constant vigilance, because the thieves 

could go back to work at anytime. 

In the criminal world, identity theft continues to grow in popularity. It is our 

opinion that 3 driving factors have contributed to this rise in popularity, and that 

these factors need to be addressed by any new legislation. These factors are: 

1. The availability of the Social Security number. 

2. The ease of use of this data to commit fraud due to lack of effective authentication procedures. 

3. The lack of legal consequences for a thief. 

Identity thieves perceive identity theft as a low risk/high payoff crime. This perception will need to be altered to affect significant changes in the growth trends of 

the crime. 

The Availability of the Social Security Number 

Social Security numbers are simply used too much. Before using an identity to 

perform a crime, identity thieves must harvest personal identifying information 

such as name and Social Security number. The flow and availability of this information today affords thieves too many ways to obtain this data. Possible legislative 

changes to consider in order to improve this situation could include the following: 

Companies should be restricted from using the Social Security number for customer identification purposes. The Social Security number should be removed from 

easily accessible public records. Social Security numbers should be removed from all 

forms of identification that might be lost or stolen. Social Security numbers should 

never be sold to unaffiliated 3rd parties for any reason. 

The Ease of Use of This Data to Commit Fraud Due to Lack of Effective Authentication Procedures 

Once a thief has harvested a victim’s identifying information, he must now use 

it for his own benefit. In almost all cases, slight modifications need to be made to 

a victim’s identity before a crime can be committed. For example, a thief opening 

a new credit card account would need to fill out a credit application. On this application he would write the victim’s name and Social Security number, but his own address and telephone number. With his own address on the application, the thief is 

ensured that the new card will be shipped to him rather than to the victim himself. 

With his own phone number, the thief will be able to call to activate the card from 

a phone number that he controls. Additionally, the thief would sign the application 

with his own signature, rather than the victim’s. 

Standardized client authentication practices would greatly curtail potential identity thieves’ ability to materially use identifying information to commit crimes and 


ccoleman on DSK8P6SHH1PROD with HEARING
123 

should be considered for new anti-identity theft legislation. These practices should 

include both high-tech approaches such as cross matching address history and name 

against Social Security number; and low-tech approaches such as signature 

verification. Such standards should be implemented universally for all entities that 

maintain and use the Social Security number and should come with meaningful 

penalties for non-compliance and negligence. 

The Lack of Legal Consequences for a Thief 

Other than the potentially easy and lucrative payouts of identity theft, thieves are 

motivated to commit the crime due to a low prospect of facing prosecution. Two subfactors contribute to this perception of safety. First, existing legislation is too vague 

and oftentimes too different from jurisdiction to jurisdiction to be effective. Further 

clarification of penalties for the misuse of Social Security numbers and identity theft 

along with stricter penalties should be considered in any new legislation. Second, 

thieves currently exploit an environment of non-cooperation and non-communication 

that exists among the many entities involved in the investigation of identity theft. 

The result is a very low arrest rates for identity thieves. The multi-jurisdictional 

nature of the crime is at the heart of this problem. It is imperative for an overreaching entity such as the Federal Trade Commission or the President’s Identity 

Theft Task Force to coordinate between the various entities and jurisdictions involved in the investigation and prosecution and to facilitate open channels of cooperation and communication. With identity theft the thief and the victim are seldom in the same place, and as such it is imperative that disparate law enforcement 

agencies have the means to share information and resources. 

The statistics about identity theft are frightening. The sheer number of victims 

stands at an overwhelming 10 million per year. With such proportions, it is easy 

to become numb to these figures; however, it is a useful exercise to look at specific 

case studies to find general guidance for meaningful solutions. Additionally, it is 

vital for all of us to remain in tune with the specific pain and suffering that these 

crimes cause in order to maintain the proper motivation to find a solution. The Subcommittee has shown great leadership and tenacity over the past seven years in 

continuing to explore measures to limit identity theft. I implore you to continue your 

efforts and hope that when considering the costs associated with changes in legislation (especially costs to business), those costs should be weighed against the benefits 

that would be afforded to consumers such as Charlie W., Anita J., and David H. 

f 

Chairman MCNULTY. Thank you, Mr. Yurek. 

Mr. Pratt. 

STATEMENT OF STUART PRATT, PRESIDENT, CONSUMER 

DATA INDUSTRY ASSOCIATION 

Mr. PRATT. Mr. Chairman, Ranking Member Johnson, and 

Members of the Committee, thank you for this opportunity to appear before you today. My name is Stuart Pratt. I am president 

and chief executive officer of the Consumer Data Industry Association. 

Let me start by saying that the CDIA supports efforts to limit 

the sale and display of the Social Security number to the general 

public. We also believe that sensitive personal information, like a 

Social Security number, should be secured. But we also believe in 

preserving the Social Security for legitimate uses for business to 

business and business to government transactions. Some context I 

think for that point is important. Forty million addresses change 

in this country every year. Three million last names change due to 

marriage and divorce. There are many other examples in our written testimony but in fact most identifiers change and our names 

are not unique. A unique identifier is important to fair information 

uses. 


ccoleman on DSK8P6SHH1PROD with HEARING
124 

Consumers have expectations and the Social Security number 

plays a role in meeting these expectations. Consumers expect data 

about them to be accurate. Consumers want to be protected from 

fraud. Data about them should be protected and secured. There are 

Federal laws that exist today, and they are effective and the operation of these should be preserved. Some examples are the GrammLeach-Bliley Act and the Fair Credit Reporting Act and there are 

other examples in our testimony. But these laws restrict the use 

and display of the Social Security number. They restrict how it can 

be used, who can use it, and under what circumstances. 

Responsible uses of the SSNs do meet, I think, consumer expectations. This really just is not our view, the GAO concluded in a 

2004 study that Social Security numbers are used to build tools 

that verify an individual’s identity or match existing records since 

there is no widely accepted alternative, and we agree. The report 

further states that restricting business access to Social Security 

numbers would hurt consumers and possibly aid identity thieves, 

since it would be more difficult for businesses to verify an individual’s identity. Again, we agree. 

The Federal Trade Commission in its own testimony has stated 

that SSNs play a vital role in our economy, enabling businesses 

and government and others to match information to proper individuals. For example, consumer reporting agencies use SSNs to ensure 

the data furnished to them is placed in the correct file, that they 

are providing the right report for the consumer. SSNs are used for 

locator services, to find lost beneficiaries, witnesses, law violators, 

to collect child support, to enforce judgments. 

But the SSN is not the final word on identity verification, and 

I think that this point is very important. The SSN plays a role, it 

is an important role, but data matching does not equate to identity 

verification or authentication. Our Members in fact produce one billion fraud likelihood assessments each year. We also produce 1.4 

billion identity verification assessments each year. It is not just 

about data matching. Identity verification is much more. It is a 

risk assessment based on the deployment of a range of tools that 

consider matches of data, but they also consider application data. 

They also consider timing of application and various components of 

identity and whether or not they have been used previously in 

fraudulent applications. 

We also recognize that the Social Security number has value in 

public records and this is important for this Committee’s consideration. Public records play a vital role in our society. Bankruptcy 

records, tax liens and judgments are part of a credit report. Public 

records help in the location of missing and exploited children. Validating professional licenses is critical for the health care industry. 

Without an SSN to tie these records together, a consumer can simply alter an address, change a name and separate himself or herself from the record. Preserving the SSN in public records is essential, but our Members do support State Government efforts to redact the SSN from the display to the general public, and we think 

there is good progress being made on that front. 

Finally, some building blocks of good public policy should include 

preemption. If you are going to establish a national standard, let’s 

get it right and have a national standard and not a fifty-first state 


ccoleman on DSK8P6SHH1PROD with HEARING
125 

1 CDIA, as we are commonly known, is the international trade association representing over 

300 consumer data companies that provide fraud prevention and risk management products, 

credit and mortgage reports, tenant and employment screening services, check fraud and 

verification services, systems for insurance underwriting and also collection services. As we will 

discuss below, the secure and protected use of the social security number (SSN) is an important 

key to the effectiveness of these systems and services. 

law. Preserve the operation of current laws, like the Fair Credit 

Reporting Act, and I think this is where we may differ with some 

of the approaches thus far. The Fair Credit Reporting Act is a wellestablished statute, as is the Gramm-Leach-Bliley Act, including 

information safeguards. Ensure that the appropriate rulemaking 

authority is bounded and that it takes into consideration small 

business implications and the Regulatory Flexibility Act. 

In conclusion, our Member’s uses of the SSN meet consumer expectations. Data used is accurate, fraud can be prevented, identities can be better verified, public records are useful in our society. 

We appreciate this opportunity to testify, and we look forward to 

your questions. 

[The prepared statement of Mr. Pratt follows:] 

Prepared Statement of Stuart Pratt, President, 

Consumer Data Industry Association 

Chairman McNulty, Ranking Member Johnson and members of the subcommittee, 

thank you for this opportunity to appear before you today to discuss the importance 

of Social Security numbers. For the record, my name is Stuart Pratt and I am president and CEO of the Consumer Data Industry Association.1

Our members applaud this committee for the thoughtful and open dialogue that 

you have fostered regarding how Social Security numbers are used, to identify risks 

associated with such use, and to address these risks in a reasonable, targeted fashion. 

As a preliminary matter, CDIA supports efforts to limit the sale and public display of Social Security numbers. CDIA’s members do not publicly sell or display Social Security numbers to the general public, and we oppose such activity. However, 

as will be discussed below, such restrictions have to be carefully considered, balanced and bounded so that restrictions on use do not interfere with legitimate business uses of SSNs to detect and prevent ID theft and financial fraud and for other 

beneficial purposes. 

• The SSN is the only unique, individual identifier that follows a person 

throughout their lives, literally from the time they are born. 

SSNs are important to the smooth operation of today’s economy because there is 

no other single identifier that serves the same purpose as effectively as the SSN. 

Although there are other identifiers that may serve similar purposes in some contexts, there are no other identifiers that serve this role across all individuals and 

circumstances. 

For instance, name and address can’t be used because they are too common, 

change due to marriage and divorce, and, according to the U.S. Census Bureau, 42 

million consumers move every year. Even for consumers who’s address and name 

are constant, they do not always use their identifiers inconsistently (i.e., in some 

instances they will use a nickname, and may inconsistently use their generational 

designations (e.g., III, or Sr.)). There are also times where consumers themselves 

make mistakes when completing applications. Thus, a consumer’s identifiers may be 

presented in different ways in different databases and, in some cases, the data may 

be partially incorrect. Further, personal identifiers such as name and birthday, are 

generally not as unique as we may believe they are. 

Further, the use of other alternatives that could possibly serve as a substitute for 

an SSN, such as a cell phone number or driver’s license number, is often restricted 

by law. 

Thus, the SSN is a truly unique identifier. 

As the only unique identifier, the use of the SSN has migrated beyond simply 

keeping track of social security payments, even within the Federal Government 

itself. For example, it is used for tax purposes, Selective Service registration, employment verification, the provision of government benefits and a host of other uses. 


ccoleman on DSK8P6SHH1PROD with HEARING
126 

In addition, the use of the SSN is often mandated by the Federal Government. For 

instance, the Treasury Department regulations regarding PATRIOT Act compliance 

for financial institutions in many instances requires financial institutions to use the 

consumer’s full SSN, as obtained from ‘‘trusted [private] sources,’’ such as credit bureaus. Additionally, many State laws require the use of the SSN for a wide range of important purposes dependent on accurate identification. For instance, to meet requirements of the law, government data often must be cross-checked or enhanced 

with data from private sector databases. 

For the private sector, the role of the SSN is that it serves as a unique identifier 

that is permanent, so a consumer cannot voluntarily relinquish it in bad times, and 

it is consistent across various systems. For example, a financial institution, a wireless communications company and a hospital can all rely on the same identifier for 

widely divergent purposes, all to help ensure that the individual before them is the 

person they believe is before them. Said differently, after having verified that a consumer is legitimate, a bank, for example, can then create a unique identifier such 

as a customer or PIN number. But as long as the bank is dependent on third-party 

sources to cross-check applicant data, unique identifiers must cut across external 

data sources. 

CURRENT LAW PROTECTS THE PUBLIC FROM INAPPROPRIATE USE 

There are several federal and state laws and regulations that restrict the use or 

disclosure of SSNs, including: the Gramm-Leach-Bliley Act (15 U.S.C. 6826(b)) and 

its implementing regulations (‘‘Privacy Rule’’); the Fair Credit Reporting Act (15 

U.S.C. 1681 et seq.); Section 5 of the FTC Act (15 U.S.C. 41–51); the Fair Debt Collection Practices Act (15 U.S.C. 1601 et seq.); the Health Insurance Portability and 

Accountability Act (Pub. L. 104–191); and the Drivers Privacy Protection Act (18 

U.S.C. 2721 et seq.). Together, these laws restrict the use and display of SSNs, how 

they can be used, who they can (and can’t) be shared with, and under what circumstances. 

The use of the SSN by Credit Reporting Agencies (CRAs), for instance, is governed by both the FCRA and, in most instances, GLB as well. These statutes limit 

how and when CRAs can disclose SSNs, to whom, and under what circumstances. 

For instance, many CDIA-member products are focused on helping consumers to 

gain access to the goods and services for which they apply—assisting a lender or 

other service provider in determining a consumer’s eligibility. These products are 

regulated under the Fair Credit Reporting Act (15 U.S.C. 1681 et seq.) as ‘‘consumer 

reports.’’ Eligibility determinations include applications for any type of credit including unsecured credit, home purchases, auto financing, home equity loans, as well 

as for insurance of all types, employment, government benefits, apartment rentals, 

and for other business transactions initiated by the consumer. 

The FCRA, enacted in 1970, has been the focus of careful oversight by the Congress, resulting in significant changes in both 1996 and again in 2003. There is no 

other law that is so current in ensuring consumer rights and protections are adequate. 

Similarly, some fraud detection tools are regulated under GLBA, and the use of 

data regarding those products is similarly circumscribed. 

Beneficial Uses of the SSN 

Because the SSN allows for consistency across various systems and data bases, 

there are a number of ways that the SSN is used that benefits consumers. Further, 

without the availability of the SSN, many of the products and services that consumers take for granted today could become more scarce. 

For instance, CDIA’s members produce a range of critical consumer data products 

which bring great value to individual consumers, to society, and to the nation’s economy. Our members design products used for determinations of a consumer’s eligibility for a product or service, to prevent identity theft and fraud and to aid in the 

location of consumers for a variety of reasons. 

(1) Proper File matching: Ensuring that data goes to the right file, and is reported 

about the right individual. 

Lydia Parnes, Director of the Bureau of Consumer Protection at the Federal 

Trade Commission, recently testified about the importance of Social Security numbers before the Senate Judiciary Subcommittee on Terrorism, Technology and 

Homeland Security: 

‘‘SSNs play a vital role in our economy, enabling businesses, government, and others to match information to the proper individual. For example, consumer reporting 


ccoleman on DSK8P6SHH1PROD with HEARING
127 

2Kitchenman, Walter., U.S. Credit Reporting: Perceived Benefits Outweigh Privacy Concerns, 

Pp. 5 (1998). 

agencies use SSNs to ensure that the data furnished to them is placed in the correct 

file, and that they are providing the right credit report for the right consumer. SSNs 

also are used in locator databases to find lost beneficiaries, witnesses, and law violators and to collect child support and other judgments. Employers must collect SSNs 

for tax reporting purposes, and health care providers may need them to facilitate 

Medicare reimbursement.’’ She went on to say that ‘‘the SSN is valuable in enabling 

entities to match information to consumers. With 300 million Americans, many of 

whom share the same name, the SSN presents significant advantages as a means 

of identification because of its uniqueness and permanence.’’ 

Financial institutions and others rely on full and complete information from credit 

bureaus. Complete information is necessary if the appropriate information is to be 

placed in the proper consumer account. As an example, a financial institution may 

obtain information from a credit bureau on its customer named Tom Jones. As you 

can imagine, there are thousands of Tom Joneses in the country. In fact, it is likely 

that many Tom Joneses share the same last four digits of their SSN. Therefore, a 

report with information pertaining to Tom Jones with the last four digits of 1234 

may not provide the financial institution with sufficient information to determine 

to WHICH Tom Jones the report refers. 

SSNs, therefore, help to ensure that our members are more likely to load data 

to the correct file with a high degree of precision. This is particularly true where 

a new account has been opened and is being added to the consumer’s file for the 

first time. Consumer reporting agencies of all types have, under the Fair Credit Reporting Act, a duty to maintain reasonable procedures to ensure the maximum possible accuracy of the file; SSNs help them meet this requirement. 

SSNs also help to ensure that the proper consumer’s file is produced when a consumer applies for a benefit under the FCRA. If a consumer reporting agency cannot, 

with precision, identify the proper file of the consumer, it returns a message to the 

creditor indicating that no record was found. This result would likely lead to far 

higher credit denials for consumers due to the inability of the creditor to review the 

consumer’s credit history. Said differently, the Fair Credit Reporting Act certainly 

does not contemplate the consumer reporting agency ‘‘taking a guess‘‘ as to which 

consumer’s file must be accessed and thus this current liability coupled with the absence of the SSN would seriously impinge on the way in which credit is granted in 

this country today. 

(2) Identity Verification to Prevent Identity Theft and Fraud 

A number of CIDA members produce products that are used by financial institutions, insurance companies and others to verify the identity of an individual and ensure that the person they are interacting with is who they say they are. These products are very effective in detecting and preventing identity theft and financial fraud 

before it happens. 

The SSN helps businesses to prevent fraud by cross-checking applicant data 

against various other data sources in order to authenticate the consumers’ identity. 

Absent the use of an SSN, these systems will be far less likely to trigger security 

protocols, which prevent the crime of identity theft. 

In 2004, the GAO conducted a study on Social Security numbers, and concluded 

that ‘‘information resellers, credit reporting agencies and health care organizations 

use social security numbers to build tools that verify an individual’s identity or 

match existing records since there is no widely accepted alternative.’’ The report further states that ‘‘restricting business access to social security numbers would hurt 

customers and possibly aid identify thieves since it would be more difficult for business to verify an individual’s identity.’’ 

(3) Other specific products and services are enabled and enhanced through the 

availability of the SSN: 

Access to home ownership: Every homeowner benefits from a credit reporting 

system that reduces the costs of all mortgage loans by a full two percentage points, 

thus putting literally thousands of dollars in disposable income into their pockets. 

Homeownership is no longer a luxury of the well-to-do, but is a truly democratized 

American dream enjoyed by nearly seventy percent of the population.2 The SSN 

helps to facilitate the efficient operation of this system, as described above. 

Child support payment enforcement: Access to SSNs dramatically increases 

the ability of child support enforcement agencies to locate non-custodial, delinquent 

parents (often reported in the news with the moniker ‘‘deadbeat dads’’). For example, the Financial Institution Data Match program required by the Personal ResponVerDate Mar 15 2010 05:09 May 13, 2011 Jkt 063017 PO 00000 Frm 00131 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\63017.XXX GPO1 PsN: 63017

ccoleman on DSK8P6SHH1PROD with HEARING
128 

sibility and Work Opportunity Reconciliation Act of 1996 (PL 104–193) led to the 

location of 700,000 delinquent individuals being linked to accounts worth nearly 

$2.5 billion. Child support enforcement agencies report that their efforts are far 

more effective when they have access to the parent’s SSN. One agency reports that 

they are able to locate fully 80 percent more delinquent non-custodial parents when 

the SSN is available, and the Association for Children for Enforcement of Support 

(ACES), a private child support recovery organization, has stated that social security numbers are the most important tool for locating parents who have failed to 

pay child support. 

Locator Services—SSNs are used routinely by law enforcement to locate missing children, fugitives and witnesses to crimes. The ability to conduct an information search using an SSN is essential. Restrictions on access to SSNs in government 

records would hamper the ability of law enforcement to obtain this vital information. Further a number of states report that use of SSNs to match across data bases 

has greatly reduced entitlement fraud. For example, Pension Benefit Information 

(PBI), a private company that locates former employees that are due pension benefits, has indicated that in many cases the SSN becomes the only link between an 

employer and their former employees with vested benefits. Employees move, marry 

and change their name, but the one thing that remains constant is their SSN. 

Locating sex offenders—SSNs are used to locate registered and unregistered 

sex offenders. There are over 560,000 sex offenders in the U.S. Approximately twenty-four percent of these individuals fail to comply with address registration requirements mandated by law. Access to SSNs allows law enforcement to locate sex offenders even when the registration address has not been kept current. 

Employment/security screening: As discussed above, SSNs serve as vital links 

among disparate records that help businesses verify prospective employees’ identities and conduct thorough, accurate background checks to ensure workplace safety 

and business security. 

Small business B-to-B transactions: An SSN is the key business entity identifier to virtually all sole proprietorships or partnerships; as a result, SSNs are necessary to facilitate business-to-business transactions between small businesses. 

Securitized credit markets: Confidence in the U.S. securities market is made 

possible by accurate financial histories compiled using the SSN as a key identifier. 

Restricting use of the SSN could undermine confidence in these securities, resulting 

in substantially higher consumer costs for credit, including mortgages and auto 

loans. 

Insurance fraud prevention—Insurance companies use public record information compiled using social SSNs to detect fraudulent insurance claims. According to 

the National Fraud Center, the average American household pays $200 to $400 a 

year in additional insurance premiums to offset the cost of fraud. This cost would 

likely increase if companies do not have the information they need to detect and 

prevent fraud. 

(4) Additionally, without the use of the SSN, consumers would suffer harm: 

Incomplete data harms consumers: There would likely be an decrease in the 

ability of consumer reporting agencies to properly match incoming information to 

the correct consumer about whom the information relates. Think about the consequence to consumers of having a consumer credit report that does not contain all 

of the accounts that they pay on time and which makes them eligible for the lowest 

cost loans. 

Incomplete data harms our banking system: The absence of the SSN would 

also put at risk the safety and soundness of lending decisions due to less information being included in consumer credit reports due to data matching problems. 

Incomplete data prevents consumer access to goods and services: Think 

about the consequence for consumers when a consumer reporting agency cannot locate the proper file on a consumer and thus a lender, insurer or other service provider wanting to do business with the consumer has to deny the application, or the 

consumer has to pay higher rates. 

INFORMATION SECURITY AND THE SSN 

As discussed above, the use of data like the SSN actually helps to prevent fraud 

and identity theft, by enabling better authentication of consumers, so that a lender 

knows that a loan applicant is you, and not an identity thief. 

