Driver's License Security: Federal Leadership Needed to Address Remaining Vulnerabilities
Released: 2012-09-21T00:00:00

Letter

Background

Drivers’ licenses have become widely accepted as an identity document because they generally contain identifying information such as the licensee’s name, photograph, physical description, and signature and may include features that make them more difficult to counterfeit or alter.

As of 2010, about 210 million drivers were licensed in the United States.Due to the crucial role of the driver’s license as an identity document, individuals may try to fraudulently obtain them for a wide range of purposes. For example, some may try to get a license in someone else’s name to commit financial fraud, such as stealing government benefits, opening bank or credit card accounts, and writing counterfeit checks. Criminals may also obtain multiple licenses under different identities so they can commit criminal acts and, if apprehended, avoid having charges associated with their true identity. Illegal aliens may use a counterfeit license to live in the United States.

The prevalence of driver’s license fraud in the United States is difficult to fully determine or quantify. The Federal Bureau of Investigation collects data from all states on a number of different categories of crimes through its Uniform Crime Reporting program, but this program does not have a category specifically for driver’s license fraud. Estimates are, however, available from a few sources. For example, in 2010 the Federal Trade Commission (FTC) reported that complaints involving the issuance or forging of drivers’ licenses accounted for 0.9 percent of the approximately 251,000 identity theft complaints it received overall (about 2,300 complaints). Some evidence suggests, though, that many identity theft cases go unreported and thus the total number of identity theft cases may be substantially higher than the FTC figure. In addition, the Center for Identity Management and Information Protection analyzed 517 identity theft cases investigated by the U.S. Secret Service between 2000 and 2006, and found that counterfeit drivers’ licenses were used in 35 percent of these cases.

Verifying license applicants’ identity and preventing fraud has traditionally been a state responsibility, but after the terrorist attacks of September 11, 2001, there was an increased federal interest in driver’s license issuance and security, as evidenced by the passage of the REAL ID Act of 2005. States are not mandated to comply with the Act; however, the Act establishes specific procedures states must follow when issuing drivers’ licenses in order for those licenses to be accepted by federal agencies for “official purposes,” including, but not limited to, boarding commercial aircraft, entering federal buildings, and entering nuclear power plants. As of July 2012, 17 states had enacted laws expressly opposing implementation or prohibiting the relevant state agencies from complying with the REAL ID Act. Under the REAL ID Act, DHS has primary responsibility for establishing how and when states can certify their compliance and determining whether states are compliant. DHS issued regulations in 2008 that provided details on how it would determine whether states were REAL ID-compliant. Although the Act set a May 11, 2008, deadline for compliance, DHS’ regulations allowed states to request an extension of the full compliance deadline to May 11, 2011, and the agency later pushed the date back to January 15, 2013. If states are interested in complying with the Act, they must submit documentation no later than 90 days before this deadline (around October 15, 2012). Initially, after the January deadline, individuals with licenses from states determined to be compliant may continue to use their licenses for official purposes, regardless of when these licenses were issued, according to DHS. However, by December 1, 2014, certain individuals—those born after December 1, 1964—must be issued new, REAL ID-compliant licenses by states that have been determined to be compliant in order to use their licenses for official purposes. By December 1, 2017, all license holders must be issued new, REAL ID-compliant licenses in order to use them for official purposes.

The REAL ID Act sets minimum standards for several aspects of the license and identification card issuance process. In the area of identity verification, the Act establishes the following requirements, among others, for states seeking compliance:

Documentation: States must require license applicants to provide documentation of their name, date of birth, SSN, address of principal residence, and lawful status in the United States;

Verification: Requires states to verify with the issuing agency the issuance, validity, and completeness of the documents presented as proof of name, date of birth, SSN (or verify the applicant’s ineligibility for an SSN), address, and lawful status, with specific requirements to confirm SSNs with SSA and verify lawful status of non-citizens through an electronic DHS system; Image capture: Requires states to capture and store digital images of all documents presented by license applicants to establish identity, such as passports and birth certificates, and capture the facial images of all applicants;

Renewals: Requires states to establish an effective procedure for confirming or verifying the information provided by individuals seeking to renew their licenses;

One driver, one license: Requires states to refuse to issue a license to an applicant who already holds a license from another state, without confirming that this other license has been or is in the process of being terminated; and

Staff training: States must establish training programs on recognizing fraudulent documents for appropriate employees involved in issuing licenses.

States Have Taken Steps to Detect Counterfeit Documents and Identity Theft, Including Many Required by the REAL ID Act

State driver licensing agencies use a combination of different techniques to verify the identity of license applicants and prevent fraud. These various procedures are used together to detect license fraud and no single technique is sufficient, according to officials at several licensing agencies. All states have in place some procedures to detect counterfeit documents, which may include electronic systems to verify data contained on documents—such as the Social Security card—or visual inspection of documents. Many states also use other techniques to detect fraud, including facial recognition, cross-state checks, or internal controls for licensing transactions. (See table 1.)

