THE NECESSITY OF SOCIAL SECURITY NUMBERS VERSUS IDENTITY THEFT
According to testimony given by Joel Winston of the Federal Trade Commission (FTC) to the House Committee on Ways and Means, Subcommittee on Social Security, “With 300 million American consumers, many of whom share the same name, the unique nine-digit social security number is a key identification tool for businesses, government, and others.” Financial and employment decisions are based on credit reporting, which is reliant upon social security numbers to maintain credit files. Consequently, not using social security numbers would make financial transactions more risky, costly, and negatively impact anti-fraud activities.
On the flip side, social security numbers are commonly used as a means of identity theft. According to FTC data, over 255,000 complaints or 37 percent of all consumer complaints were attributed to identity theft in 2005. While it seems apparent that the use of social security numbers plays a key role in the economy, it needs to be balanced against the rampant increases in identity theft.
The mortgage industry provides one example of legislators striving for that balance. Social security numbers are critical in making a lending decision, both in insuring the identity of the individual as well as verifying employment, credit, and financial information. However, once the lending decision has been made, it is not necessary to publicly post social security numbers. Until a few years ago, social security numbers were required on security instruments. Most states now recognize the threat social security numbers in the public record pose and have enacted legislation to strip them from recordable documents. The methodology employed may vary; however, the goal is the same: to prohibit the release of social security numbers. Examples of legislation enacted this year include:
Pennsylvania Senate Bill 601, effective December 29, 2006, prohibits “a person or entity or State agency or political subdivision from publicly posting or publicly displaying in any manner an individual’s Social Security number.”
Wisconsin Assembly 536, effective March 31, 2006, prohibits a register of deeds from recording certain instruments that contain more than a partial social security number.
Indiana House Bill 1114, effective July 1, 2006, requires all recordable documents to have an affirmation statement made by the preparer that all social security numbers have been redacted under the penalties of perjury.
Colorado House 1156, effective January 1, 2007, prohibits any person or entity from publicly positing an individual’s social security number.
Finding ways to balance the need for social security numbers against the threat of identity theft will continue to be a challenge. The FTC is aggressively pursuing law enforcement, as well as providing educational materials and support through a toll-free hotline—1-877-IDTHEFT or on its web site at www.ftc.gov/idtheft.
THE EVOLUTION OF TRADITION
CRA & FAIR LENDING COLLOQUIUM 2006
It only comes once a year. The Annual CRA & Fair Lending Colloquium is one of the most well-attended CRA and fair lending events of the year, and anticipated by many as the premier networking event in the industry.
Located in picturesque downtown Newport, Rhode Island, you’ll be discussing the latest compliance issues and strategy with other senior compliance executives from around the country; listening to the most sought-after industry expert speak on a host of cutting-edge industry topics; and networking with compliance colleagues at everything from interactive breakout sessions to outdoor clambakes. The benefits are truly invaluable.
Visit www.cracolloquium.com to register and learn more. Mention the Information Newsletter and receive $100 off the cost of registration!
UPCOMING INDUSTRY EVENTS
Visit us at the Mortgage Bankers Association’s (MBA) Annual Convention & Expo, October 22 - 25, 2006, in Chicago, IL.
Where to find us: Booth 219
Also, join our presentation on Securing Customer Data and Your Business on October 24 from 11 A.M. – 12:15 P.M. Location information:
Hyatt Regency Chicago
Crystal Ballroom—Salon A
Green Level
West Tower
To register for the MBA Annual Convention & Expo, click the link below.