However, concerns have been raised that the SSN is a ‘‘key,’’ and all a potential 

identity thief needs to ‘‘unlock’’ a consumer’s credit—that simply is not true. 


ccoleman on DSK8P6SHH1PROD with HEARING
129 

There are 2 basic types of financial fraud that may be perpetrated against an individual. The first is fraud against a person’s existing accounts, such as credit card 

fraud, where a thief obtains your account number or credit card, and charges items 

to that card or drains your existing bank account. While those instances are problematic, and may cause a consumer some stress while getting those problems rectified, they do not cause any long-term harm to the consumer; they suffer no financial liability, and such fraud does not impact their credit in any way. More than 

2/3rds of all ‘‘identity theft,’’ as identified by the FTC, falls into this category. 

The second, and more serious type of financial fraud is what we term ‘‘real name’’ 

fraud, where a fraudster obtains a person’s sensitive personal information, such as 

their SSN and other information, and somehow fools a lender into thinking that 

they are that person. This may enable the thief to open new credit accounts in a 

victim’s name without the knowledge of the victim. While the victim is ultimately 

not responsible for the financial harm, this type of fraud can have serious repercussions for the victim. 

As discussed, while obtaining a person’s SSN may potentially make them susceptible to identity theft, it takes a lot more information, and the ability to use it in 

a way that thwarts the fraud detection tools in place, to commit ‘‘real’’ identity theft. 

Further, the SSN plays a major role in helping to stop such fraud, as well. 

The availability of MORE information, rather than less, is the key to reducing reliance on the SSN. Database matching is often like finger-print matching—the more 

unique data points there are, the more ability there is to identify and authenticate 

an individual. Further, each piece of data reduces the reliance on every other piece. 

However, Congress has limited the use of alternatives, increasing the reliance on 

SSNs. 

For instance, there are other unique identifiers that could help reduce the reliance 

on SSNs, such as Driver’s License numbers, that do exist. However, the Driver’s Privacy Protection Act (DPPA) has limited the ability of data base companies to utilize 

those to supplement, or even supplant, the use of SSNs. 

Wireless cell phone numbers also have the potential to serve that purpose. However, while those numbers are not used for telemarketing, Congress has, in other 

contexts, considered limiting the utility of these numbers for identification and 

fraud detection purposes, as well. 

PUBLIC RECORDS AND THE SSN 

Public records play a vital in our society and bring value to the consumer. Bankruptcy records, tax liens and judgments are part of consumer ‘‘credit’’ reports used 

by lenders to make decisions that implicate safety and soundness. Records of eviction are critical to landlords who must themselves pay the bills and attempt to lease 

properties to consumers who will do the same. Validating professional licenses for 

employment screening agencies is yet another use of public records, as is accessing 

criminal histories. 

Through the development of nationwide databases of public record information, 

our members have solved the problems inherent in having to search through tens 

of thousands of federal and state court houses and agency databases. In this way, 

the SSN is as important an identifier in a public document as it is in a privatesector database. It is a critical identifier for all of the data management reasons we 

discuss above. Without an SSN, a consumer can simply alter a few items of information, such as moving to a new address, or even changing a name and thus separate 

himself/herself from a bankruptcy record, a tax lien, a record of eviction and even 

a criminal history, in some cases. Clearly this is not a positive outcome for consumers or for American businesses which are on the front lines of making, for example, fair and accurate risk based lending and employment decisions, while at the 

same time fighting identity theft and fraud. 

Some federal proposals have suggested that state agencies must limit access to 

the SSN. The concern of the CDIA’s members is that this apparent unfunded mandate will drive under-funded state agencies to either stop requesting the SSN when 

processing vital records, or to simply deny all access to public records containing 

SSNs. 

It is important that public records, including those records containing SSNs, continue to be made available. The open public records system is the cornerstone of the 

U.S. democracy and economy. 

The debate about the presence of the SSN in public records has suggested a possible binary solution, where SSNs could be made available electronically for certain 

entities, but could possibly be redacted for publicly available electronic documents, 

though costs associated with such an unfunded mandate will have to be addressed. 


ccoleman on DSK8P6SHH1PROD with HEARING
130 

It is encouraging to hear state court organizations discussing strategies for protecting SSNs, and CDIA will continue to engage in these dialogues. 

However, while CDIA believes that disclosure of the SSN to the general public 

must be addressed, we also believe that public records must be made available, including SSNs, to those with an appropriate need. Ultimately, dialogue with state 

and federal agencies coupled with the advancement of technologies will address concerns about public records which contain SSNs. An unfunded mandate will destabilize the system of public records which is so important to our democracy. 

• Some Additional Notes on Other Important Issues: 

Finally, there are a few additional issues I would like to highlight before I conclude: 

• Legitimate business uses: 

It is important that any restrictions imposed on the sale or display of SSNs contain exceptions for legitimate business uses such as identity verification; detecting, 

preventing and investigating ID theft and fraud; locating individuals; collecting 

child support and other lawful debts; and for any purposes permitted under the Fair 

Credit Reporting Act and Gramm-Leach-Bliley Act. 

• Preemption: 

Ensuring that the Social Security number issue is addressed in a uniform fashion, 

so that all consumers are protected, is a vital component of this debate. Any legislation that would restrict the sale or display of SSNs must contain federal preemption 

so that businesses are subject to a single, national law rather than having to comply 

with various state laws all with differing and potentially conflicting requirements. 

• Exempt Current Law 

As discussed previously, SSNs are broadly covered by a whole host of current statutes. Instead of adding an additional compliance burden on top of those laws, we 

would urge the Committee to exempt practices already covered under existing laws. 

• Minimize Rulemaking Authority 

Because so many business practices rely on stable laws, CDIA would urge the 

Committee to codify any changes to current law, to the extent possible, rather than 

granting broad authority to the regulatory agencies. 

• Further Assisting Identity Theft Victims: Provide the Ability to 

‘‘Ping’’ the SSN Database 

CRAs utilize very sophisticated tools to ensure the accuracy of their systems. 

However, in rare cases of identity theft, it would be useful for us to have the ability 

to cross-check our databases to determine if a particular SSN is associated with a 

particular person. This would be very useful in further helping ensure the accuracy 

of our databases, and could help contribute to the accuracy of our databases and 

the ability to help correct the records of Identity Theft victims. 

CONCLUSION 

In conclusion, you can see that the underlying theme in the discussion of SSN 

uses is that of balance and ultimately ensuring the security of the number. Law 

that imposes national uniform information security regulations on all who possesses 

the SSN in combination with a person’s name and address, is the most responsible 

and constructive focus for Congress. In contrast, law that overreaches in attempting 

to limit use of the SSN is likely to merely take fraud prevention tools out of the 

hands of legitimate businesses at the expense of consumers. 

Ironically, to prevent fraud you must be able to crosscheck information. To maintain accurate databases, you must be able to maintain a range of identifying elements. Absent the availability of the SSN, we will be less able to build accurate 

databases, to accurately identify records and to help prevent identity theft through 

the development of fraud prevention and authentication tools. 

Ultimately consumers expect us all to accomplish the goals of protecting and securing the SSN, and also ensuring the accuracy and effectiveness of databases 

which contain information about them. 

Thank you for this opportunity to testify. 

f 

Mr. JOHNSON. Thank you, Mr. Pratt. 


ccoleman on DSK8P6SHH1PROD with HEARING
131 

Mr. Gingerich, you may testify. 

STATEMENT OF JAMES D. GINGERICH, DIRECTOR, ADMINISTRATIVE OFFICE OF THE COURTS, SUPREME COURT OF ARKANSAS, ON BEHALF OF THE CONFERENCE OF STATE 

COURT ADMINISTRATORS, WILLIAMSBURG, VIRGINIA 

Mr. GINGERICH. Thank you, Mr. Johnson and Members of the 

Committee. It is an honor to appear before you to have the opportunity to share with you some of the work which has already been 

done and is being actively considered in our Nation’s state court 

systems in this very important area of balancing the public access 

to court records with privacy concerns of individuals. 

As to the specific topic of the hearing today, our country’s state 

court systems have been quite active, as this Committee has, in 

recognizing the serious threat to personal privacy which comes 

from public access to personally identifying information, such as 

the Social Security number. Previously, in hearings of this Committee, members of COSCA have testified about the work undertaken by the Conference of Chief Justices and the Conference of 

State Court Administrators in 2000 and 2001 to develop a recommended comprehensive policy on access to court records and 

suggested that those guidelines be adopted by every state supreme 

court in the United States. On August 1, 2002, CCJ and COSCA 

adopted the resolution endorsing the guidelines and encouraging 

their adoption. 

I am pleased to report that since that testimony, 20 state supreme courts have adopted the guidelines, another eight states 

have made revisions to their previously adopted rules based upon 

the guidelines and five states have commissions currently underway considering adoption of the guidelines. 

About 60 days ago, my own state of Arkansas became the most 

recent state to adopt a comprehensive policy after almost 2 years 

of study and debate. We utilized the recommended guidelines, as 

well as the good work which has been done in many of our sister 

states. As it relates to the Social Security number, let me just read 

you the rule that has now been adopted by the Arkansas Supreme 

Court. It applies to every court record in the state, whether it is 

a paper record or an automated record and whether it lies in the 

supreme court building or any rural courthouse in the state. 

‘‘The following information in case records is excluded from public access and is confidential absent a court order to the contrary 

. . . number four, Social Security numbers; number five, account 

numbers of specific assets, liabilities, accounts, credit cards and 

personal identification numbers; and number eight litigant addresses and phone numbers.’’ Those three exceptions were all borne 

out of our concern about, and our many hours of debate about, the 

very real problem of identity theft. I have to suggest however that 

there were some things that we learned along the way to guide 

how we now implement that policy, which I think are consistent 

with your purposes. 

First of all, the suggestion that we should simply ban the use of 

the Social Security number from any non-Social Security related 

activity is not good public policy and has serious negative consequences on the efficient and accurate operation of State court 


ccoleman on DSK8P6SHH1PROD with HEARING
132 

systems. It also conflicts with many other important public policy 

goals, adopted both at the state level and at the Federal level, 

which require the use of a Social Security number. I will not go 

into all of the issues, but I think my written testimony recites the 

many, many ways in which courts legitimately and appropriately 

have need for that information to do the work of a court system; 

for example when judges need accurate and verifiable information 

in order to enter decisions about assets and income, especially in 

family law cases, and in some states for the accurate identification 

of parties. In Arkansas, we do not use the Social Security number 

at all in criminal cases but, for example, in our juvenile justice system, both in dependency and in delinquency cases we use it in 

order to accurately identify an individual. Our state public policy 

suggests that we are not going to fingerprint children and so it is 

the only way in which we can accomplish that. Those records are 

segregated and sealed but nonetheless it is an appropriate use of 

the Social Security number. There many other ways. So, for Arkansas it was not the case of barring the use of the Social Security 

number but in implementing policies to protect the information 

from unnecessary disclosure. 

There is a second thing we learned; eliminating or restricting access to the Social Security number when the collection of the Social 

Security number has been required by the court or is otherwise required by state or Federal law in the future is an appropriate policy which we support and which we intend to implement. 

As to the ‘‘in the future,’’ our own rule adopted by the Supreme 

Court in Arkansas provides that the implementation date will 

apply only to records that are created after January 1, 2009. After 

looking at the scope of the issues for those files that resided in 

courthouses in millions of records in 75 county courthouses across 

Arkansas, it is simply impossible for us to expect that local officials 

in those courthouses were going to have any ability to go back and 

redact all of those records. So, we looked forward in terms of doing 

the best we could. 

I should add, however, that our court specifically provided authority for the local court officials to redact earlier records if they 

are able to, and that will probably happen on a case by case basis. 

To the extent that collection of the Social Security number is required by the court, when courts are asking people for the information ourselves, we can control it, we can manage it; and so in Arkansas we will adopt a rule similar to that which already exists in 

Washington, Minnesota and North Dakota to separate that information in a separate court file, with only the main file being available to the public. The information like the Social Security numbers will be in a separate file and will be unavailable, either in 

paper or in the automated record. When the Social Security number is otherwise provided in a pleading, for example, or in something that is presented by a lawyer to the court, we have very little 

control over that; but Arkansas will adopt a rule that requires the 

attorneys or parties to protect that information. 

I realize I am out of time, Mr. Chairman, and I would just say 

in conclusion that we recognize the problem. I think our state supreme courts are doing a pretty good job of trying to get to the imVerDate Mar 15 2010 05:09 May 13, 2011 Jkt 063017 PO 00000 Frm 00136 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\63017.XXX GPO1 PsN: 63017

ccoleman on DSK8P6SHH1PROD with HEARING
133 

plementation of the policy which you desire, and we are looking forward to working with you and the Committee in that effort. 

Thank you. 

[The prepared statement of Mr. Gingerich follows:] 

Prepared Statement of James D. Gingerich, Director, Administrative 

Office of the Courts, Supreme Court of Arkansas, on behalf of the 

Conference of State Court Administrators, Williamsburg, Virginia 

Mr. Chairman and Members of the Subcommittee, 

The Conference of State Court Administrators (COSCA) is pleased to present testimony on today’s hearing on protecting the privacy of the social security number 

from identity theft. 

SUMMARY 

Mr. Chairman and members of the subcommittee, the state court community has 

been grappling with the issue of protecting privacy as it relates to court records for 

the past few years. We are taking a proactive stance in protecting the privacy of 

individuals and their social security numbers, while at the same time maintaining 

traditional open court access. Today, we will share examples of what state courts 

that are doing on this via the approval of court rules. 

In collaboration with the Conference of Chief Justices (CCJ), we established a 

project entitled ‘‘Public Access to Court Records: CCJ/COSCA Guidelines for Policy 

Development by State Courts,’’ which outlines the issues that a jurisdiction must 

address in developing its own rules, and provides one approach. The Guidelines 

touch on the use of social security numbers (SSNs) in court records as well as other 

private information. The entire text of the Guidelines can be found online at http:// 

www.courtaccess.org/modelpolicy/18Oct2002FinalReport.pdf. Both CCJ and COSCA, 

adopted a resolution endorsing the Guidelines and urged the states to address them. 

Mr. Chairman, SSNs are pervasive in state court documents and procedures. The 

testimony that follows gives the subcommittee numerous examples of how we use 

SSNs in day-to-day court proceedings. For example, we use SSNs to insure that 

judges have the best evidence available to them. We also use SSNs to collect fines 

and restitution. In addition, many SSNs appear in the public record in many types 

of court cases including, but not limited to, bankruptcy, divorce and child support 

cases. My testimony also details the federal requirements imposed on us to collect 

SSNs for various reasons, for example, to track parents who are not paying child 

support. 

Mr. Chairman, we stand ready to work with you to craft solutions to address the 

problem of identity theft. We want to do our part to eliminate it. We are at the same 

time concerned about the effort to require us to redact or expunge SSNs that appear 

in public records. We feel that this type of requirement would impose an unfunded 

mandate on state courts in this country. The cost to fulfill this requirement would 

be high because many SSNs appear in paper documents as well as other hard-toredact microfilm/microfiche. 

ABOUT COSCA 

Before I begin my remarks, I would like to provide some background on our group 

and our membership. I submit this testimony on behalf of the Conference of State 

Court Administrators (COSCA). The National Center for State Courts, of which I 

am President, serves as secretariat to COSCA. COSCA was organized in 1955 and 

is dedicated to the improvement of state court systems. Its membership consists of 

the principal court administrative officer in each of the fifty states, the District of 

Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern 

Mariana Islands, and the Territories of American Samoa, Guam, and the Virgin Islands. A state court administrator implements policy and programs for a statewide 

judicial system. COSCA is a nonprofit corporation endeavoring to increase the efficiency and fairness of the nation’s state court systems. As you know, state courts 

handle 98 percent of all judicial proceedings in the country. The purposes of COSCA 

are: 

• To encourage the formulation of fundamental policies, principles, and 

standards for state court administration; 

• To facilitate cooperation, consultation, and exchange of information by 

and among national, state, and local offices and organizations directly 

concerned with court administration; 


ccoleman on DSK8P6SHH1PROD with HEARING
134 

• To foster the utilization of the principles and techniques of modern 

management in the field of judicial administration; and 

• To improve administrative practices and procedures and to increase 

the efficiency and effectiveness of all courts. 

Although I do not speak for them today, I also would like to tell you about the 

Conference of Chief Justices (CCJ), a national organization that represents the top 

judicial officers of the 58 states, commonwealths, and U.S. territories. Founded in 

1949, CCJ is the primary voice for state courts before the federal legislative and executive branches and works to promote current legal reforms and improvements in 

state court administration. COSCA works very closely with CCJ on policy development and administration of justice issues. 

STATE COURTS ARE RESPONDING TO PRIVACY CONCERNS 

Mr. Chairman, let me begin by informing you of the progress that many state 

courts are making to protect individual privacy rights, while maintaining the American tradition of open courts. Through court rules, state court systems are changing 

their procedures for viewing and accessing court records as they relate to the appearance of social security numbers. Washington State, for example, is establishing 

a procedure for ‘‘sealing’’ family case court records containing privileged information 

such as social security numbers and financial information. In effect, Washington is 

creating two sets of records: a public and a private one. Vermont is placing the burden on parties to expunge or redact social security numbers from papers filed with 

the court. Minnesota is requiring that parties in a divorce case fill out a confidential 

information sheet, which contains social security numbers, to be kept separate from 

the official record. South Dakota adopted a rule that protects SSNs and financial 

account number information by requiring these numbers to be redacted from documents and submitted to the Court on confidential information forms. 

In addition to the proactive stance we are taking to this issue, we are also responding to some of the demands placed on our court systems by state legislatures 

and governors. In 2005, 53 bills were signed into law by governors dealing with social security number privacy. That’s 17 more than in 2004; an increase of 46 percent. These bills range from simple prohibition of displays of SSNs on public records 

to new expansive criminal and civil statutes that punish wrongdoers and those that 

traffic in social security numbers as a means to steal a person’s identity. In the 2006 

sessions, state legislatures considered 176 measures dealing with social security 

numbers and privacy. Again, this number is an increase over the prior year. 

At the direction of the CCJ and COSCA leadership, we established a special subcommittee of the CCJ/COSCA Court Management Committee to explore privacy protection innovations and share them with the Congress and the Administration. This 

committee meets twice a year at our annual and mid-year meetings. This subcommittee has been researching the issue and is responsible for compiling examples 

of best practices in this area that I am presenting today. 

NATIONAL EFFORT TO CRAFT PUBLIC ACCESS GUIDELINES TO COURT 

RECORDS 

Our project entitled, ‘‘Public Access to Court Records: CCJ/COSCA Guidelines for 

Policy Development by State Courts’’ was a joint effort of CCJ/COSCA and the 

NCSC to give state court systems and local trial courts assistance in establishing 

policies and procedures that balance the concerns of personal privacy, public access 

and public safety. 

The State Justice Institute (SJI) funded this project in 2001 and it was staffed 

by the NCSC and the Justice Management Institute. The project received testimony, 

guidance and comments from a broad-based national committee that included representatives from courts (judges, court administrators, and clerks), law enforcement, 

privacy advocates, the media, and secondary users of court information. 

The Guidelines recommend the issues that a jurisdiction must address in developing its own rules governing public access. The Guidelinesare based on the following premises: 

• Retention of the traditional policy that court records are presumptively open to public access 

• The criteria for access should be the same regardless of the form of the 

record (paper or electronic), although the manner of access may vary 

• The nature of certain information in some court records is such that 

remote public access to the information in electronic form may be inappropriate, even though public access at the courthouse is maintained 


ccoleman on DSK8P6SHH1PROD with HEARING
135 

• The nature of the information in some records is such that all public 

access to the information should be precluded, unless authorized by a 

judge • Access policies should be clear, consistently applied, and not subject to 

interpretation by individual courts or court personnel 

The Guidelines Committee examined the use of SSNs in current court practices. 

They looked at the inclusion of SSNs in bulk distribution of court records, and in 

other private information that courts traditionally protect, such as addresses, phone 

numbers, photographs, medical records, family law proceedings, and financial account numbers. Finally, the Committee examined various federal laws and requirements governing SSN display and distribution by state and local entities. 

On August 1, 2002, CCJ and COSCA endorsed and commended ‘‘the Guidelines 

to each state as a starting point and means to assist local officials as they develop 

policies and procedures for their own jurisdictions.’’ 

STATE COURTS’ INTEREST IN COLLECTING AND USING SOCIAL SECURITY 

NUMBERS 

A question we are often asked is why do state courts utilize SSNs? What is the 

state court interest in collecting SSNs? Why do state courts need to require parties 

to provide their SSNs in the course of state court litigation? The following are some 

of the reasons we use them: 

Accurate determination of assets/income Judges need the most accurate information on assets and income when making their decisions, especially in family law 

cases. In many instances this involves examining assets by a social security number. 

There are numerous examples of individuals giving a false social security number 

to avoid paying child support, for example. The same logic applies in dealing with 

divorce cases in dividing assets. 

Identification of parties A growing number of court systems are using case management information systems in which an individual’s name, address, and telephone 

number are entered once, regardless of the number of cases in which the person is 

a party. The advantage of these systems is to be able to update an address or telephone number for all cases in which the person is a party by a single computer 

entry. SSNs provide a unique identifier by which court personnel can determine 

whether the current ‘‘John Smith’’ is the same person as a previous ‘‘John Smith’’ 

who appeared in an earlier case. 

Courts have often used SSNs to identify criminal defendants as well as parties 

to civil cases. In the future, persons accused of crime will be identified by automated 

fingerprint identification systems (AFIS) which scan fingerprints and classify them 

electronically. The primary future need for SSNs as a means to identify individuals 

will therefore be in civil, not criminal, litigation. 

Collection of fees, fines and restitution by courts SSNs are the universal personal 

identifier for credit references, tax collection, and commercial transactions. 

When courts give a litigant an opportunity to pay an assessment resulting from 

a judgment in periodic payments, the court needs to be able to function as a collection agency. Having the convicted person’s social security number is necessary for 

use of state tax intercept programs (in which a debt to the state is deducted from 

a taxpayer’s state income tax refund) and other collection activities. Some states use 

additional means to enforce criminal fines and restitution orders, such as denial of 

motor vehicle registration; SSNs are often used for these purposes as well. 