All states plus the District of Columbia are now using Social Security Online Verification (SSOLV) to verify license applicants’ SSNs and other personal data, consistent with the REAL ID Act’s requirement to confirm SSNs with SSA. The number of states verifying SSNs with SSA has increased substantially since 2003, when we reported that 25 states were Even states with laws opposing implementation of the REAL doing so.ID Act are checking SSNs through SSOLV. Use of SSOLV allows states to verify that the SSN provided by a license applicant is valid. In other words, SSOLV allows states to check whether (1) someone has been issued this SSN, (2) the SSN matches the name and date of birth provided by the applicant, and (3) the SSN is associated with a deceased individual. Officials in most of the states we interviewed said they never or rarely issue a permanent driver’s license before obtaining a verification of the applicant’s personal data. In fiscal year 2011, the SSOLV verification rate—that is, the percentage of SSOLV verification requests that confirmed the validity of the personal data submitted—was 93 percent on average nationwide, and almost all the states had rates above 85 percent. The national average is an increase from the 89 percent average rate in fiscal year 2008, the earliest year for which data were available. Officials in almost all of the states we interviewed said they had no concerns about the percentage of SSOLV queries that failed to verify. The most common reason for non-verifications nationwide in 2011 was that the name presented by the applicant did not match the name associated with the SSN on file with SSA. Officials in most of the states we interviewed cited name changes as the most common reason for this. A license applicant may have changed their name after marriage, but not reported this change to SSA. In such cases, states may ask applicants to resolve the issue with SSA and then return to the licensing agency so the SSOLV query may be run again.

Most states are also using Systematic Alien Verification for Entitlements (SAVE), another REAL ID Act requirement, but officials in some of the states we interviewed reported challenges with the system. SAVE, operated by DHS, verifies the information in documents that non-citizen applicants provide to prove they have lawful status in the United States. As of 2012, licensing agencies in 42 states plus the District of Columbia had agreements with DHS to use it.agreements do not use the system consistently for each non-citizen applicant. For example, officials in one state we interviewed said they used SAVE only when the documents submitted by a non-citizen raised questions, such as if they appeared tampered with or indicated a non- citizen no longer has lawful status in the country. Officials in the five However, a few states with such states we interviewed that were not using SAVE most often cited technological challenges, such as difficulties providing front-counter staff in local issuance branches with routine access to the system. Officials in all but one of these states said they plan to start using the system if these issues are resolved.

Officials in half of the states we interviewed that were using SAVE said they were concerned about the verification rate they obtained. When states submit data from non-citizens’ lawful status documents, the system searches a variety of DHS databases in an effort to verify these data. If data are not verified on the first attempt, the state may initiate a second and then a third attempt, which entail manual checks by DHS staff and additional costs for the state. Officials in one state, for example, told us when SAVE does not verify lawful status on the first attempt, moving on to additional attempts requires additional efforts by staff. Officials in a few states said they believe data entry errors and delays in updating the data in DHS databases are common reasons that data are not verified; DHS officials also listed these as possible factors. Among all licensing agencies using SAVE, the verification rate for initial SAVE queries during fiscal year 2011 varied from 45 percent to 91 percent, according to DHS data (see fig. 1). DHS officials said it is possible that states that only submit SAVE queries when there is a potential problem with a document have a higher percentage of queries that do not verify on the initial attempt.

Another fraud prevention technique is inspection of identity documents by front-counter staff. In all the states we contacted, front-counter staff in local licensing offices inspects identity documents in an effort to detect counterfeits. This step is often done even for documents that are also verified electronically, such as SSN documents. Inspection generally involves the visual or physical examination of documents. Staff told us they look for security features embedded in authentic documents, such as watermarks and proper coloring in Social Security cards or raised seals on birth certificates. They may check if documents are printed on security paper that is used for authentic documents, and also to see if a document appears to have been tampered with. Staff may use a variety of tools to assist with their inspection. For example, they may use black lights and magnifying glasses. For certain types of documents, such as out-of-state drivers’ licenses, they may consult books showing the most current versions of these documents. Staff in about half of the states we interviewed also used document authentication machines designed to detect counterfeit documents such as out-of-state licenses and passports. Officials in one of these states explained that front-counter staff scans certain types of documents into the machines, and the machines indicate if the document is authentic. Finally, training also plays a role in helping staff inspect documents. Officials in all the licensing agencies we contacted said they have provided fraudulent document recognition training to their staff, which is also required by the REAL ID Act; most said that 100 percent of their staff have received such training. Even officials in states we contacted that have laws prohibiting implementation of the REAL ID Act said they have taken this step.

Many states are using facial recognition techniques or fingerprinting which, while not required by the REAL ID Act, may detect applicants who attempt to obtain a license under an identity other than their own. According to AAMVA, licensing agencies in 41 states plus the District of Columbia were using facial recognition, fingerprinting, or both techniques as of June 2012. Among the 11 states in our review, 5 routinely used biometric techniques as part of their verification procedures (4 used facial recognition and 1 used fingerprinting) and an additional 4 had plans to implement facial recognition procedures. Licensing agency officials in the remaining 2 states said they are barred by state law from using facial recognition to screen license applicants.

State licensing agencies generally perform facial recognition checks only against their own photo databases, according to the National Institute of Standards and Technology (NIST) which conducts studies on facial recognition. an applicant. These checks are not necessarily a purely automated function, and staff may need time to review images that are potential matches to determine if they really are of the same individual.

