The Social Security Number: Legal Developments Affecting Its Collection, Disclosure, and Confidentiality
Released: 2014-02-04T00:00:00

Origin of the SSN and Federal Government Usage

The social security number (SSN) was first introduced as a device for keeping account of contributions to the Social Security program. Through the years, however, the use of this identifying number has been expanded by government entities and the private sector to keep track of many other government and private sector records. In the view of some, a person's SSN has attained the status of a quasi-universal personal identification number.

Federal and state agencies collect and use SSNs to verify eligibility for and administer government programs that provide benefits and services. Private sector entities routinely obtain and use SSNs for a wide variety of purposes. Today one can be required to furnish one's SSN to obtain a driver's license, apply for public assistance, donate blood, or take out a loan. SSNs may also be used to access insurance records, track down student loan defaulters, compile direct marketing mailing lists, or identify convicted felons on lists of potential jurors. There is no single federal law that comprehensively regulates SSN collection and confidentiality.

The Social Security Act of 1935

The original Social Security Act of 1935, did not expressly mention the use of SSNs, but it did authorize the creation of some type of record-keeping scheme. Section 807(b) of the act stated,

Such taxes shall be collected and paid in such manner, at such times, and under such conditions, not inconsistent with this title (either by making and filing returns, or by stamps, coupons, tickets, books, or other reasonable devices or methods necessary or helpful in securing a complete and proper collection and payment of the tax or in securing proper identification of the taxpayer), as may be prescribed by the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury.

In addition, Section 808 of the act provided that "[t]he Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall make and publish rules and regulations for the enforcement of the title." Shortly after passage of the Social Security Act, the Bureau of Internal Revenue required the issuance of an account number to each employee covered by the Social Security program.

Executive Order 9397

Although the SSN was originally established for the Social Security program, other government agencies soon realized that it could be used as a convenient identifying number for tracking other government programs. Use of the SSN as a federal government identifier was based on Executive Order 9397, issued by President Franklin Roosevelt, which provided as follows:

Whereas certain Federal agencies from time to time require in the administration of their activities a system of numerical identification of accounts of individual persons; and ...

Whereas it is desirable in the interest of economic and orderly administration that the Federal Government move toward the use of a single, unduplicated numerical identification system of accounts and avoid the unnecessary establishment of additional systems:

Now, therefore ... it is hereby ordered as follows:

1. Hereafter any Federal department, establishment, or agency shall, whenever the head thereof finds it advisable to establish a new system of permanent account numbers pertaining to individual persons, utilize exclusively the Social Security account numbers ...

However, as a Social Security Administration (SSA) staff paper indicated, it was not until the 1960s that federal agencies began to adopt the SSN as a general government identifier in other contexts:

The impetus for the Executive Order came from consideration the Civil Service Commission was giving to establishing a numerical identification system for all Federal employees, using the SSN as the identifying number. However, in spite of the Executive Order, there was little program use of SSN's within the Federal Government in the 1940's and 1950's, because there was no real incentive for those agencies which kept individual records (e.g., Civil Service Commission, the Armed Forces, IRS, etc.) to change their record keeping systems. The potential for expanded use of the SSN was increasingly recognized during this period, though. After its adoption in 1961 by the Civil Service Commission for Federal employees, the next major use of the SSN for other than social security purposes occurred in 1962, when the IRS adopted the SSN as its official taxpayer identification number. While the use of the SSN by IRS has no relationship to the social security system as such, this step was nevertheless considered entirely appropriate.

On November 18, 2008, this longstanding executive order was amended by President George W. Bush. The changes to E.O. 9397 reflect the "policy of the United States that Federal agencies should conduct agency activities that involve personal identifiers in a manner consistent with protection of such identifiers against unlawful use." The most significant change was to make use of the SSN by federal agencies voluntary rather than mandatory. Section 1 of E.O. 9397 now reads,

Hereafter any Federal department, establishment, or agency may, whenever the head thereof finds it advisable to establish a new system of permanent account numbers pertaining to individual persons, utilize the Social Security Act account numbers....

Citizenship and Social Security Numbers

Even though individuals are required to disclose their SSN under many circumstances in dealing with governmental entities, possession of an SSN is not a condition of U.S. citizenship. U.S. citizens are not required to be enumerated at birth. This is why regulations issued by the Social Security Administration regarding obtaining an SSN state that "(a)n individual needing a social security number may apply for one by filing a signed form SS-5, 'Application For A Social Security Number Card,' ... " Each individual determines when he or she needs a number based upon federal and state statutes requiring disclosure of an SSN.