Creation of jury pools and payment of jurors SSNs are a necessary part of the 

process by which multiple lists (for instance, registered voters and registered drivers) are merged by computer programs to eliminate duplicate records for individual 

citizens in the creation of master source lists from which citizens are selected at 

random for jury duty. Duplicate records increase an individual’s chance of being 

called for jury duty and reduce the representativeness of jury panels. Some courts 

use SSNs to pay jurors as well. 

Making payments to vendors SSNs are used as vendor identification numbers to 

keep track of individuals providing services to courts and to report their income to 

state and federal taxing authorities. 

Facilitating the collection of judgments by creditors and government agencies 

Courts are not the only entities that need to collect judgements. Judgment creditors 

need SSNs to locate a judgment debtor’s assets and levy upon them. Courts often 

require that the judgment debtor make this information available without requiring 

separate discovery proceedings that lengthen the collection process and increase its 

costs. Federal law now requires state courts to place the parties’ SSNs in the 

records relating to divorce decrees, child support orders, and paternity determinations or acknowledgements in order to facilitate the collection of child support. On 


ccoleman on DSK8P6SHH1PROD with HEARING
136 

October 1, 1999, that requirement was extended to include the SSNs of all children 

to whom support is required to be paid. 

Notification to the Social Security Administration of the names of incarcerated and 

absconded persons The Social Security Administration cuts off all payments to persons incarcerated in federal, state or local prison or jails, and to person who are currently fugitives from justice. The savings to the federal budget from this provision 

are substantial. To implement this process, Social Security Administration needs to 

identify persons who have been sentenced to jail or prison and persons for whom 

warrants have been issued. The agency has traditionally obtained this information 

from state and local correctional agencies. See 42 USC §?1A402(x)(3) requiring Federal and State agencies to provide names and SSNs of confined persons to the Social 

Security Administration. The state courts of Maryland are involved in an experimental program to provide such information directly from court records. The Maryland program has two additional future advantages for state courts. First, the program offers the possibility of obtaining better addresses for many court records; social security and other welfare agencies have the very best address records because 

of beneficiaries’ obvious interest in maintaining their currency. Second, cutting off 

benefits may provide a useful incentive for persons receiving benefits to clear up 

outstanding warrants without requiring the expenditure of law enforcement resources to serve them. 

Transmitting information to other agencies In addition to the Social Security Administration, many states provide information from court records to other state 

agencies. A frequently occurring example is the Motor Vehicle Department, to which 

courts send records of traffic violations for enforcement of administrative driver’s license revocation processes. These transfers of information often rely upon SSNs to 

ensure that new citations are entered into the correct driver record. 

POTENTIAL LEGISLATION 

Mr. Chairman, in the past, this subcommittee has considered various pieces of 

legislation that would, in some form or another, prohibit the display of a person’s 

social security number on a public record. Blanket prohibitions like these will place 

courts in the position of trying to comply with conflicting public policies. We submit 

the following questions for your consideration: 

The Welfare Reform Law requires courts to collect SSNs on court orders granting 

divorces or child support or determining paternity. State laws contain similar requirements in other types of cases in some states. What steps must a court take 

to restrict access to these documents, which are matters of public record in most 

states? 

SSNs appear in many financial documents, such as tax returns, which are required to be filed in court (e.g., for child support determinations) or are appended 

to official court documents, such as motions for summary judgments. What steps 

must a court take to restrict access to these documents, which are also matters of 

public record in most states? 

We were encouraged by language in the report accompanying HR 2971 (Rept.108– 

685, Part 1, p. 21) in the 108th Congress dealing with incidental vs. non-incidental 

appearances of SSNs in public records: 

During Social Security Subcommittee hearings on the bill, court and other public 

records administrators testified they receive numerous documents filed by individuals, businesses, and attorneys that often include SSNs the government did not require to be submitted, and of which they are therefore unaware. They stated redaction of ‘‘incidentally’’ included SSNs would create a serious administrative burden, 

and it would require significant resources to review each document and redact such 

incidental SSNs . . . With respect to SSNs submitted in court documents absent the 

court’s requirement to do so, the individual communicating the SSN in the document, 

not the court, would be held responsible according to Section 108 of the bill. (Emphasis ours) 

In drafting social security legislation, we respectfully ask that you expand on the 

above sentiments in actual legislative language of any future bill. 

Courts will have substantial increased labor costs in staff time to redact or strike 

the appearance of SSNs in paper records or in microfilm/microfiche if a redaction 

requirement is imposed. 

In the event you draft legislation dealing with redaction, we urge you to make 

a distinction between existing court records/documents and future documents. For 

example, requiring a court to retroactively redact or expunge old records would be 

a nightmarish task due to the cost in staff time and the actual compiling of said 

court records. 


ccoleman on DSK8P6SHH1PROD with HEARING
137 

Finally, in an effort to make courts and court records more open, many courts are 

now beginning to make available many public records on the internet either as text/ 

character documents or by scanning and placing them online through imaging software (PDF files). While the removal of SSNS in text/character documents may be 

relatively easy in some computer generated records (XML), other scanned records, 

such as PDF files, will be harder to change necessitating more staff and an increase 

in labor costs. 

OUR FUTURE COURSE OF ACTION 

CCJ and COSCA have recommended that state courts adopt the following policies, 

unless state law directs them otherwise, to protect citizen privacy while providing 

service to litigants: 

Official court files State courts should not attempt to expunge or redact SSNs that 

appear in documents that are public records. As was mentioned earlier, federal law 

requires state courts to place the parties’ SSNs in the records relating to divorce 

decrees, child support orders, and paternity determinations or acknowledgement in 

order to facilitate the collection of child support. The purpose of placing that data 

on judgments is not just to provide it to child support enforcement agencies; it is 

also to provide it to the parties themselves for their own private enforcement efforts. 

Any other interpretation puts the courts in an untenable position—having an affirmative obligation to provide judgments in one form to parties and child support 

enforcement agencies and in another form to all other persons. 

This same reasoning applies to income tax returns or other documents containing 

SSNs filed in court. It would be unreasonable, and expensive, to expect courts to 

search every document filed for the existence of SSNs. Further, court staff has no 

authority to alter documents filed in a case; the social security number may have 

evidentiary value in the case—at the very least to confirm the identity of the purported income tax filer. 

Case management information databases Data in automated information systems 

raises more privacy concerns than information in paper files. Automated data can 

be gathered quickly and in bulk, can be manipulated easily, and can be correlated 

easily with other personal data in electronic form. Data in an automated database 

can also be protected more easily from unauthorized access than data in paper files. 

It is feasible to restrict access to individual fields in a database altogether or to limit 

access to specific persons or to specific categories of persons. Consequently, state 

courts should take steps to restrict access to SSNs appearing in court databases. 

They should not be available to public inquirers. Access to them should be restricted 

to court staff and to other specifically authorized persons (such as child support enforcement agencies) for whose use the information has been gathered. 

Staff response to queries from the public When court automated records include 

SSNs for purposes of identifying parties, court staff should be trained not to provide 

those numbers to persons who inquire at the public counter or by telephone. However, staff may confirm that the party to a case is the person with a particular social 

security number when the inquirer already has the social security number and provides it to the court staff member. 

In short, staff may not read aloud a social security number, but may listen to a 

social security number and confirm that the party in the court’s records is the person with that number. This is the same distinction applied to automated data base 

searches. This distinction is one commonly followed in federal and state courts. 

CONCLUSION 

Mr. Chairman, we recognize the role of SSNs in the incidence of identity theft 

cases. The current state of affairs with regards to the treatment of SSNs provides 

lawbreakers the continued opportunity to exploit the current system at the expense 

of ordinary Americans. The threat of identity theft is real and we want to do our 

part to eliminate it. 

I have presented several ways our courts utilize SSNs. Finding solutions to protect an individual’s privacy will be complex and difficult. Many state courts are already taking steps to fashion solutions in response to the problem. I remind you of 

the earlier mentioned approaches from Washington, Vermont, Minnesota and South 

Dakota. Other states are experimenting with different approaches. 

Thank you for asking for our input on this important matter. The Conference of 

State Court Administrators stands ready to work collaboratively and cooperatively 

to craft solutions to this important issue. I will be happy to answer any questions 

you may have. 

f 


ccoleman on DSK8P6SHH1PROD with HEARING
138 

Chairman MCNULTY. Thank you, Mr. Gingerich. 

Dr. Anto ́n. 

STATEMENT OF ANNIE I. ANTO ́ N, ASSOCIATE PROFESSOR OF 

SOFTWARE ENGINEERING, NORTH CAROLINA STATE UNIVERSITY, RALEIGH, NORTH CAROLINA, ON BEHALF OF THE 

ASSOCIATION FOR COMPUTING MACHINERY 

Ms. ANTO ́ N. Good morning, Chairman McNulty, Ranking Member Johnson and members of the Subcommittee. Thank you for the 

opportunity to testify today. This statement represents my own 

personal position as well as that of the Association for Computing 

Machinery’s U.S. Public Policy Committee. 

By way of introduction, I am an associate professor at North 

Carolina State University and director of an academic privacy research center. In addition, I serve on several industry and government boards of technical advisors, including the DHS State of Privacy and Integrity Advisory Committee. 

Right now, personal information about you, me and millions of 

Americans is being compiled, accessed, sold and exchanged among 

businesses and government agencies. Yet, we should all be concerned. Is that personal information protected? Is it being shared 

only among those with a legitimate need for it? Can criminals easily access our personal information? These concerns are compounded by three factors: First, the widespread use of Social Security numbers has made it a de facto national identification number; 

second, computing technologies enable us to collect and exchange 

and analyze personal information on an unprecedented scale; and, 

third, there are widespread problems with cyber security leading to 

frequent and large security breaches. In particular, technology allows personal information to be combined with Social Security 

numbers, thus creating a convenient way to track individuals 

across public and private records. This raises privacy concerns, and 

these concerns are exacerbated because many businesses use the 

Social Security number as both an identifier and an authenticator. 

The terms ‘‘identifier’’ and ‘‘authenticator’’ have specific technical 

meanings that are often confused. An ‘‘identifier’’ is a label associated with a person. An ‘‘authenticator’’ provides the basis to believe 

that somebody is accurately labeled by some given identifier. So, 

authenticators might be something you know, like a secret password or a pin, something you have, like the key to your house, and 

something you are, such as a biometric. A Social Security number 

is an identifier. It is something that anyone can know, and many 

will, so it is not a secret. Hence, it is unuseable as an authenticator. 

Even though many organizations use it in this way, and this is 

a very big problem. My passport picture coupled with a tamper evidence security seal is an authenticator because it links me, something I am, as embodied my photograph, with my identity. Using 

Social Security numbers for both identification and authentication 

makes them much more valuable to a criminal who is intent on 

stealing someone’s identity. This is a problem of our own making 

and it is a problem that we can eliminate. 

In the time remaining, I will highlight a few recommendations 

from my written testimony. First, we should move away from auVerDate Mar 15 2010 05:09 May 13, 2011 Jkt 063017 PO 00000 Frm 00142 Fmt 6633 Sfmt 6602 I:\WAYS\OUT\63017.XXX GPO1 PsN: 63017

ccoleman on DSK8P6SHH1PROD with HEARING
139 

thentication based on information that is easily compromised. Social Security numbers or mother’s maiden names are poor choices 

for authentication. 

Second, individuals should be empowered to control the dissemination of their Social Security numbers. Congress can support this 

by protecting citizens who prefer not to provide a Social Security 

number when conducting business that does not legally require it. 

Third, we should reduce the exposure of citizen Social Security 

numbers by prohibiting their display on ID cards and in public 

records and by redacting them from existing public records. For example, Choice Point is now redacting Social Security numbers and 

other personal information from reports that it provides to its clients. This practice should be required at other companies and organizations, especially data brokers and credit bureaus. 

Finally, we should require stronger security practices during the 

transmission and storage of Social Security numbers and all other 

personal information. 

In conclusion, Congress is the only entity that can make meaningful changes to protect the privacy and identities of U.S. citizens. 

We are encouraged by your attention to these issues, and the computing professionals that I represent stand ready to help you in 

your efforts. 

Thank you for your attention. I will be happy to answer any 

questions. 

[The prepared statement of Ms. Anto ́n follows:] 


ccoleman on DSK8P6SHH1PROD with HEARING
140 

Prepared Statement of Ana I. Anto ́n, Ph.D. Associate Professor, 

North Carolina State University 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 72 here 63017.072
141 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 73 here 63017.073
142 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 74 here 63017.074
143 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 75 here 63017.075
144 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 76 here 63017.076
145 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 77 here 63017.077
146 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 78 here 63017.078
147 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 79 here 63017.079
148 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 80 here 63017.080
149 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 81 here 63017.081
150 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 82 here 63017.082
151 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 83 here 63017.083
152 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 84 here 63017.084
153 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 85 here 63017.085
154 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 86 here 63017.086
155 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 87 here 63017.087
156 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 88 here 63017.088
157 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 89 here 63017.089
158 

f 

Chairman MCNULTY. Thank you, Dr. Anto ́n. 

Welcome back, Mr. Rotenberg. 

STATEMENT OF MARC ROTENBERG, EXECUTIVE DIRECTOR, 

ELECTRONIC PRIVACY INFORMATION CENTER 

Mr. ROTENBERG. I seem to have a technological problem but 

thank you, Mr. Chairman, Mr. Johnson and Members of the Subcommittee. It is nice to be with you this morning, and I appreciate 

the opportunity to testify on this issue. I have over the years appeared before the Subcommittee on the Social Security number 

issue. I have also litigated a number of the leading Social Security 

number privacy cases, one of which involved a resident in Virginia 

a number of years ago who was asked by the state secretary to provide his Social Security number when he went to register to vote. 

He did not object to that, what he objected to was the fact that the 

state of Virginia was publishing his Social Security number in the 

public voting rolls, and he said that that was a threat to his personal privacy. We wrote a brief for the Federal Appeals Court at 

that time, before people even used the phrase ‘‘identity theft’’ and 

we said if you make the Social Security number available, it will 

make it easier for people to commit the crime of financial fraud. 


ccoleman on DSK8P6SHH1PROD with HEARINGInsert offset folio 90 here 63017.090
159 

Fortunately, the court agreed with us. The state of Virginia and 

many other states changed their practices. Unfortunately, as you 

know, this problem has become quite a bit more severe over the 

last several years. I am going to say a few words about that today. 

One of the key points I wanted to make this morning is actually 

I think the Privacy Act 1974 saw this problem coming and there 

is a provision in the Privacy Act that says very clearly that the 

Federal Government should try to minimize the collection and use 

of the Social Security number. It really should only be used for the 

original intended purposes, as well as a few others that have been 

authorized by law, including the use as a taxpayer identification 

number. But, as we all know, today the Social Security number is 

widely used across the Federal Government. 

It is used also in the financial services sector, which for some of 

the reasons that Professor Anto ́n has described, creates a particular problem for consumers in this country. The Social Security 

number is both an identifier and a password. If you have access to 

someone else’s Social Security number, there is a very good chance 

that you are going to be able to pull up the records on that person 

and also use the number to get access to the content of those 

records, and that is precisely what identity thieves do when they 

use the Social Security number to get access to someone’s credit 

record information. 

Now, I describe in my testimony the problem has not escaped the 

notice of the White House. The President established a Task Force 

on Identity Theft, it was cochaired by the Attorney General, the 

chair of the Federal Trade Commission. We spent a lot of time on 

that task force, and we made some very specific recommendations. 

The task force rightly said that Social Security numbers were contributing to this problem but in our view, they did not go far 

enough to recommend strong solutions to diminish the problem. 

They wanted more enforcement authority to go after people who 

committed the crime of identity theft, but they did not do enough 

in our opinion to limit the collection and use of the Social Security 

number to really get to the problem at its source. 

So the rest of my testimony talks about some of the specific suggestions and actions that I believe the Congress could take to limit 

the problems associated with the misuse of the Social Security 

number, not using it for example as a record identifier, particularly 

in the private sector, not publicly displaying it on Web sites, not 

putting it on identity cards. As I also describe, and it speaks to an 

issue that you raised earlier, Mr. Ryan, I think the more difficult 

we make it for people to use the Social Security number as a general purpose identifier, the more likely it is that businesses will 

come up with other systems of identification that are appropriate 

for a specific context. 

If we think about it, this is actually our commonsense understanding of what an identifier should be. You have a bank account 

number for your banking relationship. You have a credit card number for your credit relationship. You probably have a number for 

your utility bill. That is actually a very good thing because if one 

of those numbers are compromised, it does not create a risk for you 

that all the other account information will be compromised. But 

part of the way to make that system work is to not let businesses 


ccoleman on DSK8P6SHH1PROD with HEARING
160 

1 EPIC maintains an archive of information about the SSN online at http://www.epic.org/privacy/ssn/ [‘‘EPIC SSN Page’’]. 2See, e.g., Greidinger v. Davis, 988 F.2d 1344 (4th Cir. 1993) (‘‘Since the passage of the Privacy Act, an individual’s concern over his SSN’s confidentiality and misuse has become significantly more compelling’’); Beacon Journal v. Akron, 70 Ohio St. 3d 605 (Ohio 1994) (‘‘the high 

potential for fraud and victimization caused by the unchecked release of city employee SSNs 

outweighs the minimal information about governmental processes gained through the release of 

the SSNs’’); Marc Rotenberg, Exec. Dir., EPIC, Testimony at a Joint Hearing on Social Security 

Numbers & Identity Theft, Before the H. Fin. Serv. Subcom. on Oversight & Investigations and 

the H. Ways & Means Subcom. on Social Security, 104th Cong. (Nov. 8, 2001), available athttp:// 

www.epic.org/privacy/ssn/testimonyl11l08l2001.html; Chris Jay Hoofnagle, Legislative 

Counsel, EPIC, Testimony at a Joint Hearing on Preserving the Integrity of Social Security Numbers and Preventing Their Misuse by Terrorists and Identity Thieves Before the H. Ways & 

Means Subcom. on Social Security & the H. Judiciary Subcom. on Immigration, Border Sec. & 

Claims, 105th Cong. (Sept. 19, 2002), available at http://www.epic.org/privacy/ssn/ 

ssntestimony9.19.02.html. 3Marc Rotenberg, President, EPIC, Testimony at a Hearing on Employment Eligibility 

Verification Systems Before the H. Ways & Means Subcom. on Social Security, 110th Cong. (June 

7, 2007), available at http://www.epic.org/privacy/ssn/eevsltestl060707.pdf. 

cut corners by using the Social Security number in place of their 

own record identifier. So, that is a very important part of our recommendation for you today. 

Regarding the bill that has passed out of the Committee on Energy and Commerce, we think it is a good bill. It includes a lot of 

important provisions, but we do have a couple of specific recommendations that we think could make it a bit stronger. One 

issue we are particularly concerned about, and I know it is something that this Committee has considered in the past, and that is 

the issue of state pre-emption. 

Now, you know if you pre-empt the states in this area, a lot of 

legislation that has already been passed that protects the privacy 

of the Social Security number will be effectively overwritten, and 

I think that could be very problematic, particularly in this area 

where things are developing so quickly. So, what I would urge you 

to do on that issue is to establish a Federal base line, make the 

national standard the floor. For the states where there is not protection, you will give them protection. But if it is a baseline, you 

allow the states that are doing more and trying to anticipate some 

of the new problems to go forward and maybe give you some material for the next bill. 

So, thank you very much for the opportunity to testify. 

[The prepared statement of Mr. Rotenberg follows:] 

Prepared Statement of Marc Rotenberg, Executive Director, 

Electronic Privacy Information Center 

I. Introduction 

Chairman McNulty, Ranking Member Johnson, and Members of the Subcommittee, thank you for the opportunity to testify on the misuse of the Social Security number and the escalating problem of identity theft 

My name is Marc Rotenberg and I am Executive Director of the Electronic Privacy 

Information Center. EPIC is a non-partisan research organization based in Washington, D.C.1 Founded in 1994, EPIC has participated in the leading cases involving 

the privacy of the Social Security number and has frequently testified in Congress 

about the need to establish privacy safeguards for the Social Security number to 

prevent the misuse of personal information.2

Two weeks ago in testimony, I urged the Subcommittee to strengthen the privacy 

safeguards for the proposed Employment Eligibility Verification Systems and 

warned that the errors in the Basic Pilot will be exacerbated by the increased dependence on the SSN.3 And, about a year ago, I urged Members of this Subcommittee to reject the use of the SSN as a national identifier and to ensure the 


ccoleman on DSK8P6SHH1PROD with HEARING
161 

4Marc Rotenberg, President, EPIC, Testimony at a Hearing on Social Security Number HighRisk Issues Before the H. Ways & Means Subcom. on Social Security, 109th Cong. (Mar. 16, 

2006), available at http://www.epic.org/privacy/ssn/marl16test.pdf. 5Dep’t of Health, Educ. & Welfare, Secretary’s Advisory Comm. on Automated Personal Data 

Systems, Records, Computers, and the Rights of Citizens 125–35 (MIT1973), available at http:// 

www.epic.org/privacy/hew1973report/. 6Privacy Act of 1974, 5 U.S.C. §?1A552 (a) (2006). 

development of adequate privacy and security safeguards to address the growing crisis of identity theft.4

Today, my statement will focus on the dramatic increase in identity theft in the 

United States that has resulted directly from the misuse of SSN and the need to 

pass comprehensive legislation to limit the use of the SSN as well the need to develop better systems of identification that are more robust. 

II. Summary of Social Security Number History 

Social Security numbers have become a classic example of ‘‘mission creep,’’ where 

a program designed for a specific, limited purpose has been transformed for additional, unintended purposes, some times with disastrous results. The pervasiveness 

of the SSN and its use to both identify and authenticate individuals threatens privacy and financial security. 

These risks associated with the expanded use of the Social Security number and 

identification cards underscore the importance of the hearing today. 

The SSN was created in 1936 for the purpose of administering the Social Security 

laws. SSNs were intended solely to track workers’ contributions to the Social Security fund. Legislators and the public were immediately distrustful of such a tracking 

system, which can be used to index a vast amount of personal information and track 

the behavior of citizens. Public concern over the potential abuse of the SSN was so 

high that the first regulation issued by the new Social Security Board declared that 

the SSN was for the exclusive use of the Social Security system. 

Over time, however, legislation allowed the SSN to be used for purposes unrelated 

to the administration of the Social Security system. For example, in 1961 Congress 

authorized the Internal Revenue Service to use SSNs as taxpayer identification 

numbers. 