While states’ facial recognition programs are focused on detecting in- state license fraud, states also have some procedures in place that may detect cross-state fraud. As of March 2012, 23 states and the District of Columbia were participating in a photo-sharing program facilitated by AAMVA that is designed to help detect fraud across state lines. This program allows a participating state to obtain the facial image associated with a surrendered license from the issuing state if that state also participates in the program. Through this process, a fraudulent license could be detected if a state query yields either no photo or a photo that does not match the applicant. In addition, state licensing agencies may detect cross-state fraud through other systems. For example, all states plus the District of Columbia participate in the Problem Driver Pointer System (PDPS), to check if license applicants have adverse driving records. actions in other states, PDPS may also help states identify applicants who already have licenses in other states that they have not divulged. Also, a few state licensing agencies said they may use the National Law Enforcement Telecommunications System to check if a license applicant already has a license in another state. This system is generally only available to law enforcement personnel, not to all front-line staff in license issuance offices. Officials in one state told us they use it only in limited circumstances, such as when there is reason to suspect license fraud.

The PDPS searches the National Driver Register, a database of state-provided driver information maintained by the Department of Transportation’s National Highway Traffic Safety Administration, and if an individual is identified as having an adverse record, the PDPS “points” to the state where the individual’s record may be obtained. A PDPS check is typically used to detect certain serious traffic violations or license suspensions or revocations associated with an applicant in other states, which might make the applicant ineligible to receive a license in a new state. example, officials in almost all the states we interviewed said front-line staff may not override a non-match in an electronic verification system such as SSOLV in order to issue a license. Additionally, officials in most states told us managers examine licensing transactions to ensure proper procedures were followed. For example, officials in one state told us an audit team checks to make sure all required identity documents were collected as part of the transaction. Other procedures that states employ include monitoring licensing transactions to identify anomalies that may indicate internal fraud, such as the issuance of multiple duplicate licenses to the same individual; rotating staff among different stations so they do not know where they will be working on any particular day; and randomly assigning license applicants to the employee who will serve them, to avoid collusion.

Figure 2 illustrates how the various systems and efforts work together to detect and prevent driver’s license fraud in one of the states we reviewed. This state’s process includes a number of the different types of checks we have described. An individual applying for a driver’s license proceeds through two different stations, where several checks and other steps are performed by different employees. Certain steps are performed at one station only, such as taking the applicant’s photo, checking documents with the authentication machine and performing the electronic verifications such as SSOLV. But other steps are performed at both stations, including entering data from identity documents into the licensing agency’s computer system. State officials told us that having two employees enter applicants’ data helps guard against internal corruption, because if one employee tries to collude with an applicant to enter false information, this will be caught by the other employee. If no potential fraud is found through all the checks at the local branch, the applicant is issued a paper license valid for 45 days. The licensing agency performs some additional checks after the issuance of the temporary license, including a facial recognition check against all photos in its database and verification that the applicant’s mailing address is valid. If no concerns are found, the state mails a permanent license to the applicant.

Although states are already implementing a number of the identity verification procedures required by the REAL ID Act, some states may not comply with certain provisions for various reasons. For example, officials in one state we interviewed said they are not verifying applicants’ lawful status through SAVE because the state does not require people to have lawful status in the United States to obtain a license. Officials said the state has no plans to enact such a requirement. In other cases, state officials told us they find certain statutory or regulatory requirements to be burdensome or unnecessary. For example, several of the states we interviewed do not verify SSNs through SSOLV when individuals renew their licenses, a step required by DHS’ regulations. State officials told us it is not necessary to take this step because these SSNs were already verified at the time of initial license application; officials in one state also mentioned the cost of a SSOLV query as a reason not to re-verify an SSN. DHS said one reason it is necessary to re-verify personal data such as SSNs for renewals is that such checks can detect cases where the data are actually associated with a deceased individual. Re-verifying SSNs may therefore detect attempts to renew a license fraudulently under the identity of a deceased individual. In addition, several of the states we interviewed do not require applicants to provide a document showing their SSN. Officials in one of these states said the Social Security card is easy to tamper with so it is more valuable to verify the actual SSN than to assess the validity of the paper document. Officials in two states said they do not plan to comply with the deadlines in DHS’ regulations, which will require states, after DHS has determined they are REAL ID-compliant, to process new applications and issue new licenses to certain license holders by 2014 and all license holders by 2017. These officials cited the expected resource burden of processing so many applications in a short period of time.

States Report Success in Preventing License Fraud but Cross-State Fraud and Counterfeit Birth Certificates Remain Challenges

States Report Success in Detecting Counterfeit Documents and Identity Theft

Officials in most of the states we interviewed said their anti-fraud efforts have had success in preventing the use of counterfeit documents to obtain licenses, especially documents associated with completely fictitious identities. Indeed, officials in the majority of our 11 selected states said they have seen a decline in attempts to obtain licenses using counterfeit documents. SSOLV makes it harder for criminals to obtain a license under a fictitious identity. Officials in most of the states we interviewed said SSOLV checks have helped make the use of fraudulent documents more difficult. For example, officials in one state told us that before it started using SSOLV, about 75 percent of license fraud cases involved counterfeit Social Security cards, but the use of counterfeit documents such as these has declined significantly and is no longer the main type of fraud they see. Officials in several states also cited SAVE as having made the use of counterfeit documents more difficult. For example, officials in one state commented that when they started using SAVE in 2002 they identified many forged documents intended to prove lawful status in the United States, but over time they have seen fewer forgeries of these documents. Officials in several states said their efforts to train staff on fraudulent document recognition or to prevent corruption among their staff have also had an impact. Officials in one state said the use of counterfeit Social Security cards has declined partly because front- line staff is better trained on how to check documents for security features. Officials in another state told us internal control procedures, including having two staff separately inspect each document, has made license fraud more difficult to accomplish. Several states provided data indicating a decline in recent years in the number of license fraud investigations involving fraudulent documents. For example, one provided data showing a steady decline in the annual number of investigations based on referrals from front-counter staff, from 156 in 2002 to 36 in 2011. Officials said this trend reflects a decline in the use of counterfeit documents, because such cases are the ones typically detected by front- counter staff.

