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Johnson Opening Statement: Field Hearing on Social Security Numbers and Child Identity Theft

September 01, 2011

Back in November 1936, the U.S. Postal Service first began issuing Social Security cards to workers.  Even though Social Security numbers were created to track earnings for determining Social Security benefits, today these numbers are widely used as personal identifiers.  

Some uses of Social Security numbers are mandated, for example for income and tax-related reporting to the IRS by employers, banks and insurance companies.  Countless other businesses use this 9-digit number as a default identifier to facilitate the matching of consumer information.  Also, many businesses wrongly use Social Security numbers to prove an individual is who they say they are.    

Once an identity thief has someone’s Social Security number, they are often able to open new accounts, access existing accounts, or obtain other benefits in their victim’s name.  In fact, in their April 2007 report, the Identity Theft Task Force created by President George W. Bush identified the Social Security number as the “most valuable commodity for an identity thief.”  Months or even years later victims first learn about the crime, often after being denied credit or employment or being contacted by a debt collector.  

As we will hear from two of our witnesses today, learning your private personal and financial information has been compromised is devastating.  Even worse — victims must take the lead in repairing and restoring their records.  

For years victims may have to prove who they are while monitoring credit reports, arguing with collection agencies and dealing with the IRS and Social Security about wages they didn’t earn and taxes they don’t owe.  Some may learn they have a criminal record which could disqualify them for a job.

Americans are right to be concerned. According to Department of Justice, in 2009 ID theft claimed over 11 million victims, that’s five percent of all adults.  The Privacy Rights Clearinghouse reports the total number of known records that have been compromised since January 2005 through last week topped 535 million.  

Increasingly, identity thieves are aiming their sights on children.  There were 19,000 cases of child identity theft reported to the Federal Trade Commission, known as the FTC in 2009, a 192 percent increase since 2003 when 6,500 cases were reported.  From the criminal’s view point, children provide easy targets since they have no debt history and no reason to check their credit records.  Child ID thieves may operate undetected for years until the child applies for a driver’s license, credit card or job and learns their ID has been compromised.  

In some very sad cases, the child is the victim of a relative.  In the meantime, children of all ages whose Social Security number has been compromised may have a record of credit card debt, mortgage default or falsified employment data.  

As we will hear from the Director of the Federal Trade Commission Southwest region today, the FTC has recently intensified its work regarding the growing problem of child identity theft, gathering experts and law enforcement officials last month for the first ever conference on child identity theft.    

We will also gain insights into identity thieves themselves based on the research of one of our own University of Texas at Dallas professors who will share the results of her interviews conducted with ID thieves serving time in prison.  

Lastly we will hear from local agents from the Social Security Administration Office of Inspector General about their successes and challenges as they work to apprehend ID thieves.

Congress must finish its work on identity theft.  Previously, bipartisan legislation has been passed by the Ways and Means Committee to protect the privacy of Social Security numbers and prevent identity theft.  While progress has been made, because Social Security number use is so widespread the Committees of jurisdiction have yet to reach agreement on the right approach to limiting their use.   In the meantime this Committee can make progress by removing SSNs from Medicare cards.  To that end I have reintroduced with my Texas colleague, Lloyd Doggett, the Medicare Identity Theft Prevention Act.  

The risk of ID theft goes far beyond the card being stolen.  Every medical record at doctor offices, hospitals and nursing homes has a Social Security number written on it.  The fact that millions of Social Security numbers are readily available to identity thieves for the taking is unbelievable and completely unnecessary.  The Centers for Medicare and Medicaid Services have refused to act.  If they won’t do what’s right for America’s seniors, we will.   With the help of the information gathered from our witnesses today, we can also do what’s right for children and help protect them from ID theft.