A major government report on privacy in 1973 outlined many of the concerns with 

the use and misuse of the Social Security number that show a striking resemblance 

to the problems we face today. Although the term ‘‘identify theft’’ was not yet in 

use, Records Computers and the Rights of Citizens described the risks of a ‘‘Standard Universal Identifier,’’ how the number was promoting invasive profiling, and 

that many of the uses were clearly inconsistent with the original purpose of the 

1936 Act. The report recommended several limitations on the use of the SSN and 

specifically said that legislation should be adopted ‘‘prohibiting use of an SSN, or 

any number represented as an SSN for promotional or commercial purposes.’’ 5

In enacting the landmark Privacy Act of 1974, Congress recognized the dangers 

of widespread use of SSNs as universal identifiers, and included provisions to limit 

the uses of the SSN. The Privacy Act makes it unlawful for a government agency 

to deny a right, benefit or privilege because an individual refuses to disclose his or 

her SSN. Section 7 of the Privacy Act specifically provides that any agency requesting that an individual disclose his or her SSN must ‘‘inform that individual whether 

that disclosure is mandatory or voluntary, by what statutory authority such number 

is solicited, and what uses will be made of it.’’ 6 The Privacy Act makes clear Congress’ recognition of the dangers of widespread use of SSNs as universal identifiers. 

The Senate Committee report stated that the widespread use of SSNs as universal identifiers in the public and private sectors is ‘‘one of the most serious manifestations of privacy concerns in the Nation.’’ Short of prohibiting the use of the SSN 

outright, Section 7 of the Privacy Act provides that any agency requesting that an 

individual disclose his SSN must ‘‘inform that individual whether that disclosure is 

mandatory or voluntary, by what statutory authority such number is solicited, and 

what uses will be made of it.’’ This provision attempts to limit the use of the number 

to only those purposes where there is clear legal authority to collect the SSN. It was 

hoped that citizens, fully informed that the disclosure was not required by law and 

facing no loss of opportunity in failing to provide the SSN, would be unlikely to provide an SSN and institutions would not pursue the SSN as a form of identification. 

But the reality is that today the SSN is the key to some of our most sensitive 

and personal information. The financial services sector, for instance, has created a 

system of files, keyed to individuals’ SSNs, containing personal and financial information on nearly 90 percent of the American adult population. This information is 


ccoleman on DSK8P6SHH1PROD with HEARING
162 

7See, e.g., TRW, Inc. v. Andrews, 534 U.S. 19 (2001) (Credit reporting agencies issued credit 

reports to identity thief based on SSN match despite address, birth date, and name discrepancies); Dimezza v. First USA Bank, Inc., 103 F. Supp.2d 1296 (D. N.M. 2000) (same). See also 

United States v. Peyton, 353 F.3d 1080 (9th Cir. 2003) (Credit issued based solely on SSN and 

name, despite clear location discrepancies); Aylward v. Fleet Bank, 122 F.3d 616 (8th Cir. 1997) 

(same); Vazquez-Garcia v. Trans Union De P.R., Inc., 222 F. Supp.2d 150 (D. P.R. 2002) (same). 8President’s Identity Theft Task Force, Combating Identity Theft: A Strategic Plan 21 (April 

23, 2007) [‘‘ID Theft Task Force Report’’], available at http://www.idtheft.gov/reports/ 

StrategicPlan.pdf. 9Press Release, Office of the Press Sec’y, Fact Sheet: The President’s Identity Theft Task 

Force (May 10, 2006), available at http://www.whitehouse.gov/news/releases/2006/05/20060510– 

6.html. 10Fed. Trade Comm’n, Consumer Fraud and Identity Theft Compliant Data: January–December 2006 (Feb. 7, 2007), available at http://www.consumer.gov/sentinel/pubs/Top10Fraud2006.pdf. 11 EPIC, Comments to the Federal Identity Theft Task Force, P065410 (Jan. 19, 2007), available at http://www.epic.org/privacy/idtheft/EPIClFTClIDlTheftlComments.pdf. 12 Id. at 8. 13 Id. at 8–9. 14 ID Theft Task Force Report at 23, supra note 8. 

sold and traded freely, with virtually no legal limitations. In addition, credit 

grantors rely upon the SSN to authenticate a credit applicant’s identity. Many cases 

of identity theft occur when thieves apply using a stolen SSN and their own name. 

Despite the fact that the names, addresses, or telephone numbers of the thief and 

victim do not match, accounts are opened and credit granted using only the SSN 

as a means of authentication.7

Even the government is susceptible to identity theft based solely on obtaining an 

SSN and the name associated with it. Stolen SSNs are used to file fraudulent tax 

returns and to seek refunds owed to other citizens. When the proper owner of the 

SSN files his tax return it may be rejected as a duplicate and he may be required 

to spend time fixing his records in order to receive his tax refund.8

III. President’s ID Theft Task Force and Nexus Between SSNs and Identity 

Theft 

The growing misuse of the Social Security number and the associated problem of 

Identity Theft have not escaped the notice of the White House. In May 2006, the 

President established an Identity Theft Task Force to ‘‘track down on the criminals 

who traffic in stolen identities and protect American families from this devastating 

crime.’’ 9 The Task Force, chaired by the Attorney General and the FTC Chair, was 

expected to protect the financial information of citizens and reduce the threat of 

identity theft, which the FTC now annually reports is the number one concern of 

American consumers.10

EPIC participated in the task force proceedings and provided extensive comments.11 We supported the Task Force’s recommendation to reduce reliance on SSNs 

at all levels of government. We said: 

Reducing use of SSNs and limiting the amount of data collected by government 

bodies is fundamental to maintaining the security of consumer data. This is an especially critical limitation upon the public sector, since government has the power to 

compel individuals to disclose personally identifiable information. The personal data 

collected by government entities should never be disseminated in public records or 

sold to the private sector. The Task Force should curtail the publicly available 

sources of the SSN, including the Social Security Death Register; bankruptcy filings 

and other court records; birth and death records; and records of other life events.12

EPIC also pointed to the growing problem of the misuse of the SSN by businesses: 

The Task Force should also carefully investigate and analyze SSN use in the private sector, as there is evidence that private sector use of SSNs contributes substantially to the problem of identity theft. Restricting the sale, purchase and display of 

SSNs by private entities is a critical consideration in combating identity theft. The 

private sector must move away from using SSNs as identifiers, a goal which is feasible as demonstrated by Empire Blue Cross’ transition from SSNs to alternative 

identification numbers for its 4.8 million customers.13

The President’s Task Force recognized the connection between the misuse of the 

Social Security number and the crime of identity theft but failed to propose adequate safeguards. According to the President’s Identity Theft Task Force, ‘‘the SSN 

is especially valuable to identity thieves, because often it is the key piece of information used in authenticating the identities of consumers.’’ 14 The SSN is also commonly used by the government and entities in the private sector to identify individuals. As the Task Force noted, ‘‘SSNs—are widely used in our current marketplace 

to match consumers with their records (including their credit files) and as part of 


ccoleman on DSK8P6SHH1PROD with HEARING
163 

15 Id. at 44. 16 Id. at 42. 17 Id. 18 Ellen Nakashima, U.S. Exposed Personal Data: Census Bureau Posted 63,000 Social Security Numbers Online, Wash. Post, Apr. 21, 2007, at A05, available at http:// 

www.washingtonpost.com/wp-dyn/content/article/2007/04/20/AR2007042002208.html. 19Press Release, Dep’t of Justice, Fact Sheet: The Department of Justice’s Efforts to Combat 

Identity Theft (Apr. 23, 2007), available at http://www.usdoj.gov/opa/pr/2007/April/ 

07lopal278.html. 20 Id. 21 Id. 22 Id. 23 Jon Swartz and Byron Acohido, TJX data theft leads to money-laundering scam, USA 

Today, June 12, 2007, available at http://www.usatoday.com/money/2007–06–11-tjx-datatheftlN.htm. 24 Id. 25 Id. 

the authentication process.’’ 15 In short, SSNs function as both a username and a 

password—a single piece of information that both identifies an individual and authenticates that identification, a lock and a key rolled into one. Because of the way 

in which the SSN is used for identification and the prevalence of that use, much 

of your most sensitive information does not even have the same sort of rudimentary 

security as your email account. 

As noted by the Task Force, ‘‘the SSN is a critical piece of information for the 

thief, and its wide availability increases the risk of identity theft.’’ 16 Despite the 

problems associated with using the SSN as an identifier, the Federal Government 

routinely uses SSNs in order to identify individuals within governmental programs. 

SSNs have been included as part of Medicare’s Health Insurance Claim Number,17

and as part of a federal award identifier used by the USDA.18

IV. Identity Theft as a Result of Social Security Number Misuse 

During the past fiscal year, the Department of Justice charged 507 defendants 

with aggravated identity theft. The DOJ highlighted a number of these prosecutions 

in a recent press release.19 A handful of the cases the DOJ put on display involved 

defendants misusing Social Security numbers for illegal purposes. 

In one of the cases, a woman was sentenced to 75 months imprisonment for defrauding FEMA in the wake of Hurricane Katrina.20 The defendant filed 28 fraudulent claims for disaster relief to FEMA using other people’s Social Security numbers. 

After receiving money from FEMA, the defendant went out to buy real estate, a mobile home, vehicles, electronics, furnishings, and other goods and services. 

In another case, six defendants victimized AOL subscribers with a ‘‘phishing’’ 

scheme.21 The defendants ‘‘spammed’’ thousands of AOL users with emails containing fake electronic greeting cards. When the subscribers tried to open the friendly greeting, they were instead met with a software trojan that prevented the users 

from accessing AOL without entering sensitive information including bank account, 

address, and Social Security numbers. The defendants used the stolen information 

to make counterfeit debit cards, which they swiped at ATM machines to get cash, 

and used at online and retail stores to buy goods and services. It appears that we’ve 

gone from ‘‘Hello, you’ve got mail!’’ to ‘‘Hello, you got your identity stolen!’’ 

Another defendant was paid to fraudulently use Social Security numbers and 

other confidential info to get personal phone records of reporters and Hewlett-Packard officials, as well as their family members.22 This case is a clear example of 

‘‘pretexting’’ or posing as somebody else to obtain sensitive calling records. And 

these are just the cases the DOJ chose to highlight. 

There’s also the case of 19 year-old Irving Escobar who bought stacks of $400 gift 

cards from Wal-Mart and cashed them in to buy electronics.23 Escobar went on lavish shopping sprees, charging as much as $112,000 in goods at gift stores. Escobar 

purchased, in total, an estimated $1 million in goods. Amy Osteryoung, assistant 

statewide prosecutor who handled the case for Florida Attorney General Bill McCollum referred to Escobar’s actions as ‘‘[m]odern day money laundering.’’ 24 Also, ‘‘Investigators believe it is the boldest tangible evidence of criminals cashing in on 

hacked data from TJX—the nation’s largest reported computer data breach, which 

TJX disclosed in January.’’ 25 TJX says it will pay for a credit-monitoring service to 

help avert identity theft for customers whose driver’s license numbers were the 

same as their Social Security numbers and were believed stolen. For others, the 

damage has already been done. 


ccoleman on DSK8P6SHH1PROD with HEARING
164 

26 Id. 27 Ellen Nakashima, U.S. Exposed Personal Data: Census Bureau Posted 63,000 Social Security Numbers Online, supra note 18. 28 Id. 29 Byron Acohido and Jon Swartz, Military personnel prime targets for ID theft, USA Today, 

June 15, 2007, available at http://www.usatoday.com/tech/news/computersecurity/infotheft/2007– 

06–14-military-id-theftslN.htm?csp=34. 30 Id. 31 Id. 32 Id. 33 Jerry Carnes, Scammers Target Soldiers’ Families, 11 Alive News, May 30, 2007, available 

at http://www.11alive.com/news/articlelnews.aspx?storyid=97757. 34Privacy Rights Clearinghouse, A Chronology of Breaches, http://www.privacyrights.org/ar/ 

ChronDataBreaches.htm. 35 Id. 36 Id. 

V. Recent Social Security Number Breaches in the Federal Government 

The Social Security Administration’s Office of Inspector General said that 16 percent of the 99,000 fraud cases it investigated in the one-year period ending Sept. 

30, 2006 involved the misuse of Social Security numbers.26 Considering the following cases of breaches in Social Security number data storage, that number might 

be on the rise. 

Recently, a woman named Marsha Bergmeier was bored and did an Internet 

search for her farm’s name in Illinois.27 She discovered a link to fedspending.org, 

a Web site created by OMB Watch to monitor federal spending. While clicking 

around the site, a searchable database popped up for her, containing information 

about her farm loan amount under an Agriculture Department program. Not only 

that, she also discovered the list of 28,000 SSNs, including her own. Published right 

there for everybody with an Internet connection to see.28 The site had been up since 

1996. And that’s just the United States Department of Agriculture. 

The Department of Defense uses Social Security numbers for just about everything; 29 from troop rosters to the dog tags dangling from soldiers’ necks. Since 2006, 

data about almost 30 million active and retired service members has been stolen 

from four Veterans Affairs offices. That’s approximately 30 percent of the 100 million total reported lost or stolen personal data in the United States.30 That’s a lot. 

And that’s a lot more than an active military service member needs to be dealing 

with. With increasing frequency, scam artists are setting their sights on military 

personnel. As USA Today reported, Marine Corporal Jacob Dissmore, 22, returned 

from Iraq in 2006 to learn that someone in San Diego had opened a credit card account, started a T–Shirt business and even purchased a house with Dissmore’s 

money using his personal information.31

A retired Navy chief petty officer that keeps meticulous financial records suspects 

the theft of laptops from the Veterans Affairs office is directly responsible for suspicious activity on his accounts.32 Earl Laurie Jr. takes care of his private info very 

well; he uses a P.O. Box, shreds his papers, and avoids online banking. Mr. Laurie 

never had a problem until right after the laptop was stolen when he started getting 

phone calls asking him to confirm strange credit card applications on his account. 

And the American Red Cross has even had to issue warnings to military families. 

Identity thieves have stooped to the lowest level. The families of active military officers have reportedly been receiving phone calls from scammers pretending to be 

with the Red Cross delivering unfortunate news about a soldier stationed in Iraq.33

The scammers tell the families that their loved one is being airlifted to a hospital 

in Germany and will not receive medical treatment unless they offer up personal 

information immediately. One moment you’ll think the Red Cross is helping you out, 

the next thing you know you’re a victim. 

It doesn’t stop there. Residents in every state of every member of this Subcommittee have experienced massive data breaches in the past year.34

• In Michigan, Congressman Levin, the details of a scientific study were lost 

on a small flash drive at the Michigan Department of Community Health in 

Detroit. The small flash drive contained the personal information and SSNs 

of 4,000 Michigan residents.35

• The Medicare drug benefit applications of 268 residents from Minnesota and 

North Dakota were recently stolen from an insurance agent’s unlocked car. 

The applications contained applicants’ name, address, date of birth, SSN, and 

bank routing information.36

• The Pennsylvania Department of Transportation’s driver’s license facility in 

Dunmore had computer equipment containing the Social Security of over 


ccoleman on DSK8P6SHH1PROD with HEARING
165 

37 Id. 38 Id. 39Privacy Rights Clearinghouse, A Chronology of Breaches, supra note 35. 40 Id. 41 Id. 42 Id. 43 Id. 44 ID Theft Task Force Report at 23, supra note 8. 45 Id. at 24. 46 Id. 47 Id. 48 Id. 

11,000 drivers. Also stolen were supplies used to create driver’s licenses and 

photo IDs.37

• In February of last year, Congressman Davis, a computer was stolen at the 

University of Alabama-Birmingham, containing nearly 10,000 Social Security 

numbers and the personal information of potential kidney donors and recipients.38

• In California, it is difficult to figure out which data breach to highlight—— 

there were just too many to pick just one. Last year, hackers gained access 

to a UCLA database containing the Social Security numbers and personal information for over 800,000 current and former students, applicants, parents, 

and staff members.39

• And Texas. Everything is bigger in Texas, even the data breaches. Texas 

Guaranteed Student Loan Corp. announced last year that a total of 1.7 million people’s information had been compromised.40

• Congresswoman Tubbs Jones, Ohio was in the news just last week when an 

intern’s car was broken into, and somebody made off with the Social Security 

numbers of approximately 75,000 state employees.41

• State employees in Kentucky received mail last year from Kentucky Personnel Cabinet. The mail had their Social Security numbers visible from the 

see-through plastic windows in the envelope.42

• And, Congressman Ryan, documents containing the personal information of 

Wisconsin’s state assembly members were recently stolen from a legislative 

employee’s car while she exercised at a local gym.43

Social Security numbers are being stolen in every state in this country. 

VI. Solutions to the use of SSNs in Identity Theft 

Although the Presidential Task Force on Identity Theft correctly identified many 

of the problems associated with SSN usage and identify theft, it failed to propose 

many of the obvious solutions. The Task Force noted that, as long as SSNs continue 

to be used as forms of authentication, thieves must be prevented from obtaining 

them, but it did not come up with any substantive improvement that could bring 

about that end.44

The Task Force did note that unnecessary usage of SSNs in the public sector must 

be decreased 45 and suggested that the ‘‘[Office of Personnel Management] should 

take steps to eliminate, restrict, or conceal the use of SSNs (including assigning employee identification numbers where practicable), in calendar year 2007.’’ 46 Furthermore the Task Force suggested that ‘‘[i]f necessary to implement this recommendation, Executive Order 9397, effective November 23, 1943, which requires federal 

agencies to use SSNs in ‘any system of permanent account numbers pertaining to 

individuals,’ should be partially rescinded.’’ 47 Unfortunately, however, the Task 

Force did not propose that the SSN stop being used for purposes beyond its original 

intent. Instead, the Task Force conceded that ‘‘[t]he use by federal agencies of SSNs 

for the purposes of employment and taxation, employment verification, and sharing 

of data for law enforcement purposes, however, is expressly authorized by statute 

and should continue to be permitted.’’ 48


ccoleman on DSK8P6SHH1PROD with HEARING
166 

49 ID Theft Task Force Report at 26, supra note 8. 50 Id. 51 Id. 52See also Nat’l Research Council, Who Goes There? Authentication Through the Lens of Privacy (Stephen Kent & Lynette Millett eds. 2003); Nat’l Research Council, Engaging Privacy and 

Information Technology in a Digital Age (James Waldo, Herbert S. Lin & Lynette Millett eds. 

2007). 53 Ariz. Rev. Stat. § 44–1373. 54 Available at http://www.state.co.us/govldir/legldir/olls/sl2004a/sll393.htm. 

Although the Task Force recommended that the Office of Personnel Management 

take a leading role in issuing policy guidance on appropriate use of SSNs 49 and create a list of acceptable SSN practices in order to determine best practices,50 the 

Task Force did not lay out any basic framework for this policy guidance or any suggested best practices. Furthermore, although the Task Force suggested that a comprehensive record on the private sector use of SSNs should be developed,51 it failed 

to detail how the information comprising this record ought to be recorded or what 

legislative changes would be necessary to reduce the crime of identity theft. The absence of a legislative recommendation on this key point is significant; in many other 

areas of the report, the Department of Justice recommend legislative changes to expand its own investigative and prosecutorial authority. 

The task force recognizes the dangers of Social Security numbers’ dual role in 

identification and authentication, but it fails to recommend that the Social Security 

number’s role in authenticating an identity be completely eliminated and its use in 

the private sector limited. Although the Task Force adequately highlights some of 

the problems associated with SSN usage, it fails to provide a meaningful starting 

point for the government to act to correct the problems and it does not recommend, 

as it ought to, that the private sector immediately cease use of SSN for authentication purposes. 

What else should be done? 

• For starters, an effective law would limit the collection and the use of the 

SSN. It would be far preferable to reduce the crime of identity theft at its 

source than to create new enforcement authority for a problem that is clearly 

out of control. • The use of the SSN should be limited to those circumstances that are explicitly authorized by law. For example, an employer should be permitted to ask 

an employee for an SSN for tax-reporting purposes (as long as the SSN remains the Taxpayer Identification Number), but a health club should not be 

permitted to ask a customer for an SSN as a condition of membership. 

• Prevent companies from compelling consumers to disclose their SSN as a condition of service or sale unless there is a statutory basis for the request. • Prohibit the sale and limit the display of the SSN by government agencies. It 

is simply inconsistent with Section 7 of the Privacy Act to allow the Federal 

Government to disseminate the SSN. • Penalize the fraudulent use of another person’s SSN but not the use of an SSN 

that is not associated with an actual individual. This would permit, for example, 

a person to provide a number such as the ‘‘867–00–0909’’ where there is no intent to commit fraud. (The number displayed could not be an actual SSN.) 

• Encourage the continued development of alternative, less intrusive means of 

identification. We believe that the National Research Council should be funded 

to undertake further research on new techniques that enable records management while minimizing privacy risks.52

It is also important not to preempt innovative state laws that reduce the risk of 

SSN misuse. Many states have enacted legislative protections for the SSN. They 

vary from comprehensive frameworks of protection for the SSN to highly-specific 

laws that shield the SSN from disclosure in specific contexts. 

For example, a 2005 Arizona law prohibits the disclosure of the SSN to the general public, the printing of the identifier on government and private-sector identification cards, and establishes technical protection requirements for online transmission of SSNs.53 The law also prohibits printing the SSN on materials mailed to 

residents of Arizona. Exceptions to protections are limited—companies that wish to 

continue to use the SSN must do so continuously, must disclose the use of the SSN 

annually to consumers, and must afford consumers a right to opt-out of continued 

employment of the SSN. 

In 2004 Ohio law limits the collection of the SSN and its incorporation in licenses, 

permits, passes, or certificates issued by the state.54 The law requires the establishment of policies for safe destruction of documents containing the SSN. Insurance 


ccoleman on DSK8P6SHH1PROD with HEARING
167 

55 Available at http://www.epic.org/privacy/ssn/sb475.html. 56Press Release, Office of the Governor, Governor Blagojevich calls on Veterans Administration to provide immediate protection to veterans whose personal information was stolen (May 

24, 06), available at 

http://www.illinois.gov/PressReleases/ShowPressRelease.cfm?RecNum=4920&SubjectID=26. 

57Thomas Frank, 6 States defy law requiring ID cards, USA Today, June 18, 2007, available at http://www.usatoday.com/news/nation/2007-06-18-id-cardslN.htm? loc=interstitialskip. 58 Id.. 59Dep’t of Homeland Sec., Notice of Proposed Rulemaking: Minimum Standards for Driver’s 

Licenses and Identification Cards Acceptable by Federal Agencies for Official Purposes, 72 Fed. 