State officials also reported successes in using facial recognition technology to detect license fraud, particularly fraud involving identity theft. SSOLV has made it harder to get a license under a fictitious identity, but it cannot determine whether a valid SSN and other personal information (name and date of birth) submitted by a license applicant are truly associated with that applicant. Some evidence suggests that criminals seeking a license are now more likely to try to obtain one under another real identity—using genuine and sometimes forged identity documents to do so. For example, law enforcement officials in one state said that as the number of fraud cases involving counterfeit documents has declined, they have seen an increasing number of what they called imposter fraud: attempts to steal another person’s complete identity— including name, SSN, and date of birth—and obtain a license under that identity. Officials in several states told us facial recognition plays an important role in preventing such fraud. Officials in one state, for example, said it is their most effective tool for detecting identity theft, and has detected over 100 license fraud cases annually since 2008. Officials in another state told us facial recognition has resulted in about 6,200 investigations and 1,700 arrests since its implementation in 2010. Officials in a few states told us after they introduced facial recognition they detected individuals with a number of licenses under different identities—as many as 10 different identities associated with one individual in one case. However, state officials also said there are some limitations in the ability of facial recognition to detect matches between photos when a person’s appearance has been altered in one photo. For that reason, among others, an official with NIST said facial recognition may be less effective than other biometric techniques such as fingerprinting and iris recognition in detecting matches.

Examples of How Facial Recognition Detected License Fraud In one state we visited, licensing agency employees were issuing licenses to individuals using real identities of other people for payments of $7,500 to $12,500 a piece. As part of the scheme, these employees provided their customers with legitimate identity documents belonging to other people, such as Social Security cards and birth certificates. Facial recognition successfully identified that the individuals who had paid for the fraudulent licenses had already received other identification documents from the state and therefore had photos in the state’s database. In another example from the same state, according to state officials, a foreign national who these officials identified as being on the “no-fly” list had obtained licenses under four different identities. This individual had been deported from the United States multiple times, and each time was able to re-enter the country under a different identity. Using facial recognition software, the state was able to detect him by comparing the photos associated with the different licenses.

License Fraud across State Lines and the Use of Counterfeit Birth Certificates Remain Challenges

States Remain Vulnerable to Cross-State License Fraud

States’ vulnerability to license fraud perpetrated by individuals who cross state lines has been a longstanding issue, and it remains a challenge for states despite the success officials report in detecting other kinds of Officials in the majority of states we interviewed told us their fraud.states bar their license holders from also holding licenses in other states, and the REAL ID Act also prohibits states from issuing a license to an applicant who already has one in another state. However, individuals may try to obtain licenses in multiple states. For example, criminals may try to get licenses under different identities by using the identity of someone who resides—and may have a license—in one state to obtain a license under that identity in a different state, perhaps to commit financial fraud under their stolen identity. Officials in all the states we interviewed acknowledged they lack the ability to consistently determine if the identity presented by a license applicant is already associated with a license- holder in another state. Some existing verification systems may accomplish this goal in limited circumstances but do not fully address the gap. For example, officials in a number of states told us a check against the problem driver database (Problem Driver Pointer System) will not detect a license in another state if it is not associated with any driving violation. Moreover, the national law enforcement data exchange system (National Law Enforcement Telecommunications System) is cumbersome to use if a state does not know which state an applicant may already have a license in, and in any case is generally only available to law enforcement personnel. Similarly, the AAMVA photo sharing program cannot be used to detect fraud if an applicant does not present an out-of- state license to be verified, and not all states participate. Finally, facial recognition programs generally only check a state’s own internal photo database. They cannot detect cases when a criminal tries to obtain a license under the identity of someone else if neither of them have a license in the state.

Example of Cross-State Fraud In one state an individual obtained an identification card under the identity of a person residing in another state by successfully using identity documents belonging to that person. The identity thief used this identification card as authorization to work. The crime was only discovered when the victim filed an identity theft complaint with the state in which the criminal obtained the fraudulent identification card and had been working.