In reality, it would be very difficult to work or engage in many activities in this country without an SSN. Virtually all tax matters require the disclosure of one's SSN, as does participation in many government programs, and obtaining a driver's license. While one may choose not to disclose an SSN in some circumstances, one may have to forgo a benefit. For example, a parent can refuse to provide an SSN for a child on an income tax form, but then the parent cannot claim a tax credit for that dependent child.

While an SSN is not a condition or an indication of U.S. citizenship, an SSN is necessary to work in the United States. When hiring a new employee, the employer is required to ask for the employee's Social Security card to verify employment eligibility. The employer is also required to report the employee's name and SSN on a W-4 form at this time. Additionally, an employee must report his/her SSN on an I-9 form also to verify employment eligibility.

Three different Social Security cards are available depending on authorization to work in the United States. Citizens, noncitizens lawfully admitted to the United States for permanent residence, and noncitizens with Department of Homeland Security (DHS) permission to work permanently in the United States can receive a Social Security card with the individual's name and SSN printed on the card. People lawfully admitted to the United States on a temporary basis who have DHS authorization to work can receive an SSN card with the proviso "VALID FOR WORK ONLY WITH DHS AUTHORIZATION" on the card. Persons admitted to the United States without work authorization from DHS but with a valid non-work reason for needing an SSN can receive an SSN card with the proviso "NOT VALID FOR EMPLOYMENT" on the card. A valid non-work reason includes applying for government benefits or services to which the person is entitled under federal regulations or state laws that require an SSN to receive assistance. The SSA has stated that it will not assign an SSN to a noncitizen without work authorization solely to get a driver's license, to receive a credit check, or to file taxes. Persons in these circumstances may use the Individual Taxpayer Identification Numbers (ITINs) issued by the Internal Revenue Service (IRS).

Identity Theft Concerns

In recent years, federal agencies have increasingly recognized that SSNs are a key to the perpetuation of identity theft, which occurs when a person tenders another's identifying information to carry out financial fraud or other criminal activity. This is in part due to the fact that organizations, both private and public, use SSNs for account authentication, often utilizing a social security number as a password to access or modify account information. The Social Security Administration now truncates SSNs on the millions of benefit statements it mails each year. Since 2007, beneficiaries of the Federal Thrift Savings Plan (TSP) have received randomly assigned account numbers in place of their SSN, which had previously served as the account number.

Concerns have been raised that persons who carry federal ID or program cards with SSNs on them have an increased risk of identity theft through loss, theft, or visual exposure of their cards. Testimony in 2009 by the U.S. Government Accountability Office (GAO) cited prior work documenting that SSNs were displayed on millions of cards issued by federal agencies, including 42 million Medicare cards, 8 million Department of Defense (DOD) identification cards and insurance cards, and 7 million Veteran Affairs (VA) identification cards. GAO noted in its 2009 testimony that the VA and DOD had begun taking action to remove SSNs from identification cards. As of June 1, 2011, as current military identification cards expire, they are being replaced with new cards having a unique DOD identification number. The VA has continued to use the SSN as an identifier with the SSN embedded in magnetic stripes on the cards. However, the VA plans to remove the SSN completely from its identification cards by late 2016.

A 2008 report issued by the Office of the Inspector General of the Social Security Administration, entitled "Removing Social Security Numbers From Medicare Cards," had reviewed the vulnerabilities associated with displaying SSNs on medical documents and identification cards, and the steps taken by the Centers for Medicare and Medicaid (CMS) to address the issues relating to removal of the SSN from Medicare cards. The SSN, as part of the health insurance claim number, helps CMS to interact with beneficiaries. While the SSA directs persons not to carry their cards, CMS, contrastingly, instructs Medicare participants to carry the card so that the card can be shown whenever medical care is provided. In a 2006 report to Congress, CMS had estimated the cost of transitioning to a non-SSN based Medicare identifier to be over $300 million. In conclusion, the OIG report stated,

While we recognize SSA cannot prohibit CMS from using SSNs as its primary beneficiary identifier, we believe it can help reduce the potential threats to SSN integrity by taking a proactive role in supporting legislation that would mandate the removal of SSNs from Medicare cards. We recognize that such legislation could be inconvenient for both agencies and may result in additional costs. However, given the potential threats to SSN integrity, such a challenge should not discourage SSA from taking additional steps to safeguard SSNs. Accordingly, we recommend that SSA:

1. Proactively work with OMB and Congress to expedite the removal of SSNs from Medicare cards in a manner that ensures compliance with Federal guidelines and consistency with approaches taken by other Federal agencies.