Reg. 10,819, 10,845 (Mar. 9, 2007), available at http://a257.g.akamaitech.net/7/257/2422/ 

01jan20071800/edocket.access.gpo.gov/2007/07-1009.htm; see generally, EPIC, Page on National 

ID Cards and the REAL ID Act, http://www.epic.org/privacy/idlcards/. 60Thomas Frank, 6 States defy law requiring ID cards, supra note 57. 61 EPIC maintains an archive of information about Microsoft Passport at http://www.epic.org/ 

privacy/consumer/microsoft/passport.html. 

companies operating in the state must remove the SSN from consumers’ identification cards. Finally, the legislation creates penalties for individuals who use others’ 

personal information to injure or defraud another person. 

In Georgia, businesses are now required to safely dispose of records that contain 

personal identifiers.55 The Georgia law requires that business records—including 

data stored on computer hard drives—must be shredded or in the case of electronic 

records, completely wiped clean where they contain SSNs, driver’s license numbers, 

dates of birth, medical information, account balances, or credit limit information. 

The Georgia law carries penalties up to $10,000. 

In the past year, Illinois has passed several laws to protect consumer privacy, including measures that address identity theft, limit the use of the Social Security 

number, require notification of security breaches, and allow state residents to put 

a security freeze on their credit report if they believe their personal information has 

been compromised.56

Six state legislatures, in the past two months, have passed laws going against a 

new federal ID requirement.57 The law would require 240 million Americans to get 

new licenses by 2013. The new identification cards would contain residents’ SSN, 

home address, and that they are in the USA legally. Implementation of this new 

ID program would cost states more than $11 billion,58 according to the National 

Conference of State Legislatures. The Federal Government has estimated that 

REAL ID will cost $23.1 billion.59 Some state lawmakers have gone as far to call 

this federal effort an attempt to create a ‘‘ ‘papers-please’ society.’’ 60 Without all 50 

states complying, it’s not really a National ID card. In the end states will have their 

way. 

The innovative solutions that state legislatures are developing to address privacy 

concerns should be encouraged. The states are laboratories of democracy, and are 

moving effectively on emerging issues. A federal privacy baseline ensures safeguards 

in those states where they do not currently exist, and leaves states free to develop 

better protection. Even a sensible national law will become outdated as technology 

and business practices evolve. 

EPIC also favors technological innovation that enables the development of context-dependent identifiers. Such a decentralized approach to identification is consistent with our commonsense understanding of identification. If you’re going to do 

banking, you should have a bank account number. If you’re going to the library, you 

should have a library card number. If you’re renting videos from a video rental 

store, you should have a video rental store card number. Utility bills, telephone 

bills, insurance, the list goes on. These context-dependent usernames and passwords 

enable authentication without the risk of a universal identification system. That 

way, if one number gets compromised, all of the numbers are not spoiled and identity thieves cannot access all of your accounts. All of your accounts can become compartmentalized, enhancing their security. 

We believe that this is also the approach favored by businesses and cutting-edge 

technology firms that think carefully about the issue, though it has taken us some 

work to make this clear. EPIC filed a complaint with the Federal Trade Commission 

in 2001 about Microsoft Passport, an identity scheme proposed for the Internet.61

Microsoft was signing up users for a service that produced a single username and 

password for all of their Web services, including credit card information and a vast 

user profile. Microsoft Passport stored user information in a central database. The 

problem was that while Microsoft Passport claimed to enhance security, it actually 

had a lot of holes. And, if you accidentally left your user profile up on a public computer terminal or a malicious hacker gained access to one of your accounts, they 

would have access to everything associated with your user profile. 


ccoleman on DSK8P6SHH1PROD with HEARING
168 

62Fed. Trade Comm’n, Agreement, In Re Microsoft, FTC Docket No. C–4069 (Dec. 20, 2002). 63Kim Cameron, The Laws of Identity, Identity Weblog, Dec. 9, 2004, http:// 

www.identityblog.com/stories/2004/12/09/thelaws.html; Windows CardSPace, http:// 

cardspace.netfx3.com/; OpenCard, http://www.opencard.org/. 

We urged the Federal Trade Commission to investigate, and the FTC eventually 

agreed with EPIC’s position.62 Microsoft backed off Passport, developed an approach 

to identity management that allowed for multiple forms of online identification, and 

other companies, including open source developers, followed a similar approach.63

I believe there is now consensus in the online community about the need to avoid 

single identifiers and to promote multiple identification schemes, and that this approach is best not only for privacy but also for security. The critical question is 

whether Congress can make physical identity systems similarly robust. 

VII. The Social Security Number Protection Act, H.R. 948 

H.R. 948, the Social Security number Protection Act of 2007, has passed before 

the Committee on Energy and Commerce and has been reported to the House. The 

purpose of H.R. 948 is to prohibit the display and purchase of Social Security numbers in interstate commerce pursuant to rules to be promulgated subsequent to the 

passage of the bill. Although we generally favor the bill, we believe it can be 

strengthened in several key areas. Most critically, there should be clear guidance 

to the FTC to limit the sale and purchase of Social Security numbers, there should 

be private right of action for individual citizens to ensure that the law is effective, 

and there should be no preemption of state law. 

Sections 3(a)(1) through (3)(a)(3) of H.R. 948 create a facially broad prohibition 

on the public display of Social Security numbers on the Internet, the requirement 

to use an individual’s Social Security number as a password for access to any goods 

or services, and the display of Social Security cards on any membership or identity 

card. However, Section 3(c) grants the Federal Trade Commission open-ended authority to promulgate exceptions to the prohibitions contained within the bill. If exceptions concerning the display of Social Security numbers and requirement of their 

use as passwords are necessary, then they should be contained within the statute 

itself. Failing that, the authorization granted to the FTC should be narrowly tailored to areas in which exceptions are clearly needed. As currently formed, there 

is no way to know whether the exceptions will undermine the safeguards that are 

vitally important. 

Although the purpose of the bill is, in part, to prohibit the sale and purchase of 

Social Security numbers, Section 4(a) only authorizes the FTC to create regulations 

to this end. Section 4(b)(1) requires the FTC to issue regulations but it provides little meaningful guidance on baselines standards the FTC should adopt. Furthermore, 

although Section 4(b)(2) appears to offer the Commission some substantive guidance, its language actually defines the ceiling for the FTC’s rules rather than the 

floor. While the dual purposes of providing assurance that Social Security numbers 

are not to be used to commit fraud and to prevent undue harm are laudable, these 

should be the minimum requirements the FTC must meet under the act and should 

not define the boundary of the Commission’s authority to regulate. Also troubling 

are the laundry list of required exceptions contained within Section 4(b)(3). Not only 

are the exceptions contained in Sections 4(b)(3)(A) through 4(b)(3)(F) requirements 

of any future FTC regulation, but also Section 4(b)(3)(G) gives the FTC open ended 

authority to create further exceptions pursuant to the general considerations in Section 4(b)(2). Despite its strongly worded purpose, the bill lacks adequate limitation 

on the sale or purchase of Social Security numbers and, instead, devotes more space 

to explicitly authorizing uses of Social Security numbers that were not originally intended. 

Although it is laudable that the bill creates a right of action for states’ attorneys 

general in Section 4(e)(2)(A), H.R. 948 fails to authorize a private right of action. 

Experience has shown that a private right of action is necessary in order to ensure 

vigorous enforcement of the law. While State and Federal Governments are often 

consumed with pursuing other issues and may be unable to pursue every indiscretion to the fullest extent of the law, individuals are always motivated to vindicate 

their own rights. The possibility of expansive litigation indicates the importance of 

this problem; it does not provide a reason to restrict an individual’s ability to protect 

his identity. 

I should add further that EPIC has had significant success bringing privacy complaints to the Federal Trade Commission. In fact, it was our complaint regarding 

the practices of the data broker ChoicePoint that led to the largest fine in the ComVerDate Mar 15 2010 05:09 May 13, 2011 Jkt 063017 PO 00000 Frm 00172 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\63017.XXX GPO1 PsN: 63017

ccoleman on DSK8P6SHH1PROD with HEARING
169 

64 EPIC, Past FTC Review of ChoicePoint Privacy Practices, http://epic.org/privacy/ftc/google/ 

#cpoint; see generally EPIC, ChoicePoint, http://www.epic.org/privacy/choicepoint/. 

mission’s history.64 Nonetheless, we would urge the Committee to include a private 

right of action, specifically where an individual or company misuses an SSN in violation of the Act. That will be critical to limit the problem of identity theft. 

Finally, while a national standard may appear attractive, preempting state law 

will be a mistake. The preemption of state law will mean simply that certain practices that contribute to the crime of identity theft that are currently and appropriately outlawed by the states will become legal if this bill passes in its current 

form. Experience in other areas has made clear that a federal baseline for privacy 

protection is the best way to both create a national standard and to preserve innovation in the states. 

VIII. Conclusion 

There is little dispute that identity theft is one of the greatest problems facing 

consumers in the United States today. There are many factors that have contributed 

to this crime, but there is no doubt that the misuse of the Social Security and the 

failure to establish privacy safeguards are key parts of the problem. The Congress 

should pass strong and effective legislation that will limit the use of the SSN, that 

will provide effective means of oversight, that will not limit the ability of the states 

to develop better safeguards, and that will encourage the development of more robust systems for identification that safeguard privacy and security. 

Thank you for your interest in this issue. I will be pleased to answer your questions. 

f 

Chairman MCNULTY. Thank you very much, Mr. Rotenberg. 

Mr. Schwartz. 

STATEMENT OF GILBERT T. SCHWARTZ, PARTNER, SCHWARTZ 

& BALLEN, LLP, ON BEHALF OF THE FINANCIAL SERVICES 

COORDINATING COUNCIL 

Mr. SCHWARTZ. Mr. Chairman, Ranking Member Johnson, and 

Members of the Subcommittee, I am Gilbert Schwartz, and I am 

pleased to appear today before the Subcommittee to present the 

view of the Financial Services Coordinating Council on the important issue of protecting the privacy of the Social Security number 

from identity theft. 

FSCC is composed of the American Bankers’ Association, American Council of Life Insurers, American Insurance Association, and 

the Securities Industry and Financial Markets Association. These 

organizations represent thousands of small and large banks, insurance companies and securities firms that provide financial services 

to virtually every household in the United States. As was mentioned by several witnesses today, Social Security numbers play an 

important and integral role in the daily operations of financial institutions. 

They are used to make sound credit decisions, for underwriting 

insurance, for reporting to Federal and state authorities and they 

are a central element in customer identification programs required 

by the U.S.A. Patriot Act. Most importantly, Social Security numbers are used by financial institutions to prevent and detect fraud, 

root out identity theft, and to identify and report transactions that 

may involve money laundering, as well as activities involving terrorist financing. 

The FSCC strongly supports efforts by the government and the 

private sector to protect Social Security numbers from being used 


ccoleman on DSK8P6SHH1PROD with HEARING
170 

to commit identity theft. However, in view of the important and essential role that they play in our financial system, legislation 

should avoid overly broad and unduly restrictive limitations on 

their use that could have unintended consequences. Banks, insurance companies and securities firms have robust systems to protect 

the security of financial transactions conducted by their customers 

and their personal information. Financial institutions have a long 

history of using Social Security numbers responsibly. It is important to underscore the fact that financial institutions do not sell or 

publicly display Social Security numbers to the general public. 

Congress addressed the issue of consumer privacy and security 

safeguards for financial institutions in the Gramm-Leach-Bliley 

Act. That Act provides comprehensive and rigorous protections for 

consumers non-public personal information, which includes Social 

Security numbers. However, the GLB Act and implementing regulations specifically permit financial institutions to use Social Security numbers for specified legitimate business functions. 

Federal regulators have also adopted guidance for depository institutions in the event of unauthorized access to consumer information. The guidance includes notification of customers if the institution determines that misuse of sensitive information has occurred 

or is reasonably possible so that they can take steps to protect 

themselves against possible identity theft. 

In 2003, Congress also enacted the FACT Act to help consumers 

remedy the effects of identity theft. The FSCC believes that the 

continuing efforts of the agencies to implement the FACT Act has 

had a positive effect on reducing incidents of identity theft and will 

continue to do so as more and more regulations are implemented 

by the agencies. 

In addition, many states have enacted legislation to protect sensitive customer information, such as Social Security numbers. This 

legislation provides strong protections for the use of personal information by financial institutions. We are concerned, however, that 

any Federal legislation could have unintended consequences if it 

restricts the ability of financial institutions to use Social Security 

numbers. It could disrupt the flow of credit and other financial 

services to consumers and hurt our ability to detect fraud and prevent identity theft. A prohibition on the sale and purchase of Social 

Security numbers could also affect securitization activities of financial institutions, as well as merger and acquisition activities because these numbers are embedded in the files that are required 

in connection with those securitization and mergers and activities. 

Many institutions also use public records in connection with antifraud activities, as well as to identify and detect identity theft. 

Limits on access to public record information could jeopardize financial institutions’ ability to protect customers’ assets and prevent 

illegal activities. Many institutions are deeply involved in providing 

information to the public about how to prevent from becoming a 

victim of identity theft and how to assist victims of identity theft. 

We strongly support these efforts by financial institutions as well 

as by the government. 

We also support, as I said, efforts by Congress to protect Social 

Security numbers in order to prevent identity theft. However, in 

view of the strong protections financial institutions have in place 


ccoleman on DSK8P6SHH1PROD with HEARING
171 

to protect this information and existing Federal and state laws applicable to the use and disclosure of customer information, the 

FSCC believes that there is no need for further restrictions on the 

ability of financial institutions to use and disclose Social Security 

numbers. 

Mr. Chairman, we appreciate the opportunity to appear before 

the Subcommittee today, and we will be glad to respond to any 

questions you may have. 

[The prepared statement of Mr. Schwartz follows:] 

Prepared Statement of Gilbert T. Schwartz, Partner, Schwartz & 

Ballen LLP, on behalf of the Financial Services Coordinating Council 

Introduction 

The Financial Services Coordinating Council (‘‘FSCC’’) is pleased to present this 

statement to the Subcommittee on Social Security in connection with its hearing on 

‘‘Protecting the Privacy of the Social Security number from Identity Theft.’’ The 

FSCC is comprised of American Bankers Association, American Council of Life Insurers, American Insurance Association, and Securities Industry and Financial Markets Association. The FSCC represents thousands of large and small banks, insurance companies and securities firms in the United States. Together, these financial 

institutions provide financial services to virtually every household in the United 

States. 

How Financial Institutions Use Social Security Numbers 

Social Security numbers are unique personal identifiers. While originally created 

as a means of tracking earnings and determining eligibility for Social Security benefits, they have evolved well beyond their original purpose. SSNs are the most effective means of identifying individuals and matching people with personal data. They 

are the identifier of choice for both the public and private sector, and are used widely throughout the economy and the financial system. They are a window into the 

financial and personal history of virtually every consumer. When combined with certain other personal information, SSNs can be used to create false identities and financial mischief. That is why SSNs are often sought by identity thieves. 

The FSCC strongly supports proactive efforts by the government and the private 

sector to protect SSNs from the national problem of identity theft. However, it is 

also vitally important to our nation’s financial system to avoid overly broad and unduly restrictive limitations on the use of SSNs that could have significant unintended consequences. 

SSNs play an integral role in the operations of every financial institution in our 

country. Financial institutions use SSNs in conjunction with other personal information to make sound credit decisions, for underwriting and other insurance functions, 

and for screening in connection with customer identification programs. Our nation’s 

credit reporting system relies on SSNs to gather information to compile consumer 

credit files. This information is used by financial institutions to make credit available to customers and to provide other services to consumers. Most importantly, 

SSNs are used to prevent and detect fraud, root out identity theft and to identify 

and report transactions that may involve money laundering and activities involving 

terrorist financing. They are also used by financial institutions to comply with reporting requirements of federal and state tax and securities laws; to transfer assets 

and accounts to third parties; to comply with ‘‘deadbeat spouse’’ laws; to verify appropriate Department of Motor Vehicle records when underwriting auto insurance; 

to obtain medical information used in underwriting life, disability income, and longterm care insurance polices; to locate missing beneficiaries to pay insurance proceeds; to locate insurance policies for owners that have lost their policy numbers; 

and to facilitate myriad administrative functions. 

As you can see, SSNs play a critically important role in the daily functions of virtually every financial institution. The use of SSNs increases efficiency, reduces costs 

and makes it possible to offer innovative products and services that would not otherwise be available to consumers economically. Not only are SSNs critical to the 

smooth functioning of the financial system, they also serve as a means of detecting 

and preventing fraudulent transactions as well as combating identity theft. Any 

SSN legislation that may be considered must recognize the essential role that SSNs 

play in facilitating the delivery of financial products and services to consumers 


ccoleman on DSK8P6SHH1PROD with HEARING
172 

throughout the nation. Restrictions on the ability of financial institutions to use 

SSNs for everyday business purposes could have significant unintended consequences on their ability to serve consumers. Moreover, limitations on the use of 

SSNs by financial institutions may have the unintended effect of increasing fraud 

and identity theft and impede law enforcement programs designed to thwart money 

laundering and terrorist financing. 

How Financial Institutions Protect SSNs and Combat Identity Theft 

Financial institutions take the problem of identity theft very seriously. We have 

long recognized the importance of protecting our customers’ personal information, 

including SSNs. Public confidence in financial institutions is based in large part on 

the recognition that banks, insurance companies and securities firms are trusted 

intermediaries that have established robust policies, procedures and systems to protect the security of their customers’ transactions, financial assets and personal information. Financial institutions have a long history of using SSNs responsibly and in 

a manner that protects them from abuse. It is important to underscore that financial institutions do not sell or display SSNs to the general public. 

Congress formally addressed the issue of consumer privacy and financial institution security safeguards in 1999 when it enacted the Gramm-Leach-Bliley Act. The 

GLB Act was landmark legislation that expanded the ability of banks, insurers and 

securities firms to affiliate in order to provide more customers a full range of financial services more efficiently. The GLB Act requires all financial institutions 

throughout the nation to provide comprehensive, and rigorous protection of consumers’ nonpublic personal information, including SSNs. The GLB Act establishes 

overarching Congressional policy that every financial institution has an affirmative 

and continuing obligation to respect the privacy of its customers and to protect the 

security and confidentiality of its customers’ nonpublic personal information. Moreover, under the GLB Act, each customer has the ability to instruct his or her financial institution not to disclose the customer’s personal information, including an 

SSN, to nonaffiliated third parties or to the general public. 

In recognition of the fact that financial institutions have legitimate reasons to request, use and disclose personal information such as SSNs, the GLB Act and regulations of the federal agencies and state authorities charged with implementing the 

Act permit financial institutions to use such information for legitimate business 

functions, such as to effect, administer or provide a transaction requested or authorized by the consumer or in connection with servicing a customer’s account. These 

laws also permit financial institutions to disclose such information in order to prevent fraud or unauthorized transactions, as well as to comply with federal, state or 

local laws. 

Under the authority of the GLB Act, federal agencies require financial institutions 

to develop a written information security program that describes how they protect 

customer information. An institution must: 

• Designate one or more employees to coordinate its information security program; 

• Identify and assess the risks to customer information in each relevant area of the company’s operation and evaluate the effectiveness 

of safeguards for controlling these risks; 

• Design and implement a safeguards program, and monitor and test it 

on a regular basis; 

• Select service providers that can maintain appropriate safeguards; 

and 

• Evaluate and adjust the program in light of relevant circumstances 

and changes in the company’s business. 

Financial institutions have established information systems that maintain and 

store sensitive consumer information in a safe and secure manner. These facilities 

are subject to periodic audit by internal and external auditors as well as by state 

and federal examiners. Federal regulators also have adopted guidance relating to 

procedures depository institutions are to follow in the event of unauthorized access 

to customer information. The guidance includes notification of customers if the institution determines that misuse of sensitive customer information has occurred or is 

reasonably possible. Notice to customers under these circumstances enables them to 

take steps to protect themselves against possible identity theft. 

Congress also enacted the Fair and Accurate Credit Transactions (‘‘FACT’’) Act of 

2003 which contains provisions intended to help consumers remedy the effects of 

identity theft. Many of the FACT Act’s provisions have been implemented by regulations and guidance issued by the federal agencies. The FSCC strongly believes that 


ccoleman on DSK8P6SHH1PROD with HEARING
173 

continuing efforts of the agencies to implement the FACT Act have had a positive 

effect on reducing incidents of identity theft. 

In addition to the numerous state insurance laws implementing the GLB Act requirements, thirty six states and the District of Columbia have enacted security 

breach legislation. States have also enacted legislation that prohibits specific uses 

of SSNs, including the public display of SSNs. The FSCC believes that existing federal and state laws and guidance provide strong protections for the use of personal 

information such as SSNs by financial institutions. Accordingly, the FSCC believes 

that there is no need for Congress to enact legislation restricting the use and disclosure of SSNs by financial institutions. 

Restrictions May Have Unintended Consequences 

The FSCC is concerned about unintended consequences of legislation that restricts the ability of financial institutions to use SSNs. Unintended consequences 

have the potential to disrupt the flow of financial services to consumers and to harm 

the smooth operation of the U.S. financial system. Such effects could have serious 

consequences for the nation’s economy. 

Legislation could adversely affect the ability of financial institutions to use SSNs 

to verify the identities of consumers and customers. This could disrupt the flow of 

information creditors receive from credit bureaus and have adverse consequences for 

consumers seeking credit, insurance, securities and other financial services. It is essential that financial institutions obtain SSNs from consumers and disclose the 

SSNs to credit bureaus in order access their credit histories. If such access and use 

of SSNs is disrupted, the flow of credit, and other financial services will be undoubtedly be curtailed. 

Prohibitions or restrictions on the sale or use of SSNs could seriously impede the 

ability of financial institutions to provide seamless administrative services to customers. For example, insurers use SSNs to verify the identity of an individual who 

requests a change to his or her insurance policy, such as a change in beneficiary. 

If an insurer is unable to verify the identity of the person making the request, the 

potential for fraudulent transactions and identity theft will increase. 

Restrictions on the use and disclosure of SSNs could adversely affect the ability 

of financial institutions to detect fraud. Banks, insurance companies and securities 

firms rely on information they obtain from various sources to verify a consumer’s 

identity. Financial institutions maintain sophisticated procedures, which are based 

upon SSNs as a means of identification, to accurately verify the identity of customers and to prevent and detect fraud or identity theft. 