States are trying to develop additional mechanisms for addressing cross- state license fraud, but none are fully operational yet. For example, a consortium of five states is developing a state-to-state verification system that would enable states to check if a license applicant’s identity— including name, date of birth, and a portion of the SSN—is already associated with a license in other states. Officials in almost all the states we interviewed said such a system would be useful. Officials in several states said it could detect criminals who try to use the identity of someone in one state to obtain a license in another state—provided the identity theft victim is a license holder in the first state. However, officials in a number of states said there would be challenges to implementing such a system, primarily related to cost and ensuring the security of personal data. The state consortium expects to complete its design work by 2013 and implement a pilot by 2015, but said it may not be until 2023 that the states have entered data on all their license holders into the system. Beyond the planned state-to-state system, some states have considered other approaches to addressing cross-state license fraud. Officials in several states told us cross-state facial recognition, in which states run checks against neighboring states’ photo databases, could be a helpful tool. However, they cited obstacles, including the much larger number of potential matches that staff would have to examine, the technological incompatibility of different states’ facial recognition programs, and privacy concerns. In addition, officials in one state suggested that it would be helpful if SSA informed states when an SSN submitted to SSOLV for verification had already been submitted previously, because this would alert states that someone might be fraudulently applying for licenses in multiple states. SSA officials said developing this capacity could slow down SSOLV response times and raise privacy concerns because SSA would need to store SSNs submitted by states. While AAMVA’s photo sharing program can play a role in detecting certain kinds of cross-state fraud, the program’s usefulness is limited because fewer than half the states currently participate, and AAMVA told us it lacks the resources to promote use of this program among additional states.

Even with the progress reported in preventing the use of certain types of counterfeit documents, the use of forged or improperly obtained birth certificates remains a challenge that leaves states vulnerable to license fraud. Officials in about half the states we interviewed said it can be challenging to detect counterfeit birth certificates. Officials in several states told us the wide variety of formats in which birth certificates are issued across the country makes detecting counterfeits difficult. According to NAPHSIS, there are thousands of different versions of birth certificates because formats vary over time and among issuing agencies.often sees birth certificates from another state, where security features on birth certificates vary from county to county, and it can be difficult to keep track of all the variations. Besides forging birth certificates, criminals may improperly obtain someone else’s genuine birth certificate. For example, criminals may steal or purchase the documents and use them as part of packages of identity documents to obtain licenses fraudulently. In other cases criminals may be able to obtain another person’s birth certificate directly from a vital records agency. According to NAPHSIS, 15 states have virtually no restrictions on who may obtain a birth certificate from a vital records agency. Even in states that restrict access, there may be limited safeguards to ensure birth certificates are only provided to those who have a legitimate right to them. For example, officials at one vital record agency acknowledged that local staff who issue birth certificates do not receive fraudulent document recognition training, and a criminal with a sophisticated fake identification document such as a driver’s license could use it to obtain someone else’s birth certificate.

Example of Using A Forged Birth Certificate to Obtain a License Fraudulently In one state an individual obtained a victim’s personal data and applied for a license using a counterfeit birth certificate and counterfeit SSN documentation. This fraud was only discovered when the alleged criminal fled an accident involving a plane carrying narcotics, and checked into a nearby motel under the false identity.

A system exists that could help address the issue of counterfeit birth certificates and meet the REAL ID requirement to verify birth certificates with the issuing agency when they are submitted by license applicants, but state officials said there are challenges with using it and no states are currently doing so for this purpose. The Electronic Verification of Vital Events (EVVE) system is designed to verify the accuracy of data on birth certificates including name, date of birth, and either the date the certificate was filed or the file number. It is operated by NAPHSIS, the organization that represents the nation’s vital records agencies. As of February 2012, 43 of 57 vital records agencies were participating in the system, meaning at least some of their birth records could be electronically verified. Licensing agencies in three states participated in a multi-year pilot ending in 2011, in which they used the system to verify birth certificates for license applicants. Officials in one of the pilot states told us that, based on their experience, EVVE has the potential to help detect counterfeit birth certificates, because while criminals may be able to obtain another person’s name and date of birth and create a counterfeit birth certificate, it is more difficult to obtain the correct file date on the victim’s birth certificate—which must match to pass an EVVE check. However, officials in this state cited challenges they experienced during the pilot, including confusion about which date on the birth certificate is the file date that should be entered for verification and gaps in the state’s vital records data which make verification difficult for birth certificates filed during certain periods of time. Similarly, officials in most of the states we interviewed that had not participated in the pilot said it could be helpful to use EVVE, but also expressed concerns about the cost of using the system, the fact that not all vital records agencies are participating, and the completeness or accuracy of the vital records data that are already available for verification through it. As an interim solution, some licensing agencies are working towards verifying at least their own states’ birth records electronically. Officials in several of the licensing agencies we interviewed have considered or are planning to start working with the vital records agencies in their states to electronically verify birth records for license applicants born in-state. Officials in one licensing agency told us they have discussed this approach with the vital records agency in their state, and see it as an interim step before EVVE is more viable. Licensing agencies face obstacles in these efforts, though, such as birth records not being fully in electronic format or the reluctance on the part of vital records agencies to participate in electronic birth record verification arrangements.

Our investigative staff exploited the vulnerabilities discussed above to fraudulently obtain drivers’ licenses in the three states where we made such attempts. In each state, investigative staff obtained genuine licenses under fictitious identities—combinations of name, date of birth, and SSN that do not correspond to any real individuals. In two states, a staff member obtained two licenses under two different identities. In each attempt, staff visited local license issuance branches and submitted various counterfeit documents to establish their identities, depending on state requirements. In all cases they submitted a counterfeit driver’s license and a counterfeit birth certificate, both purportedly from other states. (See figure 3 below for examples of the counterfeit birth certificates used.) In some cases, staff also submitted other documents including fake Social Security cards and fake pay stubs. In most of these five attempts across the three states, we were issued permanent or temporary licenses in about 1 hour or less. In only one case did a front- counter clerk appear to question the validity of one of the counterfeit documents, but this clerk did not stop the issuance process. All three states check the validity of applicants’ personal data—including SSN— through SSOLV, but assuming SSOLV checks were performed, they were not sufficient to detect these fraud attempts because the SSNs were valid.