2. Continue to partner with CMS to develop an alternative Medicare identifier that meets both agencies' needs.

In August of 2012, the House Ways and Means Committee held a hearing concerning feasible options for HHS and CMS to remove SSNs from Medicare cards. CMS claimed that it would now cost as much as $845 million to remove SSNs from Medicare cards. During the hearing and in a corresponding report, GAO outlined more cost-effective solutions such as truncating the number or replacing the SSN with a new "Medicare Beneficiary Identifier." In response to these concerns, the House passed the Medicare Identity Theft Prevention Act of 2012, which would have directed the Secretary of HHS to establish cost-effective procedures to ensure that an SSN is not displayed on Medicare cards issued after a specified date in the bill. However, in September 2013, GAO reported that CMS has yet to take the necessary steps, such as initiating an information technology project, to develop a system to remove SSNs from Medicare cards.

In addition to government-issued identification cards, the Death Master File (DMF) also involves identity theft concerns. Managed by the Department of Commerce, the DMF allows law enforcement agencies, medical researchers, members of the financial community, insurance companies, and local governments to "identify and prevent identity fraud and identify customers who are deceased." Congress has recently restricted access to the DMF, which includes Social Security numbers, in an effort to reduce identity theft. The DMF is a database of over 85 million death records reported to the SSA from 1936 to the present. The Bipartisan Budget Act of 2013 directs the Secretary of Commerce to create a fee-based certification program for all persons seeking access to DMF data for any deceased individual within three years after the individual's death. Certification requires that the person establish that s/he has a legitimate fraud prevention interest or business purpose. The certified person may face penalties up to $250,000 for improper disclosure or use of the DMF data.

In the 113 th Congress, several bills have been introduced that would limit the use of SSNs in order to prevent identity theft, including H.R. 2229 , H.R. 1560 , S. 676 , H.R. 781 , and H.R. 3764 .

Restrictions on Governmental Collection and Use of SSNs

As early as the 1970s, concerns regarding increased uses of the SSN by both government and private entities prompted studies and subsequent congressional action limiting government uses of the SSN. The Social Security Administration created a task force in 1970 to investigate "non-program" uses of the SSN, and the task force's report the following year stated,

Any examination of SSN policy must begin with the recognition that the number has ceased to be merely a "social security number." Especially in the past few years, the number has come into increasingly wide use as a numerical identifier throughout society, to the point where the adult American citizen is beginning to need a number to function effectively even if he is among the very small minority of people who never work in covered employment.

In 1973, the Department of Health, Education and Welfare Secretary's Advisory Committee on Automated Personal Data Systems proposed (1) that an individual whose SSN is requested should be informed as to whether or not divulging his number is legally required; and (2) that no individual should be denied a benefit because of his refusal to divulge his SSN for purposes other than those required by federal law.

The Privacy Act of 1974

When Congress passed the Privacy Act of 1974, it took the first legislative step toward establishing a federal policy limiting compulsory divulgence of the SSN. In its report accompanying S. 3418 , which became the Privacy Act, the Senate Committee on Government Operations stated that the extensive use of the SSN as a universal identifier was "one of the most serious manifestations of privacy concerns in the nation." Citing its fear of harm to individual privacy through misuse of information systems, Congress intended, in the Privacy Act, to curb government use of SSNs as a personal identifier.

Section 7(a)(1) of the Privacy Act provides that

It shall be unlawful for any Federal, State or local government agency to deny to any individual any right, benefit, or privilege provided by law because of such individual's refusal to disclose his social security account number.

However, the effectiveness of the Privacy Act in restricting SSN use was somewhat limited by the exemptions in Section 7(a)(2) of the Privacy Act:

The provisions of paragraph (1) of this subsection shall not apply to

(A) any disclosure which is required by Federal statute, or

(B) the disclosure of a social security number to any Federal, State, or local agency maintaining a system of records in existence and operating January 1, 1975, if such disclosure was required under statute or regulation adopted prior to such date to verify the identity of an individual.