A prohibition on the sale or purchase of SSNs could be interpreted as restricting 

activities such as the sale of assets among financial institutions. Financial institutions often sell assets such as credit card and vehicle loans in connection with their 

securitization activities. Merger and acquisition activities may also result in a transfer or sale of all of the institutions’ accounts and policies. SSNs are necessarily included in account and policy files that are transferred in connection with these routine business transactions. Of necessity, legislation that addresses the sale and purchase of SSNs must exclude these and other similar legitimate transactions from 

the scope of its coverage. 

Restrictions on the ability to obtain SSNs could have an adverse effect on the ability of financial institutions to comply with anti-money laundering rules and antiterrorism activities. Section 326 of the USA PATRIOT Act requires many financial 

institutions to obtain a taxpayer identification number, typically an SSN, before 

opening an account for an individual. The financial institution also must verify the 

identity of the individual. These measures are intended to prevent the ability of 

money launderers and terrorists to use financial institutions for illicit purposes. 

Limitations on the ability of financial institutions to use SSNs to verify the identity 

of customers could thwart their ability to prevent money laundering and financing 

of terrorist activities. 

Access to Public Records 

We understand that legislation may also address the use of SSNs that are available in public records. Many financial institutions use public records in connection 

with their anti-fraud activities as well as to prevent and detect identity theft. Public 

records facilitate the ability of financial institutions to verify consumer identities 

when opening accounts, issuing insurance policies and conducting various transactions. They also assist in verifying an employee’s background. The ability to match 

SSNs ensures that the information included in these records matches the correct inVerDate Mar 15 2010 05:09 May 13, 2011 Jkt 063017 PO 00000 Frm 00177 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\63017.XXX GPO1 PsN: 63017

ccoleman on DSK8P6SHH1PROD with HEARING
174 

dividual. Limits on access to public record information could jeopardize a financial 

institution’s ability to protect its customer’s assets and prevent illegal activities. 

Customer Education 

Financial institutions strongly support efforts to combat identity theft. Many institutions post extensive information on their websites, and distribute statement 

stuffers and brochures to inform consumers about steps they can take to prevent 

from becoming victims of identity theft. Financial institutions also maintain identity 

theft hotlines and participate in community outreach programs to spread the word 

about measures consumers can take to prevent identity theft. And financial institutions strongly support efforts by the federal agencies to educate consumers through 

various booklets, brochures and programs about preventing identity theft. 

Conclusion 

The FSCC strongly supports efforts by Congress to protect SSNs to prevent the 

national problem of identity theft. Under existing law, financial institutions have 

developed robust safeguards to protect the security of personal customer information 

such as SSNs. Financial institutions use SSNs in connection with normal business 

functions or to comply with critically important requirements established by Congress. In view of the strong protections currently in place, the FSCC believes that 

there is no need for further restrictions on the ability of financial institutions to use 

SSNs. 

f 

Chairman MCNULTY. Thank you, Mr. Schwartz. I want to 

thank all of the Members of the panel for their patience and for 

their excellent testimony. Some of us are a little bit under the gun 

as far as other commitments are concerned but before I yield to my 

colleagues to inquire, I just want to say that what I have heard 

from this panel and what I have heard from previous panels just 

strengthens my belief that obviously there are legitimate uses for 

the Social Security number, there are a lot of illegitimate uses. I 

just happen to think that the vast majority of entities that ask individuals for their Social Security numbers have absolutely no need 

to have that information. 

I think part of the solution is education and doing what Nancy 

and I did when I related our own personal story about when we 

went to make a retail purchase, and we were giving them all kinds 

of information about us, then they asked for the Social Security 

number. They had absolutely no need to have it. I think more people need to do what we do, which was ‘‘Just Say No.’’ However, I 

think we need to go beyond that and to have some legislation that 

further defines what are the legitimate reasons for seeking to know 

someone’s Social Security number so that more people do not suffer 

the fate of Charlie W. and the others who have had these horrible 

experiences, which have disrupted their lives for years. With that, 

I will yield to the Ranking Member, Mr. Johnson. 

Mr. JOHNSON. What was your question? 

Chairman MCNULTY. I think what I gave was my conclusion. 

[Laughter.] 

Mr. JOHNSON. I sense there is quite a difference between our 

people who testified out there and how you believe number use 

should be accomplished. It is interesting to me, we tried to get the 

military to stop using as a serial number the Social Security number, and they will not do it because it costs too much to change it 

all. So, having said that, in the financial industry, if we use private 

sources to verify a person’s identification instead of going through 


ccoleman on DSK8P6SHH1PROD with HEARING
175 

the government let’s say, what would it cost to do that? You would 

use the Social Security number, I assume? 

Mr. PRATT. Our Members make extensive use of the Social Security number for—I want to distinguish between, it was in the 

testimony, but between using the Social Security number to build 

a database to match information together, and I think the professor 

did a good job of explaining the difference between matching and 

building a database and authenticating, verifying the identity of 

the consumer. The SSN is used in part to build the database and 

you need consistency. Even a driver’s license, for example, Mr. 

Chairman, if you move around the country, your number will 

change of course and not everybody moves, but we have at least 40 

million consumers who are changing their addresses every year, so 

the SSN remains a good database matching tool, not perfect, and 

we use other matching elements of course to build the totality of 

the database. It is not unique to the Social. 

On the authentication side, I think one thing that is very important that has been said several times, if every one of the transactions shared here had involved proper authentication, there 

would not have been records of arrest and there would not have 

been public records and there would not have been a driver’s license issued in that individual’s name. Maybe at the core of this 

hearing, I think it runs parallel with the discussion of the Social 

Security number, is that you must authenticate properly and it 

does involve using many different types of tests. What you do online to authenticate an identity is different than what you would 

do if I was in person speaking with you as a loan officer and that 

would be yet again different if I was on the phone. 

Mr. JOHNSON. Well, focus for a minute on us having to have 

employer verification of legal residence, for example, can you do 

that? 

Mr. PRATT. Again, identity verification is a risk assessment. 

Mr. JOHNSON. That is what I mean. 

Mr. PRATT. I do not think there is any way in this country to 

perfectly identify a consumer unless we are going to carry around 

identifying document, which will create a whole host of other problems, by the way, if we are carrying everything with us. 

Mr. JOHNSON. We have got too many in our pocket now. 

Mr. PRATT. Yes, sir. I was asked just today to provide a copy 

of my Social Security card in a lending transaction. 

Mr. JOHNSON. You carry that around all the time, don’t you? 

Mr. PRATT. I do not have it and could not find it. 

Mr. JOHNSON. Of course not. 

Mr. PRATT. In fact, I recall it is a kind of fuzzy blue card that 

I received. By the way, my Social Security number matches up 

with my sister’s almost perfectly because at my age the family obtained all of them sequentially at the same time and so there are 

two S. Pratts, and when we graduated from college, we lived in the 

same address, and so there were two S. Pratts at the same address 

with one digit difference in our Social Security numbers. So I think 

that explains why identity verification will never be solely the Social. 

But, on the other hand, I think what Mr. Schwartz said is right, 

it is part of the tool box. For example, if we can identify in a fraud 


ccoleman on DSK8P6SHH1PROD with HEARING
176 

database that a SSN has been used in other fraudulent transactions, that is not going to stop the transaction, but the user, the 

authenticator, should take additional steps and say, ‘‘I am sorry, 

we cannot push you through until we get to the point of knowing 

who you are, and we need to try to find a way to know who you 

are and we are going to ask you another question.’’ 

Mr. JOHNSON. So, all you are saying is it is just another ID 

method? 

Mr. PRATT. It is part of the system but it is very important to 

database—— 

Mr. JOHNSON. But wants to get rid of them totally. 

Mr. PRATT. I do not see any way that you can pull the Social 

Security number out of a, for example, a credit reporting database 

because every other data element is going to change. So if you pull 

the one stable identifier out of that database, we are causing another kind of problem that will be dealt with another Committee 

and that is the problem of inaccurate data being used to stop transactions. 

Mr. JOHNSON. We are running out of time, but I would like to 

hear Dr. Anto ́n’s comment on that. 

Ms. ANTO ́ N. Thank you, Congressman. We found a study in The 

Journal of Public Health that showed that we can identify people 

very accurately in the Social Security death master index by simply 

with their first initial, last name, date of birth and/or the birthplace, and that is without the Social Security number. So, it is possible to identify. This is why I was trying to make a point about 

not using the Social Security number as an authenticator as well. 

Our names and addresses and phone numbers have been published 

in the phone book for over 55 years, probably more than that, and 

we were not struggling with identity theft at that time. 

Mr. JOHNSON. Well, the credit companies have to be more accurate than that, and I think it is just another source of identification 

for them. Is that true? 

Mr. PRATT. That is true. By the way, we have also done a death 

master file analysis where you can have more than 90 John 

Smith’s with the last four digits of a Social Security number that 

match, so our challenge is in fact to use the Social in combination 

with an address, again 40 million of them changing every year, in 

combination with marriages and divorces where last names change. 

Candidly, our hit or miss ratio in the financial services space may 

be very different than in a retail space that does not have to deal 

with the Fair Credit Reporting Act or Gramm-Leach-Bliley Act or 

a USA Patriot Act, Section 326 obligation. 

Ms. ANTO ́ N. Not to be argumentative, but you do not need those 

four digits of the Social Security number to be able to accurately 

identify those people in a database. 

Mr. JOHNSON. Thank you. I am out of time. I appreciate your 

comments. 

Chairman MCNULTY. Ms. Tubbs Jones may inquire. 

Ms. TUBBS JONES. Thank you, Mr. Chairman. I want to get a 

‘‘shout out’’ to an organization. In case you all do not know what 

a ‘‘shout out’’ is, that means you are saying something about somebody you know. It is done over the radio more often than not, it 

is a slang term that my son has taught me, he is 24. But I am 


ccoleman on DSK8P6SHH1PROD with HEARING
177 

going to get a ‘‘shout out’’ to Axiom from my congressional district, 

who is a Member of Mr. Pratt’s organization. Thank you, Mr. Pratt, 

for your testimony. 

Let me also say to Mr. Gingerich I am a former common pleas 

judge out of Kyle County, Ohio, and I want to celebrate the great 

work that the Center for State Courts does because it is through 

the work that you do that we have continually improved the level 

of the judiciary in the United States of America. So, that is a 

‘‘shout out’’ for the Center for State Courts. 

I am interested, I would love to be in a courtroom and let two 

or three of you all really debate this in-depth because it is very 

clear that there are differing opinions. Dr. Anto ́n, so when I go to 

Macy’s and I am getting ready to buy something and I do not have 

my credit card with me and they say, ‘‘Okay, put your name in 

there,’’ and then this little machine says, ‘‘Put in your Social Security number,’’ is that authentication? 

Ms. ANTO ́ N. Yes. 

Ms. TUBBS JONES. Okay, all right, just checking to see if I am 

on the same terms. But I should not have to do that? What should 

I have to do if I really want—no, I am kidding, what should be the 

way in which they would know who I am, what else should they 

be using, my birth date, not my mother’s maiden name? 

Ms. ANTO ́ N. On every single one of my credit cards, I have not 

signed one of them, it always says, ‘‘See ID.’’ So, if someone steals 

my card, they have to see the picture on my driver’s license to 

make sure that it is me. 

Ms. TUBBS JONES. I am with you, Dr. Anto ́n, I do not sign my 

credit cards either. 

Ms. ANTO ́ N. That is how I authenticate. 

Ms. TUBBS JONES. Okay, all right. 

Mr. JOHNSON. But you should put on the back, ‘‘Ask for ID.’’ 

Ms. TUBBS JONES. I should write that on it? 

Mr. JOHNSON. Yes, you should. 

Ms. TUBBS JONES. Okay, I will remember that one. I have just 

about thrown them all out the door though. I really do not have 

a lot of questions, I am interested in spending some time reading 

your testimony and having a little more opportunity to address it, 

but I want to say on behalf of all the people that I represent, we 

need your input in trying to walk through this dilemma that we 

are in. We are in a true dilemma because, as Mr. Pratt and Mr. 

Gingerich said, the Social Security number has become such an integral part of whatever it is we are doing, that to yank it immediately would cause havoc. But, on the other hand, we really need 

to be doing something to prohibit its use. 

I thank you, Mr. Chairman, for the time. I know my friend, Mr. 

Ryan, down there really wants to talk, so I yield you my time. 

Mr. RYAN. Yes, sure, thank you. I appreciate it. 

Chairman MCNULTY. Thank you, Ms. Tubbs Jones. Mr. Ryan 

may inquire. 

Mr. RYAN. Well, I will just pick up where you left off then. I like 

making these conversations flow. Boy, this is a good hearing, Mr. 

Chairman, again another good one. Correct me if I am wrong, Dr. 

Anto ́n, I liked your testimony, it was very interesting, it helped 

logically set this up. Using the cart in front of the horse or the 


ccoleman on DSK8P6SHH1PROD with HEARING
178 

horse in front of the cart analogy, we have to come up with authenticating system and then an identifier, right, so first authenticate, 

then operate through society by identifying, correct? If you cannot 

authenticate who you are, all the rest is academic. 

Ms. ANTO ́ N. In most transactions it seems that your first identified and then authenticated. 

Mr. RYAN. Right. 

Ms. ANTO ́ N. So, you do not use your name to authenticate yourself, and you should not use your Social Security number and you 

should not use your mother’s maiden name. These are all weak authenticators. 

Mr. RYAN. Right. 

Ms. ANTO ́ N. That is the problem. 

Mr. RYAN. So, to prevent all these problems we have in society, 

whether it be terrorism, illegal immigration, identity theft, we have 

to have a better system for authenticating our identity? 

Ms. ANTO ́ N. Yes. 

Mr. RYAN. Okay, so now what we are trying to figure out, what 

should government do to do this? What is it that we can do to facilitate this, to make that happen in the 21st century? Then whatever we do, will it be obsolete in a couple of years, will we throw 

money down a hole with ID cards that are going to be obsolete, 

which we saw on the last panel, what path should we put ourselves 

on so that people can get their IDs—get themselves authenticated 

so that the system can work, what do you recommend? Mr. 

Rotenberg, I know that you have put a lot of work into that too, 

as well? 

Mr. ROTENBERG. Well, thank you, Mr. Ryan, I am going to put 

something on the table, which Professor Anto ́n will understand, but 

it is going to sound a little confusing. It does answer your question, 

however. I think the long-term solution to this problem, and it is 

an enormous problem, is to separate authentication from identification. 

Mr. RYAN. Right. 

Mr. ROTENBERG. Let me give you an example of what I mean. 

A young person walks into a liquor store to purchase alcohol. There 

is one thing that the owner of that store needs to know in most 

states, is this person over the age of 21? To have a legal transaction in that context, there needs to be a way to authenticate the 

fact that person is over the age of 21. It turns out that his actual 

identity is irrelevant and in truth from a privacy perspective and 

a security perspective, it would be best if his identity was not disclosed because that information does not need to be made available. 

Mr. RYAN. Can I have my time now, Mr. Chairman? 

Chairman MCNULTY. Yes. 

Mr. ROTENBERG. As I said, and we have done a lot of work on 

this issue over the years, it comes up a lot, particularly in the 

Internet economy where you have people on Ebay, for example, relying on the reputation of others, whose actual identity is not 

known. But the reputation value of the pseudonym they use is extraordinarily useful. If someone’s reputation is high, they will do 

business with them online. It does not matter who they actually 

are. 


ccoleman on DSK8P6SHH1PROD with HEARING
179 

I think we are going to need to get a handle on this problem. You 

see what has happened is that the Social Security number is actually at the opposite end of the ideal system. The Social Security 

number is both an identifier and authenticator and it fails completely. A good identity system actually separates these functions. 

You would agree with this, would you not? 

Ms. ANTO ́ N. Yes, absolutely. 

Mr. ROTENBERG. Yes. 

Mr. RYAN. Now, we have the two financial services and consumer data people, so we are going to have to figure out here as 

legislators what is the way to go, what is the happy median, where 

is it that you really do not need the Social Security number even 

though it may be convenient and easy to use, where do you really 

not need it? For instance, my bank, just a small community bank 

in Wisconsin, just sent out—I do my online banking and at first 

you needed to use your Social Security number as your password, 

as your ID and then you had your own password. They just sent 

out an email, if you want to get back on, no more, we are getting 

rid of this, you come up with your own ID and password and then 

that will from now on henceforth get you access to your bank accounts. 

So, it seems to me, just using that one little example, that financial services firms and other firms can, if they choose to do so, 

change this data that is required to ID and authenticate who you 

are. So, where is it that, and I know each of you are going to have 

a different answer to this question, where is it that you absolutely 

have to have the Social Security number and where is it that you 

would like to have it but you really do not need it? I would just 

like to ask the four of you who are involved in this your answer 

to that question? 

Mr. PRATT. I believe at the front-end of every transaction, when 

you are in the process of authenticating, and I think to that extent 

we agree, you must have a system of authentication, not the same 

as do you have a Social Security number. Using the Social Security 

number though as part of the complete set of data that is gathered 

at the point of the opening of the transaction is important because 

later you may close that account and open up another account and 

that bank may use a different authenticating system. Later you 

may close that account and open up a different account with a different authenticating system. 

Mr. RYAN. This presumes that you cannot really authenticate 

who you are, right? This presumes that there is no other better authenticating method, right? 

Mr. PRATT. Well, no, actually what it presumes is there is no 

silver bullet to authentication and paralleling authentication strategies will be criminals chasing down the strategy, trying to pull it 

apart and to defeat it. That will always happen, always has, always 

will. So, paralleling authentication will be the need to have a definitive identifier. I have authenticated you through a variety of 

means, which could include using data off your consumer report to 

say tell me about your mortgage, you can get this online, for example, with whom do you have a mortgage, and you can identify that. 

Approximately what is the payment you make per month, and you 


ccoleman on DSK8P6SHH1PROD with HEARING
180 

can authenticate that. By doing that, you actually end up closer to 

authenticating the identity of that consumer. 

But with the Social, no matter which financial institution you are 

doing business with, I will be able to say that account is going to 

go into this record in the Credit Bureau database. The irony of 

what we have heard with some of the testimony is I was in a hearing a floor up and was being criticized, we were being criticized 

where a data match might use just an initial, so one of the challenges is I have other Committees with other opinions in other contexts, such as the Fair Credit Reporting Act, where if we do not 

use full and complete identifying data, I have excerpts from Federal Trade Commission reports on data matching. 

Mr. RYAN. I want to hear these other folks. 

Mr. PRATT. So, I just want you to know that it is—you need 

data to match and build accuracy and you need authentication 

strategies to authenticate. 

Mr. RYAN. Dr. Anto ́n, Mr. Rotenberg, Mr. Schwartz. 

Ms. ANTO ́ N. I would just like to note that if we published everyone’s Social Security numbers in the phone book along with their 

name and telephone number but never used it as an authenticator, 

we could eliminate some identity theft in this country. 

Mr. ROTENBERG. I think that would be a risky strategy. 

[Laughter.] 

Mr. ROTENBERG. Until everybody got on board with that plan 

but food for thought. I do think we need to move away from the 

Social Security number as an identifier. As I described in my testimony, Congress understood this problem. They saw what was happening. What preceded the Privacy Act was a very good detailed report that said the SSN is going to become a universal identifier if 

we do not put some brakes on it, and we are living with the consequences. It is not cost-free for the financial services to be using 

the SSN. It is the number one complaint that consumers have to 

the FTC and the cost is over $50 billion. 

Mr. SCHWARTZ. Mr. Ryan, I would say that it would be very 

difficult for the financial services industry to move away from Social Security numbers. First, obviously, for tax reporting purposes, 

the Social Security number is required. Under the USA Patriot Act, 

one of the requirements of a customer identification program is to 

get a Social Security number to make certain that that person is 

a legitimate person, that a Social Security number has been legitimately issued. 

I agree that the authentication—and that is the reason why your 

bank has moved away from that—the authentication issue is an 

important one and because of the proliferation of Social Security 

numbers and the availability of them, many financial institutions 

are now requiring other types of vehicles for getting access to your 

account. 

Mr. RYAN. So, you might need it to open up the account to begin 

with, but you do not need it to proceed thereafter as an identifier? 

Mr. SCHWARTZ. Well, sometimes, too, for example, if you call 

and you wanted to find out what your balance is in your account 

or to find out if a check has been paid or to transfer funds, there 

are many Mr. Ryan’s in this world who are dealing with banks, 

and you do not remember your account number, for example, I 


ccoleman on DSK8P6SHH1PROD with HEARING
181 

have no idea what my account number is, but that would be one 

element that you would be asked for, your Social Security number, 

and that—— 

Mr. RYAN. But it could be something else other than the Social 

Security number? 

Mr. SCHWARTZ. Well, what are you going to use, the bank 

would not know what your account number is because you do not 

know what your account number is, so that is at least one way of 

getting the first level of information. Then they will ask you, for 

example, what has been a recent transaction or give me your address, your date of birth, there are other identifiers. 

Mr. RYAN. All these other things. 

Mr. SCHWARTZ. You do not know your date of birth? 

Mr. RYAN. No, I said you could use all these other things other 

than the Social Security number. 

Mr. SCHWARTZ. They are, they are. If you call a bank, they will 

not give you—most institutions will not give you access to your account simply by giving your name and your Social Security number, there will be other questions that they will ask you to verify 

that you are who you say you are. 

Mr. RYAN. The challenge for the industry is going to be, it may 

be easy, it may be the path of least resistance to use the SSN, but 

clearly not necessary. Maybe to open up an account, maybe for 

taxes but not necessarily as an identifier or as an authenticator, I 

guess I am using these words correctly. You could move forward 

with other pieces of information that people could navigate to use 

as identifiers and authenticators prospectively once an account is 

opened, could you not? 

Mr. SCHWARTZ. I think it would be very difficult in many industries to do that. For example, if you have many accounts at a 

bank and have many different numbers, one thing that ties them 

all together is your Social Security number so that, for example, if 

you call and say, ‘‘How much do I have in my checking account, 

when is my CD going to be maturing, what is the balance on my 

credit card?’’ If you do not know the numbers on those accounts 

and you cannot give them to the person that you are talking to. 

Your Social Security number is a way in which the central information files of many institutions tie all these accounts together. 

Mr. RYAN. That is just the way the programs are running right 

now. 

Mr. SCHWARTZ. Excuse me? 

Mr. RYAN. It is the way the programs are running right now. 

Mr. SCHWARTZ. But then for each institution, you would have 

separate identification numbers and then we would have the same 

problem we have now, every time you go online, who can remember 

what your passwords are? Most people are now using of course 

their birth dates because it is easier to remember. 