These successful fraud attempts demonstrate several vulnerabilities in states’ defenses against license fraud. First, the fact that we were able to use counterfeit out-of-state licenses in each attempt further confirms states’ inability to consistently check if applicants’ identities are already associated with licenses in other states. If the envisioned state-to-state verification system were in place, then the states where we applied might have discovered that the out-of-state licenses we submitted were fakes and did not actually exist. Under current plans, this system would verify the validity of licenses submitted from other states as well as check if applicants have licenses from other states that they have not divulged. Even in the absence of the state-to-state system, if all states participated in AAMVA’s photo sharing program, then the counterfeit out-of-state licenses might have been detected through a request to the purported state of origin of the license to validate it. We specifically selected states for our undercover work that are not among the 23 participating in this program. But as long as any states are not participating, criminals could present counterfeit licenses from these states, and even participating states would be vulnerable. The second vulnerability relates to birth certificates. We were likely able to use counterfeit birth certificates containing fictitious information because no state licensing agencies are verifying birth certificate data through EVVE. None of the front-line clerks in the offices where we applied for licenses questioned the validity of the counterfeit birth certificates presented. Finally, the third vulnerability is that some states are still not using facial recognition or other biometric techniques to detect identity theft. The fact that the two states where our staff applied for multiple licenses are among the nine states that do not use facial recognition technology or other biometric techniques most likely made it easier in these states for our staff to obtain two licenses under two different identities. Facial recognition checks may be able to detect multiple licenses associated with the same individual. While it might still be possible for a criminal to obtain a license fraudulently even if all states utilized a state-to-state verification system, EVVE, and facial recognition, use of these systems would likely have increased the chances of detecting our fraudulent license applications.

SSA and DHS Have Enhanced Verification Systems but DHS Has Not Provided Adequate Guidance on REAL ID Implementation

Agencies Have Improved Existing Systems and Helped States Develop New Verification Systems

SSA has taken actions that enhance licensing agencies’ ability to verify SSNs and other personal data. Specifically, the agency has addressed two areas of concern that we raised in 2003. First, to enhance the level of service provided to states, SSA established performance goals, including hours when SSOLV is to be available and response times. Second, to address a vulnerability that might leave states open to license fraud by criminals stealing the identity of a deceased individual, SSA now automatically checks all inquiries against its death records.

DHS has similarly taken several actions to improve the usefulness of SAVE. To improve data accuracy and verification rates, the agency monitors verification rates in order to identify problems with data accuracy in the databases SAVE accesses, which contribute to unsuccessful initial verification attempts. Officials in several of the states we interviewed acknowledged that DHS has been taking steps to improve verification rates, the timeliness of query responses, and the accuracy of underlying data, and these officials reported improvements in these areas. In addition, DHS has recently developed a new portal for accessing and using SAVE. Known as the Verification of Lawful Status (VLS) system, it will be accessible through AAMVA’s electronic hub for accessing other verification systems such as SSOLV. DHS is pilot testing VLS, with roll out to all states planned by the end of fiscal year 2012. Officials in several states told us they believe this new approach will make it easier for them to use SAVE more consistently or extensively. Officials in two states, in fact, said the deployment of VLS would enable them to start using the system in the future. DHS has conducted webinars for licensing agency staff on using SAVE, and it is developing online training modules that DHS officials say will also include instruction on interpreting verification results.

Beyond these efforts to improve existing verification systems, DHS has provided financial assistance to support states’ efforts to develop new verification systems that could be used to comply with the REAL ID Act. Section 204 of the REAL ID Act authorizes grants to assist states in conforming to the minimum standards in the Act. DHS has awarded about $63 million through various grants since 2008 for upgrading the communications and verification systems infrastructure including development of the state-to-state system and pilot testing other systems. All of these funds were awarded to a group of five states that were part of a consortium that was formed for this purpose. At least half of the $63 million is being used by the consortium for the development and implementation of the state-to-state system, and these funds are available through fiscal year 2016. DHS officials said these funds are designed in part to induce states to start using the system, but in the longer term, the agency expects states to pay for the operation of the system. Besides funding support, DHS has also provided technical advice to help the states understand the federal requirements the system must meet. In addition to the funds set aside for the state-to-state system, some of the grants were also used to support a pilot project in which licensing agencies verified birth certificates through EVVE. However, based on a recommendation from the consortium, DHS does not plan to provide any additional financial support to state licensing agencies for further pilot testing of EVVE because of high transaction costs charged by state vital records agencies. DHS officials are also concerned about inaccuracies in electronic birth records that may lead to non-verifications, and the fact that EVVE checks may still be evaded by people who obtain someone else’s birth certificate in one of the states where birth records are accessible to the general public.

