Committee on Ways and Means
Subcommittee on Social Security

For Immediate Release
Contact: Barbara Clay or Christin Tinsworth 202-225-8933
November 1, 2001

Strengthening Privacy Safeguards
of Americans’ Social Security Numbers

WASHINGTON – Today, lawmakers examined the need to better safeguard Americans’ Social Security numbers in the wake of terrorist attacks on the United States. The Subcommittee on Social Security, led by Chairman Clay E. Shaw (R-FL), also examined how the Social Security Administration responded to the families of the victims of September 11.

Chairman Shaw made the following opening statement at the hearing:

Today we focus on the Social Security Administration’s response to the tragic events of September 11^th.

As we mourn the loss of so many Americans, the best of our great nation have stepped forward to assist those injured and the families of those who were lost. Many of the victims were eligible for Social Security survivor or disability benefits, and employees of the Social Security Administration responded with urgency, dedication, and compassion.

Today, the Acting Commissioner of Social Security will detail the Administration’s diligent efforts to respond to the victims of these heinous attacks. And also this morning, Inspector General Jim Huse will discuss how the theft of Social Security numbers may have helped harbor terrorists in our own country.

Countless hours of investigation by IG agents have provided key identifying information on these terrorists and their networks. Law enforcement officers - local police, FBI, Secret Service, and the Social Security Administration’s Office of Inspector General - have worked in concert since the attacks to identify the terrorists, their enabling thugs, and others who are suspect.

The events of September 11 have changed all of us, forever. Yet, our resolve to respond is unyielding. As we learn more about the terrorists’ methods, investigators have found that some of the terrorists assumed identities, using Social Security numbers to execute their plans and to frustrate law enforcement efforts. The activities of the terrorists highlight the need for us to be vigilant in ensuring the integrity of the Social Security number application process, protecting the privacy of Social Security numbers, and preventing identity theft.

This year, I, along with several of my Committee colleagues, introduced H.R. 2036, the "Social Security Number Privacy and Identity Theft Prevention Act of 2001." This bipartisan bill represents a balanced approach to protecting the privacy of Social Security numbers while allowing for their legitimate uses.

It restricts the sale and public display of Social Security numbers by both the public and private sector and enforces such restrictions through civil and criminal penalties. Passage of this legislation would be a step in the right direction. Today we will learn whether there is more we can do.

Social Security is called upon after a crisis to assist victims, and this role is paramount. I count the employees of the Social Security Administration and the Office of Inspector General among our nation’s best, and we thank them for their ability to serve the public good, no matter how difficult.

But, now we must look to the future. Having a secure system is critical to preventing future attacks.

Social Security numbers have become the most frequently used personal identifier, and are far too easily used by criminals or terrorists to steal identities and obtain false documents. We must act to protect the privacy of Americans’ Social Security numbers. It is a necessary step in our nation’s response to terrorism.

Social Security Identity Theft Fact Sheet

• The Social Security Administration (SSA) estimates that over 290 million Americans currently have Social Security numbers (SSNs). According to the Federal Trade Commission, SSNs are a principal component used to commit identity theft.
• Identity theft is considered the fastest growing financial crime in the country – affecting an estimated 500,000-700,000 people annually.
• Allegations received by the SSA Hotline involving potential fraudulent SSN use for identity theft increased from 62,000 cases in fiscal year 1999 to over 90,000 in fiscal year 2000 – almost a 50 percent increase in just one year.

• Actual losses to individuals and institutions rose from $442 million in 1995 to $745 million in 1997 – a 169% increase in just two years.
• Identity theft victims spend 2 years trying to remove an average $18,000 in fraudulent charges from their credit reports.
• 34% of consumers who reported the dollar amount that the thief had obtained by using their identities reported an amount of $1,000 or less; 35% reported an amount between $1,001 and $5,000; 13% reported an amount between $5,001 and $10,000; and 18% reported an amount greater than $10,000.
• Two major insurance companies have begun offering identity and credit card theft insurance due to the increase in identity theft as well as concerns expressed by their customers.
• More than 75% of identity theft crimes last year involved victims of "true name" fraud. This occurs when someone uses the SSN to open new accounts in the victim’s name.
• The average amount of time it took victims to resolve their cases was nearly 2 years (23 months). Victims who were not able to resolve their cases within two years were still dealing with the problem for an average of 44 months.
• Victims spent an average of 175 hours and $808 in out-of-pocket costs (not including lawyer’s fees) trying to fix their problem.

The following are the most common types of identity theft complaints reported by consumers:

• Credit Card Fraud: 47% of consumers reported that a credit card account was opened in their name or unauthorized charges were placed on their existing credit card.
• Unauthorized Phone or Utility Services: 22% of consumers reported that the identity thief had established new telephone, cellular, or other utility service in their name.
• Bank Fraud: 15% of consumers reported that a new bank account had been opened in their name, fraudulent checks had been written, or unauthorized withdrawals had been made from their account.
• Fraudulent Loans: 8% of consumers reported that the identity thief had obtained a loan (personal, business, auto, real estate, etc.) in their name.
• Government Documents or Benefits: 8% of consumers reported that the identity thief had obtained government documents or benefits in their name.
• Multiple Types: Approximately 50% of the consumers reported experiencing more than one of the above types of identity theft.

H.R. 2036 - Social Security Number Privacy and Identity Theft Prevention Act of 2001

• Prohibits Federal, State and local governments from:

• selling SSNs (limited exceptions are made to facilitate law enforcement and national security, to ensure the accuracy of credit and insurance underwriting information, and to allow for the effective administration of programs authorized under the Social Security Act),
• displaying SSNs to the general public and on Internet sites (limited exceptions are made to facilitate law enforcement and national security and to ensure the accuracy of credit information),
• displaying SSNs on checks issued for payment,
• displaying SSNs on drivers’ licenses, motor vehicle registrations or other identification documents issued by State Departments of Motor Vehicles,
• displaying SSNs on visible employee identification cards or military tags, and
• employing prisoners in jobs that provide them with access to SSNs.

• Strengthens verification requirements for birth records when someone applies for a SSN card.
• Requires the Commissioner of Social Security and the Attorney General to report on the progress of the Social Security Administration and the Immigration and Naturalization Service in implementing a process for enumeration of aliens who are in need of SSNs.

• Authorizes the Attorney General to issue regulations restricting the display, sale and purchase of SSNs in the private sector (limited exceptions including for law enforcement, including child support enforcement, and national security, public health, health or safety emergency situations, research, individual’s written consent, and as deemed appropriate by the Attorney General).
• Prohibits a person from obtaining another person’s SSN to locate or identify the individual with the intent to physically injure, harm, or use the individual’s identity for an illegal purpose.
• Discourages businesses from denying services to individuals who refuse to provide their SSNs by subjecting them to penalties under Federal law (limited exception for businesses required by Federal law to submit individual’s SSN to Federal government).
• Includes the SSN in the definition of "credit report" under the Fair Credit Reporting Act so that the SSN receives the same privacy protections as other consumer credit information.

• Creates new criminal (up to 5 years imprisonment and fine up to $250,000) and civil penalties (up to $5,000 for each incident) for violations of the law relating to display, sale, purchase, misuse of the SSN, or offering to acquire, for a fee, an additional SSN.
• Allows Federal courts to order defendants to make restitution to the Social Security Trust Funds or the General Fund of the Treasury for violations of the law.

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