Mr. RYAN. I know I am being liberal with the time, but I can 

see you are shaking ahead a thousand times, Dr. Anto ́n. 

Ms. ANTO ́ N. In my written testimony, I would just like to point 

out that I talk about the dangers of using Social Security numbers 

as primary keys in a database and that that is another problem 

area, and so I just encourage your staff to look at that. 

Mr. RYAN. Thank you. 


ccoleman on DSK8P6SHH1PROD with HEARING
182 

Chairman MCNULTY. Thank you very much, Mr. Ryan. If there 

are no further inquiries, I want to thank our staff for the tremendous work they did in preparing the Members for this hearing. I 

want to thank all of the witnesses, all of the guests who have been 

so patient for the past three hours. I especially want to thank Senator Schumer, Congressman Barton and Congressman Markey for 

leaving other markups to come here today and to testify. 

When Senator Schumer was here, he was talking about old 

phrases and sayings that people might not relate to, let me use one 

more, it seems to me that there are legitimate reasons why in certain cases people should reveal their Social Security number. They, 

in my opinion, are finite in number. The old phrase I am going to 

use is that it seems to me today that ‘‘every Tom, Dick and Harry’’ 

is asking people across the country to reveal what their Social Security number is. We heard many individual instances today that 

people went through. Mr. Barton related the story about purchasing a cell phone and being asked for his Social Security number. Ms. Tubbs Jones had one and I mentioned the time Nancy and 

I were going out to buy an appliance. 

Now, think for a moment about the information, which we gave 

to this retailer. We gave them our names, our address, our zip 

code, our home telephone number, a picture identification card, and 

our driver’s license number to buy a refrigerator. This must stop. 

After we did that, the clerk, who recognized me, asked me for my 

Social Security number, and I said, ‘‘No.’’ Before I said ‘‘no,’’ I said, 

‘‘I do not think you should be asking me for that information. Why 

are you asking me that information?’’ She said, ‘‘We ask everybody.’’ I said, ‘‘No, I am not going to do that.’’ I said, ‘‘Check with 

your supervisor.’’ She went and checked with her supervisor and 

came back and said, ‘‘No, we do not really need to have that.’’ So 

I just hope that reason can prevail as we go forward. 

I hope two things as a result of today’s hearing as we move on. 

Number one is that before we get to any legislative fixes at all, 

that people within the sound of my voice will be a bit more careful 

about giving out this very sensitive information and doing basically 

what Mr. O’Carroll suggested, that unless you really know there is 

a legitimate reason why that person has to have that information, 

‘‘Just say no.’’ The second thing we need to do, beyond that, is just 

because it has proliferated to the point where it is really quite a 

crisis and has really destroyed some lives, we need to take some 

legislative action to restrict the ability of some folks to be asking 

for this very sensitive information. We are going to move forward 

on that. 

I thanked the folks before who have been working on this issue 

for years but, in my opinion, the time for talk has ended and the 

time for action is now, and we intend to move forward. 

Again, I want to thank all of you for your expert testimony, for 

spending so much time with us today. This hearing is concluded. 

[Whereupon, at 12:50 p.m., the hearing was adjourned.] 

[Submissions for the Record follow:] 


ccoleman on DSK8P6SHH1PROD with HEARING
183 

LexisNexis, Letter 

LexisNexis 

Reed Business 

July 3, 2007 

The Honorable Michael R. McNulty, Chairman 

Subcommittee on Social Security 

Committee on Ways and Means 

1102 Longworth House Office Building 

Washington, DC 20515 

Dear Chairman McNulty: 

Reed Elsevier Inc., on behalf of its LexisNexis division, appreciates the opportunity to submit comments for the record on Social Security number (SSN) privacy. 

We would like to commend the Subcommittee for its leadership on this important 

issue over the years, and hope that our experience in this area will be useful as 

you develop legislation regarding SSNs and identity theft. 

Reed Elsevier is one of the world’s leading publishing and information companies, 

employing more than 20,000 people in the United States. LexisNexis leads the information industry with the largest online information service, providing critical information to legal, business, and government professionals. Products and services provided by LexisNexis help businesses and government manage risk through fraud detection and prevention, identity authentication, and intelligent risk scoring and 

modeling. 

LexisNexis’ identity authentication products help detect and prevent identity theft 

and fraud by allowing financial institutions, insurance companies, government agencies, and others to determine whether people are who they say they are. In addition, 

LexisNexis provides products and services that are used to help professionals locate 

people and assets, support national security initiatives, and facilitate background 

checks on prospective employees. LexisNexis staff includes subject matter experts 

in identity theft, identity management, and identity authentication. 

One of the distinguishing aspects of the LexisNexis service is our extensive collection of public records information. Use of our public records information is an indispensable tool for gathering information and providing accurate answers to prevent 

and detect fraud, verify identities, locate individuals, perform due diligence 

searches, and provide risk management solutions and employment screening for 

businesses and governments worldwide. The overwhelming majority of the information sources on the LexisNexis service are public in nature, all of which are available to the general public through their public libraries, the local newsstand or 

bookstore, or from government offices. Many of these public records contain SSNs, 

which we use for indexing, matching and verifying data to help ensure the accuracy 

of the information in our databases. 

LexisNexis is committed to the responsible use of information and has been at the 

forefront of the privacy debate, leading industry efforts to balance consumer privacy 

interests with responsible uses of information for important and socially beneficial 

purposes. We recognize that key to the SSN issue is striking the appropriate balance between protecting consumer privacy and ensuring that important uses of this 

information can continue. We share the Subcommittee’s concern about the potential 

misuse of data for identity theft and other harmful purposes. Indeed, in the fight 

against identity theft, where verifying an individual’s identity is crucial, information 

from commercial databases such as LexisNexis is absolutely essential. 

Due in large part to the efforts of members of the Subcommittee and the important record built through hearings it has held, there has been increased recognition 

of the importance of striking a proper balance between protecting privacy and ensuring continued access to SSNs by business and government for important and socially beneficial uses. There have been other legislative proposals before this 

committeeand other committees to restrict SSNsin a way that would limit many of 

the critical and societally beneficial uses of SSNs. Ironically, such restrictions would 

actually inhibit many of the tools critical to fighting identity theft and fraud. We 

urge the committee to ensure that such uses are not restricted as it considers legislation in this area. 

We appreciate the opportunity to provide you with the following comments that 

we hope will be useful to the Subcommittee as it considers legislative options. Our 

comments below focus on the following two main areas: First, we will highlight the 

many important business-to-business and business-to-government uses of SSNs. 

Second, we will discuss several important issues that should be considered in developing any legislation in this area. 


ccoleman on DSK8P6SHH1PROD with HEARING
184 

1Statement of Louis J. Freeh, Director, Federal Bureau of Investigation, before the U.S. Senate Committee on Appropriations Subcommittee for the Departments of Commerce, Justice, 

State and the Judiciary and Related Agencies, March 24, 1999. 

I. Important and Beneficial Uses of SSNs by Business and Government 

Government agencies, businesses, researchers, and others rely on information contained in commercial databases to do their jobs. Commercial database companies 

like LexisNexis play a vital role in this effort by collecting information from numerous sources and creating comprehensive data collections that allow users to easily 

search and locate information. Without this critical public records information, the 

effectiveness of these government agencies, businesses, and researchers would be 

dramatically reduced. 

The use of SSNs is essential for person identification and record matching purposes and is critical in ensuring the accuracy of the information in these databases. 

SSNs allow persons to be identified accurately and ensure that records for different 

individuals do not get co-mingled, providing a false result. There are more than 

43,000 Robert Jones’ in the U.S. today. How else can someone distinguish one from 

another? A unique identifying number like the SSN is important to ensure that information collected about individuals is pertinent and accurate. 

The following examples describe some of the important ways in which commercial 

database services, such as LexisNexis, are used by our customers to help people, 

protect consumers, locate missing children, prevent fraud, and assist law enforcement efforts: 

• Locating sex offenders—SSNs are used to locate registered and unregistered sex offenders. There are more than 560,000 sex offenders in the U.S. 

Approximately 24 percent of these individuals fail to comply with address registration requirements mandated by law. LexisNexis provides products to law 

enforcement entities to help them locate registered and unregistered sex offenders. Use of SSNs for record matching and retrieval allows law enforcement to locate sex offenders even when the registration address has not been 

kept current. 

• Preventing and investigating terrorist activities—The use of commercial 

databases like LexisNexis is an important tool in the global battle against terrorism. Information provided by LexisNexis was instrumental in locating suspects wanted in connection with the September 11 terrorist attacks. Since 

September 11, the Department of Justice found that LexisNexis public 

records were mission critical in bolstering cases against terrorists. As a result, agents, investigators, attorneys, and analysts have full access to 

LexisNexis public records and other information. The SSNs contained in the 

LexisNexis database are a critical tool used by the FBI and other federal law 

enforcement agencies to locate suspects and witnesses and in investigating 

and building cases against suspected terrorists. 

• Locating and recovering missing, abducted and exploited children— 

LexisNexis has partnered with the National Center for Missing and Exploited 

Children to help that organization locate missing and abducted children. Locating a missing child within the first 48 hours is critical; after that time, the 

chance of recovering the child drops dramatically. In many of these cases, it 

is the non-custodial parent who has taken the child. The use of SSNs is critical in quickly locating the non-custodial parent and recovering the missing 

child. 

• Identifying and preventing fraud—Banks and other financial institutions 

routinely rely on SSNs to accurately match and retrieve public record information contained in LexisNexis’ databases to detect fraudulent credit card applications. Through the use of LexisNexis, credit card companies have significantly reduced losses due to fraud. Insurance companies have experienced 

similar successes through the ability to use SSNs in data matching and retrieval. The use of SSNs in public records and other sources is key to preventing fraud. 

• Locating witnesses and helping make arrests—Lawyers are major users 

of person locator databases. Use of SSN information in these databases, even 

when it is not displayed, is critical to tracking down witnesses in connection 

with civil litigation. Law enforcement agencies also are major users of commercial databases. For example, in 1998, the FBI made over 53,000 inquiries 

to commercial online databases. This information led to the arrests of 393 fugitives and the location of nearly 2,000 suspects and more than 3,000 witnesses.1


ccoleman on DSK8P6SHH1PROD with HEARING
185 

• Preventing and investigating financial crime—LexisNexis provides information to the Financial Crimes Enforcement Network (FinCEN), which supports federal, state and local law enforcement agencies in financial investigations and is heavily reliant on SSNs in these investigations. In addition, 

LexisNexis worked with the American Bankers Association to develop best 

practices to be used by banks and other financial institutions to prevent 

money laundering and ensure compliance with the USA PATRIOT Act. The 

use of SSNs by financial institutions to verify and validate information about 

prospective customers is critical to the success of that program. 

• Recovery of child support and other debts—Public and private agencies 

rely on SSNs and other information contained in information solutions and 

services products to locate persons who are delinquent in child support payments, other lawful debts, and to locate and attach assets in satisfying courtordered judgments. The Association for Children for Enforcement of Support 

(ACES), a private child support recovery organization, has stated that SSNs 

are the most important tool for locating parents who have failed to pay child 

support. ACES has had tremendous success using LexisNexis products to locate nonpaying parents. 

• Helping locate pension fund beneficiaries—The task of locating former 

employees is becoming increasingly difficult. Americans move on average 

every five years, particularly when they change jobs. Their names may 

change as a result of marriage or they may list slightly different names (e.g., 

leaving out a middle initial) on employment documents. To ensure that pension fund beneficiaries receive the money owed them, plan administrators and 

sponsors are required by federal law to use a commercial locator service, such 

as LexisNexis, to search for missing pension beneficiaries. These services are 

by far the most cost-effective and efficient way to find these former workers. 

Pension Benefit Information, a leading service locating these workers, reports 

that searching with a retiree’s SSN results in an 85–90 percent success rate 

in locating an individual, compared to a success rate of only 8 percent without 

use of this information. Loss of SSNs from public records and commercial locator services would dramatically increase the costs of locating former employees. Moreover, in many cases, employers would be unable to find former 

employees, resulting in a loss of pension benefits to the individual. 

II. Important Issues To Be Considered in Developing Legislation 

We applaud members of the Subcommittee for recognizing legitimate business and 

government uses of SSNs, and we will continue to work with the Subcommittee to 

help ensure that any legislation accomplishes its important objective of preventing 

the misuse of SSNs, while ensuring the continued use of SSNs for legitimate business and government uses. There are several important issues that should be considered by the Subcommittee in developing any legislation in this area. Our specific 

comments are focused in the following four areas: 

A. Business-to-Business and Business-to-Government Exemptions 

It is critical that any legislation restricting access, use or display of SSNs contain 

exceptions for important business-to-business (B-to-B) and business-to-government 

(B-to-G) uses. Among the exemptions needed are those that would preserve uses 

permitted under the Gramm-Leach-Bliley Act (GLBA) and the Fair Credit Reporting 

Act (FCRA). It is critical to ensure the continued use of SSNs consistent with GLBA 

for identity authentication and verification to assist in fraud detection, prevention, 

and investigation efforts, to perform an array of background checks, and to effectuate and enforce transactions requested by the consumer. Similarly, an exception 

should be included to ensure the continued use of SSNs for the permissible purposes 

under the FCRA. 

Moreover, it will be important to ensure that any legislation clarifies the scope 

of exemptions for law enforcement or national security purposes to ensure that information service providers, such as LexisNexis, can continue to access and acquire 

this information to be able to provide information tools to its law enforcement customers, as well as to users who, although not government officials, undertake law 

enforcement activities. Groups with which LexisNexis works, such as the National 

Center for Missing and Exploited Children, would be severely hampered if they 

could no longer access databases containing SSNs to do their jobs. 

If the law enforcement/national security exemption included in legislation is too 

narrowly crafted to only include government law enforcement agencies, many of the 

important law enforcement and national security applications performed by non-govVerDate Mar 15 2010 05:09 May 13, 2011 Jkt 063017 PO 00000 Frm 00189 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\63017.XXX GPO1 PsN: 63017

ccoleman on DSK8P6SHH1PROD with HEARING
186 

2See GAO Report 07–752 on Social Security Numbers (June 2007) (‘‘Report’’). 

ernmental entities will be excluded. Finally, exceptions should be included for locating individuals, pension fund beneficiaries, missing heirs, and individuals delinquent in the payment of child support or other debts. 

B. Public Records 

The issue of SSNs in public records is highly complex, and legislation in this area 

will have far-reaching implications. As explained above, public records are an important source of information used by LexisNexis in compiling data for our online service. We routinely use SSNs in public records to accurately match records from disparate data sources and to enhance the accuracy of record retrieval. In addition, our 

clients, including financial institutions, insurance companies, government agencies 

and others routinely rely on our public record databases containing SSNs for identity verification and validation purposes, to identify, prevent, and investigate identity theft and fraud and for other important purposes. 

When we refer to public records, we mean government records that typically and 

historically have been made available to the public. Examples of public records include titles to real property, real property tax assessor records, bankruptcy records, 

judgments, liens, state professional licenses (and their suspension and revocation), 

corporation filings, and death records. This information traditionally has been available to members of the general public upon request. 

As the General Accounting Office confirms in its June 2007 Report to Congressional Requesters on Social Security numbers, redacting SSNs from public records 

would be a difficult and challenging process.2 The summary of results reports that 

removal or truncation of SSNs in all public records may be ‘‘costly and may not fully 

protect SSNs.’’ For example, the report states that it cost Palm Beach County more 

than $2 million to complete software and manual removal of SSNs and other identifiers in approximately 40 million pages of records (Report at 25). In small cities or 

towns that do not have the resources to remove or truncate SSNs in public records, 

many may choose to simply cut off access to these records. 

Public records are a unique class of information that historically has been made 

available for public inspection. Therefore, we are concerned about any limits on the 

dissemination of this information. Any legislation being considered should provide 

an exception for an SSN that is incidental to the sale or provision of a document 

lawfully obtained from the Federal Government or state or local government made 

available to the general public, or from a document that has been made available 

to the general public via widely distributed media. This is the approach taken in 

S. 1208 and S. 1178. 

C. Rulemaking 

The proposed rulemaking provisions in some of the proposals being considered 

provide only limited guidance and wide discretion that could result in excessively 

restricted access to SSNs. Legislation should clearly delineate the restrictions on the 

sale and purchase of SSNs and provide a complete list of exceptions. To the extent 

that any rulemaking language is included, any discretionary authority should be 

limited, and the factors to be considered in promulgating the regulations limited to 

those specific factors necessary to balance restrictions on use and continued use of 

SSNs by legitimate businesses. 

D. Preemption 

Given the uniquely federal nature of SSNs and their importance to businesses engaged in interstate commerce, legislation regulating the use of SSNs should preempt 

state laws. It is important that a single, national law governing the sale, purchase, 

and display of SSNs be applied consistently on a nationwide basis. 

LexisNexis is committed to the responsible acquisition and use of SSNs and other 

personally identifiable information. LexisNexis shares the Subcommittee’s concern 

about the potential misuse of this information for identity theft and other harmful 

purposes. Nevertheless, as many of the Subcommittee members and witnesses recognized during the June 21 hearing, legitimate uses of SSN information are absolutely essential in the fight against identity theft and fraud and other important 

uses. Congress should not take any steps that would jeopardize the usefulness of 

such services.We thank the Subcommittee for having held this hearing on these important issues, and look forward to working with the members of the Subcommittee 

and others to develop an appropriate solution. 


ccoleman on DSK8P6SHH1PROD with HEARING
187 

We appreciate the opportunity to submit comments and hope that our comments 

will help the Subcommittee as it considers these issues and develops legislation. If 

you have any questions, please call me at 202/857–8253 or Steve Emmert of my 

staff at 202/857–8254. 

Sincerely, 

Steven M. Manzo 

f 

Vice President, Government Affairs 

Bruce Hulme, Legislative Director, National Council of 

Investigation and Security Services, statement 

Thank you for the opportunity to provide testimony on protecting the privacy of 

the Social Security number from identity theft. I am Bruce Hulme, Legislative Director of The National Council of Investigation & Security Services (NCISS) which 

represents professional private investigators and security officers across the nation. 

Our members agree that personal data, including Social Security numbers (SSNs), 

should not be readily disseminated and available to anyone with an Internet connection and a few dollars. We support efforts to limit the sale of the SSN except where 

there is a legitimate need for it. NCISS supports prohibitions on the display of Social Security numbers on checks, drivers’ licenses and employee ID badges. These 

provisions were in legislation previously considered by the Ways and Means Committee. 

We support the prohibition of the sale of personal data over the Internet to the 

general public. Such a prohibition, along with limitations on the use of the number 

on the documents cited above, would solve many of the issues related to identity 

theft. It is critical, however, that care be taken to provide clear exceptions for purposes that serve the public good. The exceptions in Section 3, as reported by the 

Energy and Commerce Committee, are insufficient and would result in unintended 

consequences. 

Financial institutions, schools, state and local governments and others have used 

the SSN as an identifier because it is uniquely attached to an individual. Private 

investigators have utilized the SSN for the same reason. It is the best way to assure 

that the John Smith we’re attempting to locate is the correct John Smith, and not 

one of 50,000 others. 

There are many John Smiths sharing the same birthday and living in the same 

town. Often the Social Security number is the only way to distinguish people sharing a name and other identifiers. 

Section 3 of HR 948 would deny private investigators access to this unique identifier by making it unlawful to sell or purchase the number. This will affect the accuracy of databases we access to locate the right John Smith. The SSN is also critically important for identifying women who often change surnames through marriage 

and divorce. The SSN does not change and allows us to locate these otherwise difficult to find witnesses. In California, database searches led directly to witnesses 

who recanted testimony and helped free a man wrongly imprisoned for twenty years. 

Without the ability to use the database, it is unlikely these witnesses would have 

been located. 

Due Process Issues 

The exceptions listed in Section 3(b)(3) include one for law enforcement. The absence of an exception for private investigators denies a critical tool to persons accused of crime. This is particularly important for indigent defendants because of the 

small expense budgets available to public defenders and appointed counsels. They 

need a cost effective way to locate witnesses. They don’t have the resources of the 

state. The lack of such an exception provides an obvious due process issue where 

the police have access to a database not available to defendants. 

Civil Trials 

These disparities can exist in civil cases as well. An individual consumer considering a lawsuit against a major corporation will be disadvantaged if this inexpensive 

tool for locating witnesses is made unavailable. Some meritorious cases would likely 

never be brought. 

In both civil and criminal trials, justice is served best by all parties getting access 

to all possible witnesses. Access to a fair trial is a fundamental right of American 


ccoleman on DSK8P6SHH1PROD with HEARING
188 

citizens. Without the ability to identify and locate all witnesses, that right is threatened. 

Investigators do not have access to the central criminal history database that law 

enforcement officials do, so it is essential to have addresses when seeking information about prior convictions. With prior address data, investigators know which 

courthouse records to search. Without the address, we may not even know in which 

states to look. This information is important for more than pre-employment purposes. In both civil and criminal trials, attorneys need to know the backgrounds of 

witnesses and potential witnesses. 

In testimony before this Subcommittee last year, I described how I was able to 

solve a case in which a 97 year old New Yorker was robbed of hundreds of thousands of dollars by a caregiver who attempted to hide his ill-gotten gains with relatives in South Carolina. Had I not been able to use a database, I never would have 

known to look for records in that state in which the funds were used to purchase 

real estate and for other purposes. 

Fighting White Collar Crime 

It is no secret that law enforcement does not have all the resources it needs to 

fight white collar crime, including identity theft. That crime is difficult to solve and 

often involves multiple jurisdictions. Many victims turn to investigators for assistance. In some instances, when accessing databases investigators have discovered 

that the criminal is using multiple SSNs. Under HR 948, we would be denied that 

information, which can assist other victims besides our client. In one instance we 

cited in testimony last year, a private investigator solved a case that authorities 

would not investigate because the client’s $80,000 in losses did not meet or exceed 

the law enforcement agency’s minimum threshold to investigate. Using the SSN, the 

investigator discovered that a former employee had stolen the client’s identity and 

had three aliases and at least three SSNs. 

The SSN is critical to investigators for conducting other fraud investigations as 

well. It can be particularly important for matters involving theft of intellectual property, ranging from copyrighted music and motion pictures to design of computer 

chips. 

These databases, using the SSN, have also been important for locating lost heirs 

and enforcing child support orders. Last year, the committee also heard from a witness about how critical the information can be for assisting in finding pension beneficiaries. 