DHS has also provided grants to individual states to help them improve their driver’s license security procedures, including identity verification. The Driver’s License Security Grant Program (DLSGP) provided over $200 million in grants to states and territories from fiscal years 2008 to 2011. All but 2 states applied for and received grant funds during this time period (see fig. 4). Initially established as the REAL ID Demonstration Grant program, the DLSGP provides assistance to states for improving the security and integrity of their drivers’ licenses in ways that are consistent with the requirements of the REAL ID Act. Both states with and without laws opposing implementation of the REAL ID Act were eligible to apply for and received these grants. Funds could be used for planning activities, equipment purchases, equipment maintenance and repair, and related costs. Officials in states we interviewed said they used their funds for efforts such as installing or updating facial recognition systems, providing staff anti-fraud training and information sharing, and in one case supporting efforts by the state’s vital records agency to digitize its birth records.

DHS has conducted other activities that may help combat license fraud generally, and officials in several of the states we interviewed told us they were participating in these efforts. However, these efforts are broad in nature and are not specifically designed to support compliance with the REAL ID Act. For example, DHS operates a forensic laboratory that investigates the use of counterfeit identity documents and is a resource available to driver licensing agencies. DHS also leads task forces involving federal, state, and local law enforcement agencies that are designed to combat identity document fraud, including driver’s license fraud. These task forces seek to pursue criminal prosecutions and financial seizures.

DHS Has Not Provided Comprehensive Guidance to Help States Implement the REAL ID Act

Despite the approaching January 2013 deadline for compliance, DHS has not provided timely, comprehensive, or proactive guidance on how states seeking REAL ID compliance could meet the identity verification requirements. For example, DHS did not issue written guidance on how to meet specific REAL ID Act identity verification requirements for over 4 years after it issued its final regulations in 2008. Officials in most of the states we interviewed expressed a need for additional guidance on how they could meet the identity verification requirements of the REAL ID Act and DHS regulations. Because of this lack of guidance, officials in these states said they are uncertain as to whether they will be in compliance with various provisions when the law goes into effect, and some are concerned about investing resources in particular steps only to find out afterwards that they are not in compliance. For example, officials in one state said there was a lack of clarity about whether military identification cards may be used to prove identity under the REAL ID Act. In the absence of formal written guidance, they have often had to make assumptions based in part on DHS officials’ informal remarks.

The guidance DHS has provided regarding verification of license applicants’ identities has generally been ad hoc or in response to state requests. For example, DHS provided additional information to states in June 2012 in the form of answers to frequently asked questions posted to Moreover, agency officials previously indicated that DHS its website. was planning to issue a comprehensive guidance document specifying See http://www.dhs.gov/files/programs/secure-drivers-licenses.shtm. actions states could take to meet REAL ID Act requirements and what states should cover in the certification plans they submit to DHS for approval. However, DHS officials said they are now reevaluating that decision. Agency officials said DHS will continue to provide additional guidance as needed through the frequently asked questions web page, presentations at conferences of state licensing agency officials, or responses to specific questions from individual states. However, state officials reported mixed experiences with how DHS has responded to their specific questions. On the one hand, officials in several states said DHS has been responsive to questions they had on meeting particular REAL ID Act requirements. For example, officials in one state said DHS has for the most part responded relatively quickly to e-mail inquiries. On the other hand, however, officials in some states cited instances in which DHS has not responded promptly, or at all, to their questions. For example, officials in one state told us they had not received a response to a question they first asked DHS in 2009 about whether enhanced drivers’ licenses would meet REAL ID Act requirements. Officials in another state told us it took longer than they expected for DHS to respond to a question about whether refugees and asylum seekers should be treated as permanent U.S. residents when they apply for a license.

DHS guidance is especially critical for two key REAL ID Act requirements—not issuing licenses to persons who already have them from other states and verifying birth certificates—given that the electronic verification systems designed for those purposes will not be fully operational for years, and the approaching deadline for states to submit their compliance plans. DHS regulations require states to use electronic verification systems as they become available, but also authorize states to use alternative methods approved by DHS.not providing comprehensive guidance specifying what alternative procedures would be acceptable for compliance with these requirements, DHS officials also indicated they have no plans to promote certain strategies they consider potentially useful that might partially help states meet these requirements, such as: (1) expansion of the AAMVA photo However, in addition to sharing program to additional states, and (2) expansion of licensing agencies’ efforts to verify birth certificates through their own states’ birth records for applicants born in-state. Instead, DHS plans to consider alternatives states propose in their compliance plans. DHS officials said they believe this approach gives states opportunities to develop innovative solutions and flexibility to consider their own circumstances. However, officials in some states we interviewed expressed a need for direction from DHS to help identify possible alternatives. Officials in one state we interviewed, for example, wanted assistance in identifying what procedures could be followed to meet these requirements until the state- to-state verification system and EVVE are fully operational. Officials in another state told us that in their view, DHS would need to provide additional options for meeting these requirements in order for DHS to determine states are compliant by January 2013.