In any situation where a government agency asks for a person's SSN, the agency, under Section 7(b) of the Privacy Act, is required to tell the person whether the request is mandatory or voluntary, and what uses the agency will make of the SSNs that are collected.

While Section 7 of the Privacy Act does not explicitly provide remedies for its violation, courts have held that it would be illusory for Section 7 to provide that persons have the right to have their SSN free from compulsory disclosure with no judicial remedy. Thus, courts have granted declaratory relief and permanent injunctions to comply with the Privacy Act's SSN disclosure and notice provisions. The United States Supreme Court, however, ruled in Doe v. Chao that an individual must prove he has suffered actual harm before he can receive a $1,000 minimum statutory award under Section 7 of the Privacy Act when the government wrongfully discloses his social security number.

In summary, under the Privacy Act, if an entity is a federal, state or local government agency, it cannot require an individual to submit an SSN, unless (1) the government agency used SSNs in a record system for identification purposes under a statute or regulation adopted prior to January 1, 1975; or (2) it has received specific permission from Congress to require submission of the SSN, and the agency cites such authorizing authority. If neither of those two conditions is satisfied, then the government entity may still ask an individual to voluntarily submit his or her SSN. In either situation where an SSN is requested, the agency must fully disclose what uses will be made of the number.

The Tax Reform Act of 1976

In 1976, Congress modified the general protections of the Privacy Act to specifically authorize the states to use the SSN for a wide range of purposes, and by codifying the use of the SSN for federal tax purposes. First, Section 1211(c)(i) of the Tax Reform Act of 1976 amended Section 205(c)(2) of the Social Security Act by adding the following language:

(c)(i) It is the policy of the United States that any State (or political subdivision thereof) may, in the administration of any tax, general public assistance, driver's license, or motor vehicle registration law within its jurisdiction, utilize the social security account numbers issued by the Secretary for the purpose of establishing the identification of individuals affected by such law, and may require any individual who is or appears to be so affected to furnish to such state (or political subdivision thereof) or any agency thereof having administrative responsibility for the law involved, the social security account number (or numbers, if he has more than one such number) issued to him by the Secretary.

Second, Section 1211(c) of the Tax Reform Act amended Section 6109 of the Internal Revenue Code to provide that "[t]he social security account number issued to an individual for purposes of Section 205(c)(2)(A) of the Social Security Act, shall, except as otherwise specified under regulations of the Secretary, be used as the identifying number for such individuals for purposes of this title." Before this revision, Section 6109 had required taxpayers to use identifying numbers as prescribed by regulations. Although in practice it was the SSN which was used, no provision in federal law had specifically required that the SSN be the identifying number for federal tax purposes until the 1976 amendment.

In studying the effects of these two laws, the Privacy Protection Study Commission found that the restrictions on use of the SSN imposed by Section 7 of the Privacy Act had little impact on government agencies. The Commission stated that "[t]he Tax Reform Act grants most State and local government agencies that found its continued use necessary authority to demand it. In short, the Privacy Act and the Tax Reform Act essentially preserved the status quo with respect to the SSN: namely, widespread collection and use of the number."

Other Federal Statutes Affecting SSN Confidentiality

More recent enactments by Congress have provided increased confidentiality of SSNs in public records. Any SSNs and related records that are obtained by federal or state authorized persons pursuant to federal laws enacted on or after October 1, 1990 "shall be confidential, and no authorized person shall disclose any such social security account number or related record." Penalties are provided for unauthorized willful disclosures of such confidential information.

Widespread distribution of SSNs from state driver records has been curtailed since 1994 by Congress under the Driver's Privacy Protection Act. Since its amendment in 2000, certain "highly restricted information" (including an individual's photograph or image, social security number, or medical or disability information) may not be disclosed by a state department of motor vehicles without the express consent of the individual, except under limited circumstances. The statute provides for both criminal punishment and a private cause of action for violations of its provisions.

Another federal statute which provides some protection from SSN disclosures is the Freedom of Information Act ("FOIA"). The FOIA requires federal agencies to generally make their records available to the public, unless a specific exemption applies. "Exemption 6" allows an agency to withhold records that would disclose information of a personal nature where "disclosure would constitute a clearly unwarranted invasion of personal privacy."