We urge that a new exception be added to HR 948 in Section 3(b)(3): 

‘‘to identify or locate missing or abducted persons, witnesses, criminals and fugitives, persons suspected of fraud, persons who are or may become parties to litigation, parents delinquent in child support payments, organ and bone marrow donors, 

pension fund beneficiaries, missing heirs and persons material to due diligence inquiries.’’ 

During consideration of S–1178, the Senate Committee on Commerce, Science and 

Transportation adopted an amendment including similar language. Such an exception would permit appropriate uses of databases. NCISS supports strong sanctions 

for anyone who would misuse this data. 

Our association stands ready to assist the Committee as it develops legislation to 

protect Social Security numbers. 

f 

National Organization of Social Security Claimants’ 

Representatives, Englewood Cliffs, New Jersey, statement 

I am the Executive Director of the National Organization of Social Security 

Claimants’ Representatives (NOSSCR). Founded in 1979, NOSSCR is a professional 

association of attorneys and other advocates who represent individuals seeking Social Security disability and Supplemental Security Income (SSI) disability benefits. 

NOSSCR members represent these individuals with disabilities in proceedings at all 

SSA administrative levels, but primarily at the hearing level, and also in federal 

court. NOSSCR is a national organization with a current membership of nearly 

3,900 members from the private and public sectors and is committed to the highest 

quality legal representation for claimants. 

As demonstrated by the testimony at the Subcommittee hearing on June 21, 2007, 

the impact of identity theft on individuals can be catastrophic. The cost of recovering from identity theft has the potential to be astronomical and it can take years 


ccoleman on DSK8P6SHH1PROD with HEARING
189 

1SSA provides an explanation of the new registration process at its website: http:// 

www.ssa.gov/representation/directlpaymentloflapprovallfeeslformsl1099.htm. 

to repair the damage. Given the repeated warnings from agencies, including the Social Security Administration (SSA), our Statement for the Record describes what we 

believe is an unnecessary requirement by SSA that attorneys and others who represent claimants repeatedly disclose their own Social Security numbers (SSNs). 

BACKGROUND 

The Internal Revenue Service has advised SSA that it must set up a procedure 

to issue Forms 1099–MISC to attorneys and eligible non-attorneys who receive direct payment of fees for representation from SSA. 

The IRS Forms 1099–MISC will first go out in January 2009, covering fee payments made in calendar year 2008. SSA plans to issue Forms 1099–MISC to all appointed claimants’ representatives who receive payment of aggregate fees of $600 

or more in a calendar year. Generally, the payment amounts will be reflected in Box 

7 (Nonemployee compensation) on Form 1099–MISC. This includes representatives 

who are sole proprietors and those who have made the election to the IRS to be classified as a single-member Limited Liability Company (LLC) or single-member Limited Liability Partnership (LLP). 

In those situations where SSA is notified that the representative is an employee 

or partner, and the firm or other entity provides the necessary taxpayer information 

via this registration process, SSA will issue two Forms 1099–MISC: 

• One Form 1099–MISC will be issued to the representative reflecting aggregate payments made to the representative in his or her capacity as an employee or partner in Box 14 (Gross Proceeds Paid to an Attorney). 

• The other Form 1099–MISC will be issued to the firm or other entity reflecting aggregate payments made to its employees/partners in Box 7. 

The IRS has indicated to SSA that, while it performs a matching process for 

amounts reported in Box 7 of the Form 1099–MISC, it does not match against 

the amounts reported in Box 14. Box 14 might be termed ‘‘nonactionable’’ and 

is not used by the IRS to match with income reported on that individual’s tax return. NOSSCR has urged SSA to work with the IRS to eliminate this ‘‘nonactionable’’ reporting, which seems to serve no purpose. 

THE REGISTRATION PROCESS 

Starting January 1, 2007, SSA will make direct payment (through fee withholding) only to those attorneys and eligible non-attorneys who have completed the 

registration process.1 As described below, there are three forms that must be filed. 

Two forms are filed one-time only. However, one form, SSA–1695, must be filed for 

every new client and it is this form that requires disclosure of the representative’s 

own SSN. 

STEP ONE: All attorneys and eligible non-attorneys who want to receive direct 

payment of fees must complete and submit Form SSA–1699, ‘‘Request for Appointed 

Representative’s Direct Payment Information.’’ In addition, law firms, partnerships, 

corporations and multi-member LLCs/LLPs that have attorneys and/or non-attorney 

representatives as partners or employees who receive direct payment should provide 

tax ID information for that business entity, using Form SSA–1694, ‘‘Request for 

Business Entity Taxpayer Information.’’ Both of these forms, the SSA–1699 and 

SSA–1694, are submitted one time only. They also can be submitted online through 

a secure site. 

STEP TWO: In contrast, attorneys and eligible non-attorneys must submit the 

new Form SSA–1695, ‘‘Identifying Information for Possible Direct Payment of Authorized Fees,’’ in every case where they become the representative on or after 

January 1, 2007. 

This form is completed by the individual representative, not the firm, for each client. It must be filed in the SSA field office and in paper form only. Unlike the other 

two forms (which are submitted one time only), Form SSA–1695 cannot be filed online. The form requires not only the client’s Social Security number (SSN), but also 

the representative’s SSN. In addition, the firm’s Employment Identification Number 

(EIN) must be included. The instructions which appear at the bottom of the form 

state, ‘‘To SSA Staff: After the information on this form is entered into the appropriate system(s), immediately shred the form. Under no circumstances should this 

form be scanned, placed in a claims file or otherwise retained.’’ 


ccoleman on DSK8P6SHH1PROD with HEARING
190 

Our main concerns with the new registration process relate to use of the Form 

SSA–1695. Attorneys and eligible non-attorneys are understandably uneasy about 

the prospect of their SSNs appearing on the SSA–1695s. We have contacted SSA 

about our concerns regarding confidentiality and the increased potential for identity 

theft and have recommended alternative ways to deal with the process. 

• First, we believe that there is no reason to require the representative to include his or her SSN. In most cases, the law firm employing the attorney (as 

a solo practitioner, partner or associate) is the entity that is responsible for 

payment of income taxes on the fees received. And, the attorney is required 

to provide that law firm’s EIN on the SSA–1695. 

• Unlike the other two new forms in the new registration process (Forms SSA– 

1694 and SSA–1699), the SSA–1695 cannot be completed online and only a 

paper copy can be submitted to the SSA field office. While SSA instructions 

state that district office workers must shred the forms after processing the 

information, we have received reports from some NOSSCR members that mistakes are being made and that, in some cases, these forms are appearing in 

claims folders. 

• In our interactions with SSA, we have maintained that the form should require only the submission of the EIN for the firm that is liable for payment 

of the taxes. We also have proposed an alternate individual identifier, such 

as a PIN. 

CONCLUSION 

We believe that these repeated disclosures of a representative’s SSN on Form 

SSA–1695 are unnecessary and, potentially, an invitation to identity theft. We are 

constantly bombarded with warnings from many sources, including SSA, about privacy concerns and protection of our SSNs. From attorney bar rosters to health insurance to state departments of motor vehicles, we are told not to maintain records 

according to SSNs and to use other identifiers. Because of concerns with possible 

SSN misuse, many NOSSCR members have now opted to sign up for credit protection service. 

Questions for SSA regarding this process include: 

• Why must the SSN be submitted in every case, through an unsecure process, 

when in fact SSA already has this information from the secure one-time filing? 

• If SSA must have this information on this particular form, why can’t this information be submitted in a secure manner? 

• How can SSA guarantee that the representatives’ SSNs will not be subject 

to identity theft? 

f 

Property Records Industry Association, 

Morrisville, North Carolina, statement 

As you most assuredly are aware, the hottest buzzwords of the millennium include ‘‘Identity Theft’’ and ‘‘Personally Identifiable Information.’’ Everyone is wrestling with what is the solution to the problem of protecting individual privacy rights 

while at the same time encouraging commerce and improving compliance with government regulations. 

When serious consideration is given to the various facets of this topic, it quickly 

becomes clear that there is no easy, ‘‘one-size-fits-all’’ solution. There are many factors to be considered. However, there is little disagreement that something needs 

to be done to counter the abuses that undermine faith in existing institutions. 

The Property Records Industry Association (PRIA) is a coalition of public and private participants of the property records industry, cooperating to formulate positions 

on issues of common interest. Among other objectives, the Association works to identify problems, opportunities and solutions that will make property records systems 

more efficient, effective and responsive to the public. The Association also works to 

identify areas of consensus within the industry, leading to recommendations for national standards pertaining to recordable documents. 

PRIA began seriously engaging the issue of social security numbers appearing in 

real estate documents in early 2003. As part of its Winter Conference in March 

2003, PRIA hosted a ‘‘Privacy/Access Roundtable’’ in Washington DC. At the concluVerDate Mar 15 2010 05:09 May 13, 2011 Jkt 063017 PO 00000 Frm 00194 Fmt 6633 Sfmt 6621 I:\WAYS\OUT\63017.XXX GPO1 PsN: 63017

ccoleman on DSK8P6SHH1PROD with HEARING
191 

sion of the Roundtable, PRIA moved to establish a Privacy/Access Workgroup. The 

workgroup then initiated an email listserv discussion around a number of privacyin-public-records topics. Those discussions led to various presentations and open 

forum sessions at PRIA conferences in 2003 and 2004. In July of 2004, PRIA was 

invited to testify before the House Ways and Means Committee Social Security SubCommittee regarding HR 2971, the Social Security number Privacy and Identity 

Theft Prevention Act of 2003. Both PRIA Winter and Summer conferences in 2005, 

2006 and 2007 include presentations and open forum discussions of this privacy and 

information security dynamic. PRIA wrote a White Paper in January of 2006 titled, 

‘‘Privacy and Public Records: Making Practical Policy’’ and drafted Model Legislation called the ‘‘Social Security number and Privacy Protection Act’’ (SSNAPP Act) 

in July of 2006 (see Appendix A). Our focus is on the importance of social security 

numbers to the real estate and public record industry. 

Identity theft 

Before the turn of the last century, one would have to take a ride on horseback 

to the county seat to pull the original Deed books to find information about a parcel 

of real estate. This is the concept of ‘‘practical obscurity’’ of public records—personal 

information could be found in a public record, but there was little risk of harm to 

an individual because someone had to take the time to search the records at the 

recorder’s office. 

Technology undeniably has had a significant impact on access to public records. 

Technological developments raise concerns about how much information is too much 

information and whether there should be global access to public records. 

It is a common misconception that easy access to public records has facilitated 

identity theft or land fraud. While posting documents that contain certain key information on the Internet, such as credit card numbers, social security numbers, and 

signatures, can provide a criminal with some of the information needed to commit 

identity fraud or theft, there is no evidence to support any claim that this is systematically being done to perpetuate identity theft crimes. There are many easier, and 

far more efficient, ways for identity thieves to obtain this information in today’s 

world, as opposed to combing through public records and hoping to find something— 

a ‘‘needle in the haystack’’ approach. 

That being said, a proactive approach to apply greater discretion to what public 

land record information is disclosed online is a reasonable approach to discourage 

the use of public land records to perpetuate identity theft and fraud. An accommodation between information privacy and access is appropriate and necessary. 

It is important in any discussion involving the protection of social security numbers that legislators consider the full impact of these actions on their constituents 

as well as the industries that serve them. Public land records contain information 

critical to the economy of the United States because much of the information collected by the private sector comes from public records and that information is key 

to the proper function of the real estate industry. Both the public custodians and 

the private business sectors that use the public records to facilitate critical functions 

within the real estate transaction; i.e. listings, mortgages, title insurance, closings, 

escrows and others; need to be considered when deciding how best to protect social 

security numbers from identity theft. 

The Role of Public Records in Combating Identity Theft and Fraud 

It is important to understand that access to public records data is actually a very 

effective weapon in combating identity fraud and theft. Social security numbers 

compiled from public records (including court records) have proven to be the most 

reliable tool in verifying an individual’s identity, which helps prevent the rapid increase in identity fraud victims. Commercial databases compiled using public 

records for identity authentication are routinely used to detect fraud, including credit card application fraud, insurance application fraud, and other types of fraud. 

Thus, efforts to restrict the collection and use of personal information contained in 

public records, though well intended, actually may hinder efforts to prevent identity 

theft by depriving businesses, government and law enforcement officials of valuable 

data that is used to authenticate identities and protect the public. Security must 

be balanced with access. 

Prohibiting Complete Social Security Numbers on Public Land Records 

As you review testimony to enhance the privacy of your constituents, most are 

more than likely looking to prohibit the use and disclosure of an individual’s social 

security number in public records. However, it is important to understand for which 


ccoleman on DSK8P6SHH1PROD with HEARING
192 

purposes and how social security numbers are used by government and the private 

sector, as well as what impact redaction and truncation have on record custodians, 

business, and the public. 

Privacy Focus: Social Security Numbers 

A number of privacy advocates warn that the display of social security numbers 

in public records must be reduced as they are a primary piece of information in the 

commission of identity theft crimes. At least forty-one states and the District of Columbia maintain at least one record that displays an individual’s social security 

number, according to a U.S. Government Accountability Office (GAO) study conducted in November 2004. Given the nature of the social security number as a 

unique identifier for important records and services, advocates are concerned that 

display of the numbers in public records makes it easier for identity thieves, both 

domestic and international, to obtain new credit and bank accounts in the names 

of their victims. 

As outlined in a white paper created by the PRIA, ‘‘Privacy and Public Land 

Records: Making Practical Policy’’ available for your review at www.pria.us, under 

a section entitled ‘‘Identity Theft,’’ at this time there does not appear to be evidence 

supporting the claim that information derived from public records, including social 

security numbers, is systematically used to perpetuate identity theft crimes. That 

being said, it is reasonable to expect that government should, and must, institute 

reasonable safeguards to protect citizens from becoming victims of identity theft as 

a result of public land record abuse. 

Legitimate Business and Government Uses of the Social Security Number 

Several legitimate business and governmental uses exist for social security numbers. These include preventing and investigating terrorist activities, locating and recovering missing children, identifying and preventing fraud, locating witnesses and 

helping make arrests, preventing and investigating financial crime, enforcing child 

support obligations and government assistance programs, helping locate pension 

fund beneficiaries, helping locate blood, bone marrow, and organ donors, contributing to important medical research efforts,notifying families about environmental 

hazards. The benefits gained from the legitimate use of a social security number 

need to be balanced with the potential for abuse. 

Balancing Benefits Versus Abuse of Public Records/Access to Social Security Numbers 

The Federal Government, states and businesses are either legally obligated, or 

choose to voluntarily control, the disclosure of records containing social security 

numbers. While privacy advocates call for greater control of access to social security 

numbers in public records, such a restrictive approach would threaten the ability 

of the government and businesses to accurately and efficiently verify the identification of citizens or consumers and authenticate that they are who they say they are. 

Identity thieves are using a number of methods to obtain personal identification 

information, including ‘‘phishing’’ scams in which thieves send bulk or targeted 

emails to consumers impersonating legitimate businesses asking consumers to provide personal information such as social security numbers. ‘‘Phishing’’ has recently 

been expanded to include ‘‘spear-phishing.’’ ‘‘Spear-phishing’’ is where identity 

thieves send bulk or targeted emails falsely appearing as a commanding officer, in 

the case of military personnel, or as a superior or executive within an organization. 

These thieves ask that the employee email the supervisor or executive, at the false 

email address, their personal information to update records or to confirm their personal information. Another new scam is ‘‘pharming,’’ where identity thieves redirect 

visitors from legitimate websites to ‘‘spoofed’’ websites (websites which look legitimate, but are not), and then collect personally identifiable information from these 

visitors. 

It is important then that any legislative or regulatory attempts to restrict the access to, the display of, or use of social security numbers in public land records 

should carefully weigh the actual threat of identity theft with the efficient and current use of social security numbers in public land records by state and local governments, business and citizens. 


ccoleman on DSK8P6SHH1PROD with HEARING
193 

Considerations for Federal Legislation 

Prior to the development of federal legislation that affects the use of social security numbers and other data elements in public records policymakers should consider the following points: 

• Before exempting any specific data element from collection by a government 

entity or from disclosure to the public, policymakers should first set out to 

understand what records contain that data element and the reason for its 

presence in that record. Data elements are necessary in certain records and 

have a clear purpose. For example, without complete social security numbers 

in certain critical documents, such as tax liens, government and the private 

sector lose the ability to match data about individuals. Studying the potential 

impact of redaction or limits on collection of information is highly recommended before making any policy changes. Policymakers should solicit direct input from the custodians of the records and those that use them to determine how a proposed policy will affect the records themselves as well as 

the ability of custodians to perform their duties. 

• Policymakers must identify, or provide, funding mechanisms to carry out the 

redaction of public records so as to avoid an unfunded mandate. In this regard, a ‘‘go forward’’ recording fee for creating electronic versions of all recorded documents could be used to carry out the redacting process as well. 

Suggested Elements for Social Security Number Legislation 

The PRIA has drafted model legislation, the Social Security number and Privacy 

Protection Act (SSNAPP Act), which is included in Appendix A and incorporates the 

elements below. 

Legislation Relating to Public Records Should be on a ‘‘Day-Forward’’ Basis 

Any legislation impacting a governmental agency’s acceptance, redaction, or truncation of documents which contain social security numbers should be effective on a 

‘‘day-forward’’ basis only. This means that any legislation should not require redaction or expungement of records already filed or recorded. 

In particular, recorders will be faced with a nightmarish task of redacting records 

that are already filed, or recorded, including those in other mediums such as microfilm or microfiche. Depending on the method used for redaction, the recorder may 

be faced with managing two databases or two sets of redacted documents. It is possible that mistakes or omissions could occur in the public record if recorders are required to manage and maintain two sets of databases, or redacted and unredacted 

images. Redaction of official records and updating archival and security copies could 

mean having to delve into technology or methods of preservation that are no longer 

available to the recorder or archiving facility. 

Immunity of Recorders 

Recorders are custodians, or stewards, of the information they are required by law 

to maintain. It should be the responsibility of document preparers and individual 

consumers, and not recorders, to make sure that documents presented to recorders 

for recording do not contain social security numbers if the inclusion of social security numbers is prohibited by law. Therefore, recorders should be immune from suits 

relating to documents filed or recorded that include social security numbers, and 

any liability should be imposed on the document preparers. 

Authority to Redact Post Effective Date 

Model legislation may grant recorders the authority to redact social security numbers from documents that are recorded after the effective date of that legislation. 

This authority should not affect the integrity of the original recorded document. 

This can be accomplished by masking the information available to the general public, for example, on the Internet, using redaction software that allows disclosure of 

the unredacted image on certified documents used for official purposes, such as probate. 

This provision provides an important ministerial function—that of providing certified copies of records from government offices. Certification of public documents requires recorders and clerks to provide an exact copy of a recorded document. Recorders need to be explicitly empowered to redact the social security number after the 


ccoleman on DSK8P6SHH1PROD with HEARING
194 

effective date of the legislation, without compromising the integrity of future certified copies. 

Voluntary Redaction by Public Prior to Delivery for Recording 

Legislation may grant members of the general public the opportunity to remove 

social security numbers and other private identifying information prior to the filing 

of their documents, such as provided in Texas (Texas Property Code Section 11.008). 

This provision removes discretionary issues from the government official and provides members of the general public with a self-help remedy if they are concerned 

about the privacy of their personally identifiable information. We recommend an individual be able to remove, or request removal of, a social security number or other 

personally identifiable information from the document before or after it is recorded. 

Recorders Not to Redact Information from Documents to be Recorded 

Legislation may provide that recorders not have the responsibility of redacting social security numbers or other personally identifiable information from documents 

prior to recording. Recorders would continue to record whatever they receive. 

This provision continues the important ministerial, non-discretionary function— 

that of creating a public record of documents exactly as they were presented to the 

government offices. Certification of public documents then complies with the recorders’ and clerks’ responsibility to provide an exact copy of the document as it was 

when recorded. 

CONCLUSION 

Practical and informed policy making is a must to further solidify the integrity 

of our public records system and to achieve a meaningful balance between the 

public’s concern about privacy and businesses’ legitimate use of data. Enlightened 

policymakers have an opportunity to resolve these issues in a way that empowers 

consumers, enables business, and enhances our nation’s economy. 

Appendix A 

SOCIAL SECURITY NUMBER AND PRIVACY PROTECTION ACT 

1. Definitions 

(a) ‘‘Personally Identifiable Information‘‘ means one or more of the following specific unique identifiers when combined with an individual’s name: 

(1) Soocial security number. 

(2) Driver’s license number or state identification card number. 

(3) Financial institution account number, credit, debit or charge card number. 

(4) Date of birth. 

(b) ‘‘Preparer’’ means the person or entity who creates, drafts, edits, revises or last 

changes the documents that are recorded with the [Recorder]. 

2. Inclusion of Personally Identifiable Information 

The Preparer of a document shall not include an individual’s Personally Identifiable Information in a document that is prepared and presented for recording in the 

office of the [Recorder]. This Section shall not apply to documents that were executed by an individual prior to the effective date of this Act. All documents described by this Act are subject to inspection and copying by the public. 

3. Reduction on Recorder’s Publicly Available Internet Web site 

If a document that includes an individual’s Personally Identifiable Information 

was recorded with the [Recorder] and is available on the [Recorder’s] public Internet 

website, the individual may request that the [Recorder] redact such information 

from the Internet record. The [Recorder] shall establish a procedure by which individuals may request that such Personally Identifiable Information be redacted from 

the Internet record available on the [Recorder]’s public Internet website, at no fee 

to the requesting individual. The [Recorder] shall comply with an individual’s request to redact Personally Identifiable Information. 


ccoleman on DSK8P6SHH1PROD with HEARING
195 

4. Liability of Preparer 

A Preparer who enters Personally Identifiable Information in a document that is 

prepared and presented for recording is liable to the individual whose Personally 

Identifiable Information appears in the recorded public document in violation of Section 2 of this Act for damages of up to five hundred dollars ($500.00) for each act 

of recording. 

5. Liability of Recorder 

The [Recorder] shall not be liable for any claims arising from a violation of this 

act. 

6. Applicability 

(a) This Act shall not apply to state or federal tax liens, certified copies of death 

certificates or other documents required by law to contain Personally Identifiable Information that are filed or recorded in the office of the [Recorder]. 

7. Effective Date This Act shall be effective onlll. 

Æ 


ccoleman on DSK8P6SHH1PROD with HEARING