Conclusions

Since the terrorist attacks of September 11, 2001, states have largely closed off certain approaches that identity thieves and terrorists have used to fraudulently obtain drivers’ licenses, and federal actions have contributed to this progress by enhancing verification systems or by providing financial support to help states develop new systems. But, as our investigative work demonstrates, it is still possible to exploit several remaining vulnerabilities in states’ identity verification procedures to fraudulently obtain genuine drivers’ licenses, contrary to the purpose of the REAL ID Act. DHS has provided some guidance about certain aspects of REAL ID implementation primarily in response to state questions. However, the lack of proactive guidance by DHS on interim solutions for certain REAL ID Act requirements has hampered states’ ability to fully address these gaps. For example, even though the state-to- state system is still years from fruition, there are opportunities before the system’s expected completion date of 2023 for states to at least partially address the REAL ID requirement to prevent people from getting multiple licenses from different states—and thereby close off certain paths to cross-state fraud. But without guidance and encouragement from DHS, states and other agencies may be less likely to coordinate in pursuit of these opportunities. Similarly, even though EVVE is not yet fully operational, states can still make it harder for criminals to use forged birth certificates by, for example, checking their own birth records for license applicants born in-state. However, without leadership from DHS, states and other agencies may be less likely to coordinate in pursuit of these opportunities or see the value in taking action. Additionally, in the absence of an effective DHS strategy to help states address these REAL ID Act requirements and high-risk vulnerabilities while the national systems are being developed, states may elect not to comply with the Act, may invest in ad hoc or stopgap measures that are not sufficient for compliance, or most importantly, may be ill-equipped to adequately combat this type of fraud.

Recommendations for Executive Action

To enhance state driver licensing agencies’ ability to combat driver’s license fraud, consistent with the requirements of the REAL ID Act, we recommend that the Secretary of Homeland Security take the following interim actions while national systems to detect cross-state and birth certificate fraud are being developed: 1. Work with state, federal and other partners to develop and implement an interim strategy for addressing cross-state license fraud. Such a strategy could include, for example, expansion of AAMVA’s photo sharing program or enhanced utilization of SSOLV to identify SSNs that are queried multiple times by different states. This strategy should include plans for sharing best practices and ideas for alternative solutions among the states. 2. Work with states and other partners to develop and implement an interim strategy for addressing birth certificate fraud. Such a strategy could include, for example, coordination between driver licensing agencies and state vital records agencies to verify birth certificates for license applicants born in-state.

Agency Comments and Our Evaluation

We provided a draft of this report to DHS and SSA for review and comment. In its written comments (see app. I), DHS did not concur with either of our recommendations, saying that interim strategies for addressing cross-state and birth certificate fraud are not needed. The agency said it has informed states that existing systems and procedures may address these issues and meet regulatory requirements, and has provided grant funds to help states develop their own new solutions. DHS emphasized that states need the flexibility to adopt solutions that best fit their individual circumstances. We acknowledge in our report that DHS has supported states’ efforts to address cross-state and birth certificate fraud in the ways it outlines in its comments. However, we continue to believe that DHS needs to assume a more proactive role in these areas— and that it is possible to do so without being overly prescriptive. State driver licensing agencies remain vulnerable to cross-state and birth certificate fraud. Existing systems and methods are not sufficient to address the vulnerabilities, as our undercover work demonstrates. Given the anticipated date (2023) for full implementation of the state-to-state system, and the continuing issues with driver licensing agencies’ use of the EVVE system, states need new interim solutions and alternatives now. And, officials in many of the states we contacted still said they are confused about how to comply with certain REAL ID provisions, such as those related to cross-state and birth certificate fraud, despite DHS’ efforts to provide information through conferences and responses to individual state questions. A formal strategy for addressing these vulnerabilities in the short term that is made available to all states in a consistent manner would better enable states to learn about and implement new options. Furthermore while DHS notes in its comments that HHS has a statutory responsibility for setting minimum standards for birth certificates, DHS involvement in this area is also critical because establishing date of birth is a central part of the driver’s license application process. DHS also provided technical comments, which we incorporated as appropriate.

In its written comments (see app. II), SSA asked that we remove from our first recommendation the reference to enhanced utilization of SSOLV as one option for detecting cross-state fraud. As SSA notes, we do acknowledge in our report that there may be challenges with such use of SSOLV. Accordingly, our recommendation does not direct DHS and SSA to proceed with modifying SSOLV. It directs DHS to consider, in consultation with relevant partners, the enhanced use of SSOLV as one of a range of options for addressing cross-state fraud. We expect that DHS and SSA would more thoroughly evaluate the potential benefits and challenges of using SSOLV for this purpose and jointly determine whether to include this option in an overall strategy for combating cross-state fraud. Consequently, we made no change in response to this comment. SSA also provided technical comments which we incorporated as appropriate.

We are sending copies of this report to the relevant congressional committees, the Secretary of Homeland Security, the Commissioner of Social Security, and other interested parties. This report is also available at no charge on GAO’s website at http://www.gao.gov.

If you or your staff have any questions regarding this report, please contact me at (202) 512-7215 or bertonid@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Staff members who made key contributions to this report are listed in appendix III.

Appendix I: Comments from the Department of Homeland Security

Appendix II: Comments from the Social Security Administration

Appendix III: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, Lori Rectanus, Assistant Director; Lorin Obler; Joel Marus; Susannah Compton; John Cooney, Jr.; Sarah Cornetto; Keira Dembowski; Holly Dye; Robert Graves; Dana Hopings; Kristy Kennedy; Otis Martin; Mimi Nguyen; George Ogilvie; Almeta Spencer; and Walter Vance made key contributions to this report.

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