Several federal laws with broad application to consumers' "personal information" limit the ability of entities in the public and private sector to use and disclose social security numbers. For example, the Fair Credit Reporting Act (FCRA) limits access to credit data, including SSNs, to those who have a permissible purpose under the law. The Fair and Accurate Credit Transactions Act allows consumers who request a copy of their credit report to ask that the first five digits of their SSN not be included in the file. The privacy provisions of the Gramm-Leach-Bliley Act regulate the sharing and disclosure of personally identifiable consumer information by financial institutions, and the Health Insurance Portability and Accountability Act (HIPAA) protects the confidentiality of personally identifiable information, including SSNs, in the context of health care matters.

Publicly funded schools and those that receive federal education assistance must comply with the Family Educational Rights and Privacy Act (FERPA, also known as the Buckley Amendment). Under this statute, an educational institution must have written permission from the parent or "eligible student," (i.e., a student who has reached the age of eighteen), to release any personally identifiable information (which includes social security numbers) from a student's educational record, except for certain exceptions. Not all colleges and universities have interpreted FERPA to prohibit the use of a student's SSN as an identifier within the school community. However, increasingly, many schools have ended practices whereby students' SSNs are displayed on identification cards or on class roster lists or as identifying numbers for the posting of grades. In one case brought under this act, students successfully sued Rutgers University and its president to enjoin dissemination of class rosters with student social security numbers to faculty and students.

In July 2010, the Social Security Administration Office of Inspector General issued an audit report examining schools' collection and use of social security numbers for kindergarten through grade 12. While the report acknowledged that the Social Security Administration cannot prohibit states and schools from collecting and using SSNs, the auditors nevertheless recommended a coordinated effort to inform schools of the risks associated with unnecessary collection and use of SSNs, in order to cut down on such practices. The report also recommended stringent safeguards be adopted by schools for their collection and use of SSNs.

Constitutional Challenges to SSN Collection and Dissemination

Constitutional challenges to the collection of social security numbers by government agencies have, for the most part, been unsuccessful. Thus, various courts have held that requiring an SSN on a driver's license application is constitutional, as is the requirement that persons disclose their SSNs as a condition for receiving welfare benefits or food stamps. In cases where an individual's SSN is publicly displayed or disseminated, court challenges in recent years have been more successful, particularly where fundamental rights such as the right to vote or the right to free speech are involved. With regard to the display of SSNs in online public records, or in cases involving requests for SSNs under federal or state open records statutes, the courts have attempted to balance the public's interest in the transparency of government processes with the private individual's interest in the confidentiality of personal identification and security information.

Collection of SSNs

Challenges to SSN collection requirements based on constitutional grounds have not generally fared well in the courts. Under the current framework for evaluating constitutional privacy rights, which is essentially a "reasonable expectation of privacy" analysis, courts have been hard pressed to find a constitutionally protected privacy interest in the SSN because of the broad dissemination of SSNs in public and private records. Thus, courts have held that requiring an SSN on a driver's license application is not unconstitutional; nor is a requirement that welfare recipients furnish their SSNs. In like fashion, an individual's interest in privacy does not invalidate the statutory requirement that non-attorney bankruptcy preparers place their SSNs in court filings. A state statute that required the last four digits of a person's SSN in order to obtain a wildlife conservation license, a pre-requisite for a hunting or fishing license, did not affect a fundamental right to privacy, according to the Supreme Court of Montana. Also, the firing of an employee who refused to provide her SSN to her employer did not violate the employee's constitutional right to privacy. The employee alleged that she "was being placed in dire jeopardy of having her identity stolen" were she to disclose her SSN to her employer. However, the court held that "the Constitution does not provide a right to privacy in one's SSN," and "[t]here is no doubt that laws requiring employers to collect SSNs of employees have a rational basis."

In addition, in Bowen v. Roy, the United States Supreme Court held that requiring applicants to provide their SSNs as a condition of eligibility for federal benefits, such as AFDC or food stamps, does not violate the First Amendment to the United States Constitution since such a requirement is neutral in religious terms. Thus, a person may need to make a choice between receiving a government benefit and adhering to religious beliefs. In addition, preventing fraud in federal welfare programs is an important goal, and the SSN requirement is a reasonable means of promoting that goal.

