Protect yourself from identity
theft losses by keeping a tight rein on your Social Security
number. Only a few organizations have the right to demand it.
I think it's
spooky. Everybody has that one number,
and everything about you is tied to it," worries Jim Edwards,
program director at WJNO in West Palm Beach, Fla.
"Put it in a computer and poof -- here's your bank account,
your phone number, where you work."
The key to all that private information? Your Social Security
number.
Edwards was way ahead of most people. Back in the early '80s, he
refused to give his Social Security number when he enrolled at
Miami Dade Community College. The school wanted to use it as a
student identification number, but Edwards held his ground and the
school gave him a different number -- all zeros, as he recalls.
Today, schools, phone companies, utilities, health clubs,
insurance companies, video stores -- just about everybody wants
your Social Security number. Some of the more prevalent uses are
to get your credit rating and determine whether you pay your
bills, and to keep track of you through name and address changes.
But companies also use your Social Security number to develop
marketing lists, which they can sell to other companies. A list
with the numbers is more valuable than one without.
Why should you care who sees your Social Security number? The more
people who see it, the more susceptible you are to identity theft,
where you are victimized by someone fraudulently using your name
and credit report to steal money.
Identity theft costs American businesses billions each year, costs
that are eventually passed on to all consumers. The toll on
victims is heavy, too. The California Public Interest Research
Group estimates that, on average, an identity theft victim will
spend 175 hours and $800 trying to clear their record of
fraudulent charges.
"I've seen accounts opened with wrong names and different
addresses. As long as there's a SSN, that's all some of them care
about," says Linda Foley of the Identity Theft Research
Center in San Diego.
Who has the right to ask for your
digits?
While any business can ask for your Social Security number,
there are very few entities that can actually demand it -- motor
vehicle departments, tax departments and welfare departments, for
example. Also, SSNs are required for transactions involving taxes,
so that means banks, brokerages, employers, and the like also have
a legitimate need for your SSN.
Most other businesses have no legal right to demand your number.
"There is no law prohibiting a business from asking for your
Social Security number, but people don't know they can say
no," says Carolyn Cheezum of the Social Security
Administration.
"We recommend that you ask if they'll accept an alternative
piece of identification. If they don't, flat-out refuse to do
business with them. Bear in mind that there's a possibility
they'll refuse to provide whatever product or service you're
seeking."
Edwards, for example, won't give his Social Security number to his
doctor's office.
"When you go to the doctor's office and fill out the medical
information, they ask for the SSN. I leave it blank. Nothing
happens. I'm not reporting income from them."
In fact, chances are good that many companies that routinely ask
for Social Security numbers will do business with you even if they
can't have your number.
"We ask for a Social Security number to open an account, but
it's not required," says Michael Lowndes of the Long Island
Power Authority.
"The Social Security number is just part of the customer's
record. A common problem with utility accounts is people open an
account, default and reopen another account using the same Social.
We can use that to discover the problem."
Kimberly Brown at Bell South headquarters in Atlanta says there's
a procedure the company follows if someone doesn't want to give
his number.
"We ask them to fill out a questionnaire to determine their
payment history. We don't do a credit check; we depend on them
being honest. The questionnaire determines the Bell South rating
for them, and then that determines whether they'll have to pay a
deposit to establish service."
Your cat is sick? Give us your Social
Security number
Linda Foley of the Identity Theft Research Center says she
brought her critically ill cat to a vet's office and balked when
she was asked for her SSN.
"I said why? Will it be my cat's ID number? They said no, but
if you give us a check we want a driver's license and a SSN in
case the check bounces. I said I'd pay by credit card. They said
it's our policy to get the number.
"I said if I give you a credit card and refuse to give you my
Social Security number, you'd let my cat die right now? They
looked at me and the cat and said, 'Give us the card; we'll take
care of it.' I was upset about the cat, but I was frustrated by
the way I was being treated. It was unnecessary."
Social Security numbers and identity
theft
Social Security numbers exist for the purpose of tracking
earnings and paying benefits, Cheezum says. Although President
Franklin Roosevelt signed an order requiring federal agencies to
use SSNs for record-keeping systems, they were never meant to be
used by businesses as an identifier, but have taken on that role
because everyone has one.
But the snowballing problem of identity theft is spurring some
governments to limit the use of SSNs.
California is leading the way with its law barring businesses,
health care providers and schools from:
- Publicly posting Social Security numbers or requiring them
for access to products or services
- Printing of Social Security numbers on cards required for
accessing products or services
- Requiring an individual to use his or her Social Security
number to access a Web site unless a password is also required
to access the site
- Printing an individual's SSN on any materials that are
mailed to the individual.
The state of New York limits the use of Social Security numbers in
schools and colleges. New York public and private schools cannot
publicly display Social Security numbers. Many are opting to
assign students identification numbers. Arizona has passed similar
legislation.
Foley says she hopes other states will follow suit and be even
more restrictive so that SSNs will eventually be used only for a
few selective purposes.
But, Foley says, until that happens, the first defense against the
fraudulent use of Social Security numbers are the companies that
issue credit.
"Are they verifying that the person applying for credit is
the true consumer? Are they looking carefully for red flags that
might alert them to possible fraudulent use? If a credit
application has a last name spelled incorrectly or an address
different from the credit record, that should provoke someone into
calling the consumer."
Some privacy rights proponents say Social Security numbers
shouldn't be used for obtaining credit. Does that mean a second
number would have to be issued for people seeking credit? Would
that be any better than the current system?
More protections in California
Perhaps California's newly enacted privacy law offers a better
option.
In addition to limiting the use of Social Security numbers, the
law allows a consumer to place a "security freeze" on
his credit report. The freeze prohibits consumer-credit-reporting
agencies from releasing the consumer's credit report or any
information from it without express authorization from the
consumer.
Time will tell if that provision works better than the more common
"alerts" that many people put on their credit reports.
With an "alert" a consumer is supposed to be notified
that someone is attempting to obtain credit in his or her name.
But stories abound of breakdowns in the system.
If someone uses your Social Security number to obtain credit and
doesn't pay the bills, you'll discover the fraud as soon as the
bill collectors come calling. But sometimes an identity thief
actually pays the bills and, in those instances, it could be a
long time before you discover the fraud.
The best way to find out if someone is fraudulently using your
Social Security number is to request copies of your credit reports
at least once a year. There are three main credit-reporting
agencies. It's a good idea to get a copy of your report from each
agency so you can check for discrepancies. You can order your
credit report from: TransUnion, Equifax and Experian.
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