In a case involving a federal requirement imposed on states, Michigan challenged a 1996 provision in the Welfare Reform Act that requires states to collect the SSNs of applicants of driver's licenses and other state licenses. The purpose of the requirement is to facilitate interstate tracking and location of parents who are delinquent in child support payments. Because this statutory provision is tied to federal money that the state receives for its child support enforcement programs, the Michigan Legislature enacted the federally required laws, but then directed the Family Independence Agency to apply for an exemption from the requirement which was denied. The Michigan Department of State filed suit against the United States, challenging the constitutionality of the provision. In Michigan Department of State v. United States , the district court upheld this requirement as a proper exercise of Congress' constitutional power to tax and spend for the general welfare. The court found that the statutory requirement for collection of SSNs was sufficiently related to the federal interest of assisting the states in the nationwide collection of child support, and that it did not violate a citizen's right to privacy.

Dissemination of SSNs

The United States Supreme Court, in Reno v. Condon , unanimously upheld the provisions of the Driver's Privacy Protection Act of 1994 (DPPA) as constitutional. The DPPA restricts the states' ability to disclose a driver's personal information, including SSN, without the driver's consent. South Carolina had a statute permitting information contained in the state's Department of Motor Vehicle records to be available or sold to any person or entity that fills out a form listing the requester's name and address and stating that the information would not be used for telephone solicitation. However, the Court found the DPPA's restrictions to be a proper exercise of Congress's authority to regulate interstate commerce since drivers' personal information sold by the states is used by insurers, manufacturers, direct marketers, and others engaged in interstate commerce to contact drivers with customized solicitations. In addition, the Supreme Court rejected arguments that the federal regulation violated Tenth Amendment federalism principles.

In another federal court case, Greidinger v. Davis , both SSN collection and dissemination issues were addressed. Virginia's requirements that each voter's registration form contain an SSN and that voter records, including SSNs, would be available for public inspection were challenged. The court held that neither SSN collection nor dissemination is itself a violation of a constitutional right of privacy. However, the court found that Virginia had failed to comply with Section 7(b) of the Privacy Act by not stating whether the disclosure was mandatory or voluntary, and by not listing what uses would be made of the SSNs. The court went on to find that Virginia's practice of making voter records, including SSNs, available for public inspection placed "a burdensome condition on the exercise of the fundamental right to vote." Virginia's justification for collecting and disclosing SSNs was to prevent voter fraud. The court held that while Virginia's rationale amounted to a compelling state interest, its policy of keeping SSNs available for public inspection was not "narrowly tailored" to the state's interest, so the court barred further dissemination of voters' SSNs. Thus, the court's specific holding in this case was that the public availability of SSNs was unconstitutional only because it burdens another fundamental right, the right to vote, not because it was per se unconstitutional.

In another case involving constitutional principles, the Fourth Circuit Court of Appeals, in Ostergren v. Cuccinelli , held that a Virginia statute prohibiting the intentional publication of a person's social security number over the Internet violated the First Amendment's protection of free speech. The plaintiff, Ostergren, was a privacy advocate who published public land records that revealed the SSNs of various public officials on her website. Virginia counties had been in the process of redacting SSNs from land records available online since 2007, but not all counties had finished the process, and not all SSNs were redacted due to errors. The circuit court stated that, given Ostergren's "criticism about how public records are managed, we cannot see how drawing attention to the problem by displaying those very documents could be considered unprotected speech. Indeed, the Supreme Court has deemed such speech particularly valuable within our society." Thus, the court applied the strict scrutiny standard of review: "Accordingly, Virginia may enforce Section 59.1-443.2 against Ostergren for publishing lawfully obtained, truthful information about a matter of public significance 'only when narrowly tailored to a state interest of the highest order.'" The court then ruled that punishing Ostergren for posting publicly available online land records when Virginia itself continued to make unredacted documents publicly available violated Ostergren's First Amendment rights.

In recent court cases involving requests for SSNs through vehicles such as federal and state open records laws, courts have increasingly balanced the public's right to know against a person's right to keep personal information private, and have, in a number of cases, sided with protecting informational privacy. For example, in Sherman v. U.S. Dep't of the Army , the Fifth Circuit Court of Appeals examined a Freedom of Information Act (FOIA) request for personnel record information with unredacted SSNs. The court stated,

[A]n individual's informational privacy interest in his or her SSN is substantial. The privacy concern at issue is not, of course, that an individual will be embarrassed or compromised by the particular SSN that she has been assigned. Rather, the concern is that the simultaneous disclosure of an individual's name and confidential SSN exposes that individual to a heightened risk of identity theft and other forms of fraud.

The court held that provision of the unredacted SSNs would constitute "a clearly unwarranted invasion of personal privacy" under Exemption 6 of the FOIA. In a similar state court decision, the Supreme Court of Oklahoma, in Oklahoma Public Employees Assn v. Oklahoma , denied public access via the Oklahoma Open Records Act to SSNs and dates of birth of state employees. The court used a balancing test to determine whether the employees' interest in non-disclosure outweighed the public's right to know under the state statute which provided an exception to disclosure when the information sought would constitute a "clearly unwarranted invasion of the state employees' personal privacy." In this case, the court found that disclosure of the personal information sought "would not significantly serve the principal purpose of disclosure, i.e. , ensuring public confidence in government by increasing the access of the public to government and its decision-making processes."

SSN Use in the Private Sector

Private sector use of the SSN is widespread, including activities such as using SSNs for data exchanges to assess credit risk, tracking patient care among multiple providers, locating bankruptcy assets, and providing background checks on new employees. One may be asked to provide one's SSN for such diverse activities as taking out an insurance policy, checking into a hospital, applying for a store charge account, buying a car, setting up a utility account, or joining a club.

Section 7 of the Privacy Act 1974 and related federal statutes do not impose restrictions on private sector use of the SSN. Thus, private businesses and organizations may, in most circumstances, request an individual's SSN in exchange for goods or services, and no general federal law regulates such transactions. Although an individual can refuse to give his or her SSN to a company or organization, the business can also refuse to provide the goods or services unless the SSN is provided. If the company insists on receiving a customer's SSN, the individual can refuse and take his or her business elsewhere. In some cases, an accommodation may be reached whereby a business agrees to use an identifier other than a person's SSN, but there is no federal law that prohibits the private entity from requiring a person's SSN as a condition to providing goods or services. State laws may, however, restrict private sector use of SSNs, and should be consulted.

One federal statute that does impact the collection of SSNs by businesses and financial institutions in the private sector is Section 326 of the USA PATRIOT Act. That provision directed the Treasury Department to promulgate regulations that require certain financial institutions to verify the identity of persons establishing a new line of credit or opening a new account and to consult "lists of known or suspected terrorists or terrorist organizations provided to the financial institution by any government agency to determine whether a person seeking to open an account appears on any such list." These regulations require financial institutions such as banks to implement a Customer Identification Program (CIP), which, at a minimum, must require that an individual provide his or her name, date of birth, residential or business address, and taxpayer identification number, which for U.S. citizens is the person's SSN. Thus, a person opening a bank or credit card account or financing a car through a loan from a financial institution may be told that supplying his or her SSN is "required by the Patriot Act." To be precise, it is the CIP regulations issued pursuant to Section 326 of the USA PATRIOT Act that require disclosure of a person's SSN under these circumstances.

State Laws Affecting SSN Confidentiality and Disclosure

A number of states have enacted statutes that restrict the use or display of SSNs in various contexts, including restricting companies and individuals from posting or publicly displaying SSNs, printing them on cards, transmitting them over the Internet, or mailing them without safety measures. California was the first state to pass such a law that bars certain businesses, such as insurance companies, from publicly displaying SSNs. The California law also prohibits printing an SSN on identification cards; printing SSNs on documents mailed to customers, except under certain circumstances; and requiring persons to use an SSN to log onto a website without a password. Other states, including Arizona, Arkansas, Connecticut, Illinois, Maryland, Michigan, Minnesota, Missouri, Oklahoma, Texas, Utah and Virginia, have passed laws similar to California's law. Some states have gone further in protecting SSNs, including restricting the solicitation of SSNs by private companies, prohibiting disclosure of SSNs or any number derived therefrom, or subjecting a truncated SSN to the same restrictions on display and transfer as the full SSN.

Concerns have been expressed regarding the effect of technological advances on the availability and use of the SSN in private sector databases: Organizations that sell personal information, including SSNs, have benefited greatly from continuing advances in computer technology and the availability of computerized databases. This practice may be exploited in a fraudulent manner. For example, in February 2005, ChoicePoint, the largest information broker in the country, "unwittingly sold personal information on at least 145,000 Americans to a criminal ring engaged in identity theft." Increasingly, states have passed laws that require state agencies and private entities to notify residents when a security breach results in the release of personal information, including SSNs. California was the first jurisdiction to pass such a law in 2002. As of October 2010, at least 46 states, the District of Columbia, Puerto Rico, and the Virgin Islands have enacted laws with similar requirements.

Chronology of Federal Developments Affecting the Social Security Number

The chronology that follows details various federal developments relating to use of the SSN.